(Mark Your Calendars: RealShare REAL ESTATE 2012, March 22nd in Los Angeles).
SAN FRANCISCO-“We had an excellent quarter with financial and operating results that were ahead of plan,” explained Hamid Moghadam, chairman and co-chief CEO of Prologis Inc., during a fourth quarter results conference call. “The team came together seamlessly and we made excellent progress on our strategic priorities.”
Moghadam explained that some of the more noteworthy accomplishments in Q4 include increasing occupancy to 92.2%, a 120 basis point improvement over the third quarter and “reducing our share of outstanding debt by more than $900 million.”
In addition, he says, “the heavy lifting associated with the merger integration is effectively complete and we have increased our synergy target to an annual savings of $115 million.”
According to Moghadam, the recovery is on track. “Global trade has been improving at a healthy pace and container volume is up as well.” He added that “The continuing rebuilding of our customers’ inventories will be a continuing theme in 2012. We are forecasting a strong 2012.”
Demand is also picking up on the firm’s small and medium sized customers, explained Moghadam.
According to the company’s results, core funds from operations per fully diluted share was $0.44 for the fourth quarter 2011 compared to $0.41 for the same period in 2010. Funds from operations as defined by Prologis per fully diluted share was $0.29 for the fourth quarter 2011 compared to $4.81 for the same period in 2010. The differential between Core FFO and FFO in the fourth quarter 2011 primarily relates to impairment charges and merger costs, says the firm. Net income (loss) per share was $0.10 for the fourth quarter 2011 compared to a net loss of $4.86 for the same period in 2010.
Under operating portfolio metrics, same-store net operating income increased over the prior year by 0.4% in the fourth quarter, compared to a decrease of 0.7% in the third quarter of 2011. Rental rates on leases signed in the fourth quarter same-store pool decreased 4.5%, compared to rental rates on leases signed in the third quarter 2011, which decreased by 8.6%.
During the fourth quarter, the company leased a total of 37.6 million square feet in its combined operating and development portfolios. The company also achieved an 80.1% tenant retention rate for the quarter, signing 22.5 million square feet of renewals.
“Our strong performance for the quarter was driven principally by higher than expected occupancy in the operating portfolio and higher private capital revenues,” explained Walter Rakowich, co-chief executive office. “Additionally, our financial performance benefitted by year-end adjustments including a one-time adjustment to G&A expenses.
During the fourth quarter, the firm completed approximately $1.4 billion of capital markets activities, including debt repurchases, refinancings, and new financings. “We exceeded our balance sheet management and delevering objectives for 2011 and remain committed to building one of the top balance sheets in the industry,” said William Sullivan, chief financial officer. “Carrying this momentum into 2012, a key area of focus is on further improving our financial position and mitigating our exposure to foreign currency.”
In recent Prologis news, as GlobeSt.com just reported, the company just sold 13 industrial properties in England to New York City-based Blackstone for $335 million. Philip Dunne, president of Prologis Europe, said in the statement that the portfolio was sold because it no longer fit within the company’s investment strategy. The firm will redeploy capital, he said.
Continue Reading for Free
Register and gain access to:
- 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
© 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.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
