By Tess Stynes
Prologis Inc.'s (PLD) third-quarter loss narrowed as the
warehouse real-estate investment trust continued to benefit from a
recovering rental market.
For the year, the company narrowed its per-share estimate for
adjusted funds from operations--a key measure of performance for
REITs--to $1.64 to $1.66, from its previous estimate for per-share
adjusted FFO of $1.63 to $1.67.
The new Prologis was formed in June 2011 when the nation's two
biggest publicly traded warehouse owners--Prologis and AMB Property
Corp.--merged in one of the largest real-estate deals since the
recession.
The San Francisco-based real-estate investment trust has
continued to benefit from a rental rebound that has raised
occupancy rates and profits on its U.S. warehouses.
"Market conditions are improving faster than expected with rent
growth across our markets in the U.S. and broadening in Europe,"
Chairman and Chief Executive Hamid R. Moghadam said. "Utilization
in our facilities is running at an all-time high. The demand we're
seeing is, by and large, just to keep up with current needs and not
for future expansion."
Prologis reported a loss of $5.4 million, compared with a
year-earlier loss of $36.2 million. On a per-share basis, which
includes preferred-stock impacts, the loss was two cents, compared
with a year-earlier loss of 10 cents. The latest period included a
net $114.2 million in early-debt extinguishment losses.
Revenue increased 14% to $430.2 million. Rental revenue grew 19%
to $379.3 million.
Core funds from operations--which excludes items such as gains
and losses from property acquisitions or dispositions--were down at
41 cents a share from 49 cents a share. The year-earlier period
included a tax benefit of six cents.
Analysts polled by Thomson Reuters recently expected per-share
FFO of 41 cents and rental revenue of $383.4 million.
As of Sept. 30, the occupancy rate was 93.9%, up from 93.1%
reported a year earlier. Tenant retention was 80.8% and rental
rates on leases signed during the quarter were 6.1% higher than
in-place rents.
Shares closed Tuesday at $40.68 and were inactive in recent
premarket trading. The stock is up 11% this year.
Write to Tess Stynes at tess.stynes@wsj.com
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