(Read more on the industrial market.)
SAN FRANCISCO-Industrial real estate owner and developer AMB Property Corp. on Tuesday reported a 5% drop in funds from operations due in part to weaker development profits. The result was better than Wall Street had predicted.
Funds from operations were $78.5 million, or $0.74 per share, $0.04 higher than analysts' average expectation. In the same year-earlier period, FFO was $82.4 million, or $0.87 cents per share. The results include $0.27 per share of development profits. In the same year-earlier period, development profits contributed $0.48 per share.
AMB's operating portfolio occupancy rose 80 basis points in the second quarter to 96.1%. Rents on lease renewals and rollovers increased 2.0% on average. In the year-earlier period, renewal and rollover rents declined 0.9%.
New development starts in the quarter totaled approximately 3.2 million sf in nine projects. AMB's development pipeline totaled 15.7 million sf in 41 projects globally and five value-added conversion projects in California.
Acquisitions during the quarter totaled $495 million, with which the company acquired 5.4 million sf in 23 properties. All but $15 million of the total was acquired for four of the company's co-investment funds: AMB Alliance Fund III, AMB Japan Fund I, AMB Europe Fund I and AMB-SGP Mexico. The acquisitions expanded the company's presence in several of its target markets in North America, Europe and Asia, and marked the company's entry into the Tijuana market.
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