Net income for the second quarter of 2003 was $19.3 million, or $0.21 per share, compared to $33.6 million, or $0.37 per share, for the same period in 2002. Net income for the six months ended June 30, 2003, was $42.7 million, or $0.47 per share, compared to $65.1 million, or $0.73 per share, for the same period in 2002.
Catellus CEO/Chairman Nelson Rising says the good news is that the company's portfolio "continues to perform well, even in light of this difficult environment." Leasing activity has been steady, says Rising, and the rental portfolio's occupancy rate at quarter-end was 94.4%, up 20 basis points from the same time last year.
"Year-to-date, development completions total 2.3 million square feet, of which 1.2 million square feet is industrial property that was added to our rental portfolio at 100 percent occupancy, contributing to the quarter's 13% increase in net operating income over the same period a year ago," says Rising. "Additionally, at June 30, 2003, the development pipeline totaled 4.4 million square feet of space, including 3.2 million square feet of predominantly industrial property that is 77% preleased and will be added to our rental portfolio upon completion--further enhancing our portfolio's performance in coming quarters."
Nelson adds that the previously announced restructuring of Catellus' business operations, in order for it to qualify as a real estate investment trust, is in process. Following a stockholder vote that will occur later in the year, the conversion is projected to be effective Jan. 1, 2004.
At the end of June, Catellus' rental portfolio totaled 37.4 million sf. The net increase of 687,000 sf from March 31, 2003, is due to the completion of three development properties totaling 736,000 sf, offset by the sale of one building totaling 50,000 sf. The three development properties include: a 97,000-sf speculative facility in Portland, OR; a 171,000-sf build-to-suit in Denver; and a 468,000-sf speculative building in Rancho Cucamonga, CA. The three buildings are 100% leased and represent a total investment of $26.3 million with a projected return on cost of 10.8%.
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