GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

First Potomac Realty Trust Reports Operating Results (10-Q)

August 07, 2009 | About:

First Potomac Realty Trust (FPO) filed Quarterly Report for the period ended 2009-06-30.

First Potomac Realty Trust is a self-administered self-managed real estate investment trust that acquires operates and develops industrial and flex properties in Maryland Virginia and the Washington D.C. metropolitan area. First Potomac Realty Trust has a market cap of $280 million; its shares were traded at around $10.2 with a P/E ratio of 5.5 and P/S ratio of 2.3. The dividend yield of First Potomac Realty Trust stocks is 7.8%. First Potomac Realty Trust had an annual average earning growth of 29.5% over the past 5 years.

Highlight of Business Operations:

The Companys funds from operations (FFO) for the second quarter of 2009 were $11.6 million, or $0.42 per diluted share ($0.37 per diluted share, excluding gains on the retirement of debt), compared to $11.8 million, or $0.47 per diluted share ($0.41 per diluted share, excluding gains on the retirement of debt), during the second quarter of 2008. The Companys net income attributable to common shareholders for the second quarter of 2009 was $1.6 million, or $0.06 per diluted share, compared with net income attributable to common shareholders of $16.3 million, or $0.67 per diluted share, for the second quarter of 2008. In June 2008, the Company sold its Alexandria Corporate Park property for a gain on sale of $14.3 million, or $0.57 per diluted share after noncontrolling interests.

The Companys FFO for the first six months of 2009 increased 17% over the prior-year period to $26.4 million, or $0.95 per diluted share ($0.74 per diluted share, excluding gains on the retirement of debt), compared with $22.5 million, or $0.90 per diluted share ($0.78 per diluted share, excluding gains on the retirement of debt), for the first six months of 2008. The Company reported net income attributable to common shareholders for the first six months of 2009 of $6.6 million, or $0.24 per diluted share, compared with net income attributable to common shareholders of $17.5 million, or $0.72 per diluted share, for the first six months of 2008.

Rental revenue is comprised of contractual rent, the impacts of straight-line revenue and the amortization of intangible assets and liabilities representing above and below market leases. Rental revenue increased $1.5 million and $3.9 million for the three and six months ended June 30, 2009, respectively, compared to the same period in 2008. The increase in rental revenue was primarily due to the 2008 Acquisitions, which resulted in additional rental revenue of $0.4 million and $1.3 million for the three and six months ended June 30, 2009, respectively. The Remaining Portfolio contributed $1.1 million and $2.6 million of additional rental revenue for the three and six months ended June 30, 2009, respectively, compared to 2008 due to an increase in rental rates when compared to the prior year. The increase in rental rates was slightly offset by a decrease in occupancy as the Companys portfolio occupancy was 86.5% at June 30, 2009 compared to 86.6% at June 30, 2008.

Property operating expenses increased $1.8 million and $3.4 million for the three and six months ended June 30, 2009, respectively, compared to the same period in 2008. Property operating expenses for the Remaining Portfolio increased $1.6 million and $2.9 million during the three and six months ended June 30, 2009, respectively, compared to the same period in 2008, primarily due to higher bad debt expense, snow and ice removal costs and utility expense. The Companys 2008 Acquisitions contributed $0.2 million and $0.5 million of additional property operating expenses for the three and six months ended June 30, 2009, respectively. In anticipation of higher tenant credit losses, the Company increased its reserves for bad debt expense in the second quarter of 2009, which contributed bad debt expense of $1.0 and $1.4 million for the three and six months ended June 30, 2009, respectively.

The increase in total property operating expenses for the three and six months ended June 30, 2009 compared to 2008 include $1.0 million and $1.9 million, respectively, for the Companys Maryland reporting segment, $0.3 million and $0.7 million, respectively, for the Northern Virginia reporting segment and $0.5 million and $0.8 million, respectively, for the Southern Virginia reporting segment. A significant portion of the Companys increase in bad debt reserves were associated with tenants in its Maryland reporting segment, specifically tenants in the Baltimore sub-market, which incurred $0.4 million and $0.6 million of additional bad debt expense for the three and six months ended June 30, 2009, respectively.

Real estate taxes and insurance expense increased $0.2 million and $0.6 million for the three and six months ended June 30, 2009, respectively, compared to the same period in 2008. The Remaining Portfolio contributed an increase in real estate taxes and insurance expense of $0.1 million and $0.4 million for the three and six months ended June 30, 2009, respectively, compared to 2008. The remaining $0.1 million and $0.2 million increase in real estate taxes and insurance for the three and six months ended June 30, 2009, respectively, can be attributed to the 2008 Acquisitions.

Read the The complete ReportFPO is in the portfolios of Third Avenue Management.

Rating: 2.0/5 (3 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide