DOW JONES NEWSWIRES ProLogis' (PLD) first-quarter loss narrowed sharply amid fewer charges though the warehouse real-estate investment trust saw weaker revenue. "Globally, the gradual recovery in industrial real-estate continues, with new supply in the major logistics markets still constrained and demand remaining stable," Chief Executive Walter C. Rakowich said. However, the pace of the recovery slowed in the latest period amid concerns about sovereign debt, rising oil prices and crises in Japan. The industrial property-focused real-estate investment trust's losses have widened lately, though it has also improved its core results. The commercial real-estate market, battered by the downturn as demand for space in offices, warehouses and apartment buildings slumped, has largely stabilized and shown some signs of recovery. ProLogis has been at the center of consolidation in the industry, agreeing in January to an all-stock merger with AMB Property Corp. (AMB) and saying last week it planned to make an offer for ProLogis European Properties (PERP.AE) that valued the Euronext-listed warehouse developer at about EUR1.2 billion ($1.73 billion) at the time. ProLogis reported a loss of $40.2 million, or 8 cents a share, compared with a year-earlier loss of $91.1 million, or 19 cents a share. Core funds from operations--a key profitability metric for REITs--rose to 13 cents a share from 11 cents. The latest period excluded 2 cents in restructuring-related and other charges and net charges of 10 cents a year earlier. Revenue fell 9.9% to $238.8 million, though rental income dropped 6.7%. Analysts polled by Thomson Reuters most recently predicted FFO of 15 cents on $219.8 million in revenue. At the end of the quarter, ProLogis' industrial operating portfolio was 90.7% leased, down 0.3 percentage point from a year earlier. Later Wednesday, ProLogis' merger partner AMB said it swung to the black in the most recent quarter. It reported a profit of $12.1 million, or 5 cents a share, compared with a prior-year loss of $151,000, or 3 cents a share. The per-share figures include preferred dividends and allocation to participating securities. Core FFO, as adjusted, rose to 32 cents from 29 cents. Revenue rose 7.6% to $165.8 million. Analysts had expected FFO of 32 cents and revenue $157 million in revenue. The combination of the two companies--the biggest publicly traded warehouse owners in the U.S.--would be one of the biggest real-estate deals since the recession. ProLogis shares closed Tuesday at $16.08, while AMB closed at $36.12. Both were inactive premarket. -By Matt Jarzemsky and Tess Stynes, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com
