"We continue to operate in a very difficult apartment (development) market, driven by historically low interest rates and a stagnant job market," says Charles S. Roberts, the company's CEO and majority owner. "We believe the unfavorable apartment market conditions are going to continue through the rest of 2003 and into 2004."
"The marketplace has forced us to continue to offer competitive incentives to attract new residents to our communities," he adds.
Still, the company was able to increase occupancy for all properties to 89.3% at the end of the second quarter from 84.9% at the end of the first quarter. Roberts Realty also completed the lease-up of its Veranda Chase apartment community in the second quarter, finishing with a 96% occupancy level.
The company lost 18 cents per share in the second quarter compared to a net loss of $784,000, or a loss of 16 cents per share, during the same period last year. For the six-month period, Roberts lost 35 cents per share versus a net loss of $1.5 million, or a loss of 31 cents per share, in the first half of 2002.
Funds from operation in the second quarter decreased 2.2% to $543,000, or eight cents per share, from $555,000, or the same eight cents per share, in second quarter 2002. For the six-month period, FFO was $1 million, or 15 cents per share, a 15.8% decrease from $1.26 million, or 17 cents per share, in the comparable 2002 period.
Roberts says the decrease in FFO is "primarily due to interest costs related to Veranda Chase being expensed in 2003, compared to interest costs being capitalized during the same period of 2002 when Veranda Chase was under construction, partially offset by increased net operating income."
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