ProLogis (PLD) swung to a third-quarter loss as the warehouse
real-estate investment trust wrote down properties and other
assets.
Chief Executive Walter C. Rakowich said the company began to see
signs during the quarter that industrial-property market fundaments
are "firming up," although he cautioned that "one quarter does not
signal a trend."
Shares of ProLogis, which narrowed its profit forecast for the
year, rose 1.5% premarket to $11.90. The stock was down 16% this
year through Wednesday.
REITs have faced upheaval amid weak retail sales and poor demand
outlooks for warehouse and factory space. ProLogis, the world's
biggest warehouse manager and developer, has scrambled in the past
year to pay down and refinance debt it took on during a growth
spurt in recent years that included acquisition and speculative
construction.
For the third quarter, ProLogis swung to a loss of $11.8
million, or 3 cents a share, from year-earlier profit of $32.2
million, or 12 cents a share, a year earlier. Funds from
operations, a key profit measure for REITs, fell to 14 cents from
59 cents.
Rental revenue dropped 0.2% to $225.1.
Analysts polled by Thomson Reuters most recently forecast FFO of
14 cents on rental revenue of $228 million.
At the end of the quarter, its non-development portfolio was
92.7% leased, compared with 92.5% at June 30.
ProLogis, which owns more than 475 million square feet of
industrial space across the U.S., Europe and Asia last month
unveiled a global renewal energy group to help advance its business
of leasing roofs for solar installations. The company estimates the
projects could generate about $2 million to $3 million in annual
lease payments and more than $15 million in construction management
fees.
-By Tess Stynes and Mike Barris, Dow Jones Newswires;
212-416-2481; Tess.Stynes@dowjones.com