(To read more on the debt and equity markets, click here. To read more on the industrial market, click here.)
DENVER-Executives with industrial REIT ProLogis reported this week that the company's adjusted funds from operations for the first quarter posted at 90 cents per share, a 43% increase from 63 cents in the same period in 2005. Company officials also reported that the REIT's net earnings per diluted share were 72 cents per diluted share, a 148.3% increase from the 29 cents per share during the same period in 2005.
"Our first quarter results reflect solid performance in each of our operating segments driven by the strength of global demand for high-quality distribution space," said Jeffrey H. Schwartz, chief executive officer. "Around the world, market conditions are healthy. Overall occupancies continue to rise, the pace of leasing activity is brisk and rapid absorption of newly developed space is beginning to support increased rental rates. ProLogis has been successful in capitalizing on the opportunities presented by this market environment, extending the leadership position we have established in our industry."
During the quarter, leasing in the company's stabilized properties increased from 94.5% at year-end 2005 to 95.2% at March 31, the highest level since the first quarter of 2001. ProLogis also reported record global leasing activity, including new leases and renewals, of more than 31 million sf during the quarter, up from 21 million sf in the first quarter of 2005.
"We experienced solid same-store results, with a 3.69% increase in net operating income and occupancy increases in the same-store pool of 3.97%, compared with a year ago," Schwartz said. "We continued to see positive net absorption in the top 30 North American logistics markets, and leasing in our North American stabilized portfolio also strengthened, reaching 94.9% at the end of the quarter."
Development starts represented total expected investment of $887 million, the highest level of new development started in a single quarter. Corporate distribution facility developments of 27.8 million sf completed in the last 12 months were more than 65% leased at quarter end. In addition, at March 31 ProLogis had a pipeline of $4 billion of completed developments, repositioned acquisitions and properties under development.
Assets owned and under management in ProLogis property funds grew to $10.7 billion at quarter end. During the quarter, the company purchased its partner's 80% interest in North American Property Funds II, III and IV and subsequently contributed a substantial portion of those assets to its new, open-ended North American Industrial Fund. First-quarter results included FFO associated with this transaction of approximately $13 million of previously deferred gains related to North American Funds II, III and IV, $22 million of incentive return and a $27.9 million gain related to the liquidation of these three funds.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
