AMB Curtails Development, Suspends Q4 Dividend

SAN FRANCISCO-AMB Property Corp. said Monday morning that it will further curtail its development activities, only moving forward with fully committed or previously negotiated build-to-suit agreements until financial markets stabilize. Coming on the heels of a similar development slowdown by fellow industrial REIT ProLogis, AMB also suspended its fourth quarter dividend and has lowered its 2009 dividend in order to improve its cash position going forward.

The company’s development pipeline, approximately $1.6 billion, was 76% funded as of Oct. 31, 2008. The development pipeline includes approximately $1 billion of assets that are shell complete and in the process of lease-up, and approximately $636 million that is under construction, consists of more than $1 billion of assets that are shell complete and in the process of lease-up. It’s share of the remaining funding to complete the projects is expected to be $338 million.

“Our analysis indicates that we have sufficient capacity to complete the build-out of our development pipeline without the reliance on proceeds from property dispositions,” the company said. “We also currently have the capacity to hold all of our development assets upon completion as well as our development and operating properties held for sale or contribution, and to maintain compliance with our various financial covenants.”