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

November 06, 2009 | About:
Magic Diligence

10qk

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First Potomac Realty Trust (FPO) filed Quarterly Report for the period ended 2009-09-30.

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 $342.6 million; its shares were traded at around $11.96 with a P/E ratio of 6.5 and P/S ratio of 2.8. The dividend yield of First Potomac Realty Trust stocks is 6.7%. 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 third quarter of 2009 were $10.7 million, or $0.37 per diluted share ($0.35 per diluted share, excluding gains on the retirement of debt), compared with $9.4 million, or $0.38 per diluted share, during the third quarter of 2008. The Companys net income attributable to common shareholders for the third quarter of 2009 increased to $0.6 million, or $0.02 per diluted share, compared with net income attributable to common shareholders of $0.3 million, or $0.01 per diluted share, for the third quarter of 2008.

The Companys FFO for the first nine months of 2009 increased to $37.1 million, or $1.31 per diluted share ($1.09 per diluted share, excluding gains on the retirement of debt), compared with $32.0 million, or $1.28 per diluted share ($1.16 per diluted share, excluding gains on the retirement of debt), for the first nine months of 2008. The Company reported net income attributable to common shareholders for the first nine months of 2009 of $7.2 million, or $0.25 per diluted share, compared with net income attributable to common shareholders of $17.8 million, or $0.73 per diluted share, for the first nine months of 2008, which included a gain from the sale of a property of $14.3 million, or $0.57 per diluted share after noncontrolling interests.

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 $1.7 million and $5.6 million for the three and nine months ended September 30, 2009, respectively, compared with the same period in 2008. The increase in rental revenue was primarily attributable to the Remaining Portfolio, which had an increase of $1.3 million and $3.9 million of rental revenue for the three and nine months ended September 30, 2009, respectively, compared with 2008 due to an increase in rental rates when compared with the prior year. The increase in rental revenue was also attributed to an increase in occupancy as the Companys portfolio weighted average occupancy was 86.5% for the nine months ended September 30, 2009 compared with 86.3% for the nine months ended September 30, 2008. The 2008 Acquisitions contributed additional rental revenue of $0.4 million and $1.7 million for the three and nine months ended September 30, 2009, respectively.

Property operating expenses increased $1.0 million and $4.4 million for the three and nine months ended September 30, 2009, respectively, compared with the same period in 2008. Property operating expenses for the Remaining Portfolio increased $0.8 million and $3.6 million during the three and nine months ended September 30, 2009, respectively, compared with the same period in 2008, primarily due to higher bad debt expense and utility expense. The Companys 2008 Acquisitions contributed $0.2 million and $0.8 million of additional property operating expenses for the three and nine months ended September 30, 2009, respectively. In anticipation of higher tenant credit losses, the Company increased its reserves for bad debt expense in 2009, which contributed bad debt expense of $0.4 million and $1.8 million for the three and nine months ended September 30, 2009, respectively, compared with $0.2 million for both the three and nine months ended September 30, 2008.

Real estate taxes and insurance expense increased $10 thousand and $0.6 million for the three and nine months ended September 30, 2009, respectively, compared with the same period in 2008. The Remaining Portfolio experienced a $36 thousand decrease in real estate taxes and insurance for the three months ended September 30, 2009 compared with 2008 and an increase in real estate taxes and insurance expense of $0.4 million for the nine months ended September 30, 2009 compared with 2008. The 2008 Acquisitions contributed $47 thousand and $0.2 million of additional real estate taxes and insurance for the three and nine months ended September 30, 2009, respectively.

Real estate taxes and insurance for the three and nine months ended September 30, 2009 compared with 2008 increased $0.1 million and $0.4 million, respectively, for the Companys Maryland reporting segment. For the Northern Virginia reporting segment, real estate taxes and insurance decreased $0.1 million for the three months ended September 30, 2009 and increased $0.1 million for the nine months ended September 30, 2009. For the Southern Virginia reporting segment, real estate taxes and insurance increased $27 thousand and $0.1 million for the three and nine months ended September 30, 2009, respectively, compared with 2008.

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

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