For the fourth quarter 2005, funds from operations (FFO) fell to $19.6 million, or 36 cents per share, from $20.8 million, or 39 cents per share, a year ago. Analysts were expecting FFO of 39 cents per share, according to Thomson Financial.
Net earnings were also down during the fourth quarter with the REIT posting profit of $16.8 million or 31 cents per share, compared to $17.9 million, or 34 cents per share. Meanwhile, revenue for the quarter increased to $41 million from $32.4 million from the fourth quarter 2004.
For the full year, FFO rose to $81.8 million, or $1.50 per share, from $73.1 million, or $1.41 per share, in 2004. Net income increased to $85.4 million, or $1.56 per share, from $59.3 million, or $1.15 per share for the 12-month period ending December 31, 2004. Wall Street analysts had estimated FFO of $1.54 per share. Annual revenue rose to $145.2 million from $127.2 million in 2004.
Commercial Net Lease's president and CEO Craig Macnab said during the REIT's earnings conference call that 2005 was a record year for shareholders.
The REIT's portfolio occupancy increased to 98.3% at year-end 2005, compared to 97.4% at year-end 2004. During the 12-month period, Commercial Net Lease added 170 properties totaling 1.2 million sf to its portfolio. The acquisitions totaled $332.4 million.
The REIT made its largest transaction in company history in December 2005--a portfolio of Circle K convenience stores in Texas and Okalahoma, according to Macnab. He added that Commercial Net Lease is focusing on portfolio acquisitions rather than one-off transactions.
The REIT has $67.8 million worth of developments in its pipeline including 15 that it purchased in 2005. The separate portfolio the REIT maintains for exchanges reached $66.6 million at year-end 2005 through the acquisition of 58 properties.
During the year,the REIT sold off 12 completed properties totaling 476,000 sf for $40.3 million, resulting in a gain of $9.8 million. Additionally, Commercial Net Lease disposed of 12 development properties totaling $61.1 million with a gain of $13 million. At the end of the year, the REIT owned 524 Investment Properties in 41 states with a gross leasable area of approximately 9.2 million sf. It counts Barnes & Noble, Best Buy, CVS and OfficeMax among is largest tenants.
Looking ahead, the REIT is forecasting FFO for 2006 to fall between $1.58 and $1.62. Analysts are targeting $1.59 per share.
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