"Leasing and capital expenditures have been on hold as businesses focused on cutting costs and gaining efficiencies [but] decision making has resumed," AMB chief executive Hamid R. Moghadam told analysts Wednesday afternoon. "Property showings and deals in negotiation are starting to increase and our strongest customers are beginning to execute previously shelved plans. The first wave of this [resumption of activity] will fill empty leased space, followed by demand for new space. It will take at least three to six months for the increased demand to show up as occupancies gains and revenue."

For the time being, however, occupancy and rents remain unstable. While occupancy increased 50 basis points during the third quarter to 91%, same-store NOI is off by 7% from the same year-earlier period due primarily to lower than average same-store occupancies and rent changes on rollovers. On a trailing four-quarter basis, the average rent change on renewals and rollovers in AMB's operating portfolio decreased 3.9%, including a 10.3% decline in the third quarter. To balance things out, AMB says it sold more than $200 million of real estate in the third quarter at an average cap rate of 6.2% for a net gain of $60 million.

As a result of the dispositions and lower expenses, the company reported better-than-expected quarterly funds from operations, or FFO, which does not account for depreciation. Third quarter FFO was $106.5 million, or $0.71 per share, up from $71.1 million or $0.69 per share, in the same year-earlier period, when the company had 50% fewer shares outstanding. Excluding development gains, FFO was $0.35, a couple of pennies above analysts' average forecast. Net income available to common stockholders per fully diluted share for the third quarter of 2009 was $0.43, as compared to $0.24 for the same quarter in 2008.