Signs of weakness
Sep 1, 2008 12:00 PM, By Elaine Misonzhnik
Beating estimates
Meanwhile, preeminent developer Kimco Realty Corp., the second largest shopping center owner in the United States with 120 million square feet of space, has analysts concerned even though it beat consensus estimates by $0.01 per share. The problem? New Hyde Park, N.Y.-based Kimco's FFO declined 7 percent to $0.66 per share, compared with the same period last year.
During its analyst call on July 30, Kimco chairman and CEO Milton Cooper said Kimco too will face continued problems with its portfolio occupancy levels as a result of the slumping economy. “All indications are that this downturn will punish the consumer,” Cooper said.
Citing the lack of development opportunities, in July, Credit Suisse analyst Michael Gorman downgraded Kimco's shares to “neutral” from “outperform.”
One of the bright spots was White Plains, N.Y.-based Acadia Realty Trust, which beat consensus estimates by a whopping $0.07 per share. (See an interview with Acadia CEO Kenneth Bernstein on p. 104 for more). The company, which operates an eight-million-square-foot retail portfolio, posted FFO of $0.41 per share, representing an increase of 57.6 percent. Acadia's same-store NOI rose one percent in the second quarter and its occupancy increased 60 basis points, to 93.9 percent.
Regency Centers Corp., a Jacksonville, Fla.-based REIT, which owns 51 million square feet of shopping center space, also beat estimates by $0.07 per share, with FFO growth of 3.2 percent, to $0.97 per share. Regency's NOI rose 2.2 percent in the second quarter.
Houston-based AmREIT beat estimates by $0.04 per share. The company's FFO rose 100 percent, to $0.12 per share, and its same-property NOI went up 0.6 percent. AmREIT's portfolio occupancy, however, declined 100 basis points, to 97.1 percent. The company owns 3.4 million square feet of commercial space.
Farmington Hills, Mich.-based Ramco-Gershenson Properties Trust beat consensus estimates by $0.01 per share. The REIT's FFO rose 3.3 percent in the second quarter, to $0.62 per share, though its same-property NOI declined 0.3 percent. Occupancy at its 20-million-square-foot portfolio remained at 94.7 percent.
Indianapolis-based Kite Realty Group beat estimates by $0.01 per share. The firm reported that FFO remained flat, at $0.31 per share, and NOI rose 0.1 percent. Kite operates 5.6 million square feet of shopping center space.
| REIT | FFO per Share | FFO Growth | NOI Growth | Hit/Miss |
|---|---|---|---|---|
| Acadia Realty Trust | $0.41 | 57.6% | 1.0% | $0.07 |
| Cedar Shopping Centers | 0.31 | 10.1 | -3.0 | 0.00 |
| Developers Diversified Realty | 0.82 | -34.9 | 2.5 | -0.06 |
| Equity One | 0.31 | -5.9 | -2.9 | -0.01 |
| Federal Realty Investment Trust | 0.96 | 5.5 | 4.1 | -0.01 |
| Kimco Realty | 0.66 | -7.0 | 2.4 | 0.01 |
| Ramco-Gershenson Properties Trust | 0.62 | 3.3 | -0.3 | 0.01 |
| Urstadt Biddle Properties | 0.30 | -45.0 | 12.1 | -0.01 |
| Weingarten Realty Investors | 0.79 | 500.0 | 2.0 | 0.00 |
| Regency Centers | 0.97 | 3.2 | 2.2 | 0.07 |
| Inland Real Estate | 0.36 | 2.9 | 3.2 | -0.01 |
| Kite Realty Group | 0.31 | 0.0 | 0.1 | 0.01 |
| AmREIT | 0.12 | 100.0 | 0.6 | 0.04 |
| Saul Centers | 0.66 | -1.5 | 1.2 | -0.01 |
| Sources: RBC Capital Markets, SNL Financial | ||||
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