REITs and Commercial RE Conference Calls Enlighten – Housing Tracker

Quote of the Day

“I think we’re going to see the beginning of the recent developments starting to hit the fan… Judgment day is coming.” - David Simon, Chairman and CEO of REIT Simon Property Group, speaking about construction loans coming due. (Simon Property Group, Inc. Q1 2008 Earnings Call Transcript in Seeking Alpha, Apr. 29th)

Commercial Real Estate and Real Estate Investment Trusts (REITs)

Simon Property Group, Inc. Q1 2008 Earnings Call Transcript. David Simon, Chairman, CEO, Simon Property Group (SPG): “Q1 FFO of $1.46/share is up 6.6% [y/y]. Positive factors… include solid operating results for all five of our property platforms and decreasing LIBOR rates… Growth in FFO was achieved despite the fact that our share of lease termination settlements was more than $9 million lower in Q1’08 than in 2007 [and despite] a $12M decrease in fee and interest income primarily related to an SPG provided mezzanine loan... These two items… impacted our FFO growth from 2007-2008 by over $0.07/share… I see a decade [sic] perhaps that retail development is going to be very slow. I think that’s obviously fabulous for us.” (Simon Property Group, Inc. Q1 2008 Earnings Call Transcript in Seeking Alpha, Apr. 29th)

Washington Real Estate Investment Trust Q1 2008 Earnings Call Transcript. “Skip McKenzie, President and CEO: Acquisition activity and just properties on the market is dramatically down… Talk to many of the prominent brokers in the market and they’ll tell you anywhere 40 to 80% reduction in activity. …We have seen slightly increased delinquencies, and particularly as it relates to the retail sector… There have been workouts… And as a general rule, we have incurred higher bad debt expense… The good news is that rental rates have generally been holding out with multi-family. Mike Paukstitus, SVP Real Estate: “There are several pockets in the marketplace where we have experienced a lot more supply that has moved into the marketplace.” (Seeking Alpha, Apr. 29th)

Franklin Street Properties Corp. Announces First Quarter 2008 Results. “Franklin Street Properties Corp. (FSP) announced today Net Income of $7.4 million and EPS of $0.10 for Q1’08. The Company also announced FFO of $15.6M or $0.22/share… Comparing results for Q1’08 to 2007, Net Income and EPS decreased $2.3M or $0.04/share and FFO decreased $3.9M or $0.06/share.” (Press Release via CNN Money, Apr. 29th)

General Growth Properties, Inc. Announces First Quarter 2008 Results of Operations. “General Growth Properties, Inc. (GGP) released today its operating results for Q1’08. Core FFO per fully diluted share were $0.76 for Q1’08 as compared to $0.65 in Q1’07. FFO per fully diluted share were $0.75 for Q1’08, as compared to $1.66 reported in Q1’07. Diluted EPS were $0.03 for Q1’08 as compared to $0.94 in Q1’07.” (Street Insider, Apr. 29th)

Associated Estates Realty Corporation Reports First Quarter Results. “Associated Estates Realty Corporation (AEC) today reported net income available to common shareholders of $37.4 million or $2.32/share, for Q1’08, compared with net loss available to common shareholders of $812,000 or $0.05/share for Q1’07. Q1’08 and Q1’07 results included income available to common shareholders from discontinued operations of $41.6M and $5.6M or $2.58/share and $0.33/share, respectively. FFO for Q1 were $0.22/share compared with $0.14/share for Q1’07. FFO adjusted for defeasance and other prepayment costs was $0.34/share for Q1’08 compared to $0.29 for Q1’07. John Shannon, SVP Operations: "Occupancy remained stable and we were able to achieve rental increases for both new leases and lease renewals.” (Press Release, Apr. 29th)

Developers Diversified Realty Corp. Q1 2008 Earnings Call Transcript. “Scott Wolstein CEO (DDR): “There is a great talent of opportunities out there, including a tremendous amount of CMBS paper that's in distress, that people think they are going to be able to acquire at a very reasonable prices, and very high yields and there is a lot of vulture activity going around with various plan[s]... So people are taking a little bit longer, but there are enough investors out there that are more interested in secured cash flow… Transaction volume is way down, which indicates that there is greater bid gap than there was in the past among a lot of buyers and sellers."(Seeking Alpha, Apr. 25th)

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