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Equity Office Slashes Dividend, Widens Buyback Purse

CHICAGO-The largest US office REIT cuts its dividend 34% to $1.32 per share, expecting lower taxable income in 2006. At the same time, company trustees approve adding $500 million to its share buyback program.

By Mark Ruda | Updated on December 14, 2005

(To read more on the debt and equity markets, click here.)

CHICAGO-Equity Office Properties Trust slashed its dividend by one-third Wednesday, expecting lower taxable income in 2006. The largest US office REIT also says funds from operation are expected to be in the range of $2.15 to $2.30 per share.

While the company’s trustees have approved buying back another $500 million worth of Equity Office Properties common stock, Wall Street was less enthusiastic, as the stock price dove nearly 5%. Since launching the share buyback program in 2002, the REIT has spent $865 million repurchasing stock and operating partnership units. However, while yielding 6.4% based on Wednesday morning’s stock price, Equity Office Properties Trust’s decision to lower the dividend to $1.32 per share will reduce that yield to about 4.2%.

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