REIT's earnings beat expectations, rise 7% because of rent growth Real estate

October 30, 1998|By BLOOMBERG NEWS

Federal Realty Investment Trust, the sixth-largest U.S. owner of shopping centers, said third-quarter earnings rose a better-than-expected 7 percent on rent growth.

The Rockville-based company, a real estate investment trust, said funds from operations rose to $21.4 million, or 54 cents a share, from $20 million, or 51 cents, in the year-earlier period. The company's revenue rose 18 percent to $59 million from $49.8 million.

Funds from operations, considered the best measure of a REIT's performance, beat Wall Street's expectations of 53 cents a share, according to a survey of nine analysts by First Call Corp. Federal Realty stock, which is down 12 percent this year, rose 56.25 cents yesterday to $22.5625.

"We remain optimistic about our long-term growth prospects," Steve Guttman, president and chief executive, said in a statement.

Rents on leases signed during the quarter rose 10 percent from the same period last year, while the company's properties were 95 percent occupied as of Sept. 30.

Federal Realty said it cut back its acquisition team, resulting in a 15 percent reduction in its work force, in an effort to boost profit and control costs. The company reported a $4.7 million charge in the third quarter as a result of the restructuring.

Many REITs curtailed acquisition plans in recent months and cut staff because of a slump in their stock prices and a drop-off in real estate lending.

Federal Realty owns 120 shopping center and retail projects across the country.

Last month, the company formed an alliance with Post Properties Inc., one of the biggest apartment REITs in the country, to develop urban projects combining retail, residential and entertainment components in downtown areas.

Pub Date: 10/30/98

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