Prologis, Inc (
, a real estate investment trust (REIT),reported third quarter
2012 funds from operations (FFO as defined by Prologis) of $209.9
million or 44 cents per share, compared with $211.4 million or 45
cents in the year-earlier quarter.
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Core FFO for the reported quarter was $236.1 million or 49 cents
per share compared to $210.1 million or 44 cents in the year-ago
quarter. The core FFO for third quarter 2012 exceeded the Zacks
Consensus Estimate by 6 cents.
Total revenues during the reported quarter were $512.1 million
compared to $469.1 million in the year-ago quarter. Total
reported revenues were well ahead of the Zacks Consensus Estimate
of $490 million.
During the reported quarter, the company leased 39.0 million
square feet of space across the globe. Total occupancy in the
operating portfolio was 93.1% at quarter-end. Customer retention
during the quarter was 87.5% during the reported quarter with
renewals totaling 25.6 million square feet. Same-store net
operating income (NOI) increased 2.7% in third quarter 2012,
compared to the year-ago quarter. Same-store rental rates on
leases signed in the quarter decreased 1.8%.
Development starts for the company during the reported quarter
amounted to $386 million spanning 4.4 million square feet.
Prologis monetized $91 million worth of land for these
development starts, 66% of which were build-to-suit projects.
The company spent $234 million on acquisitions, including $112
million worth of properties during the quarter, with a stabilized
capitalization rate of 7.0% and an investment of $122 million in
land infrastructure. At quarter-end, Prologis' global development
portfolio totaled 16.3 million square feet, with an estimated
total investment of $1.5 billion.
Prologis completed approximately $174 million worth of asset sale
transactions and contributions during the quarter at a weighted
average stabilized capitalization rate of 7.0%. The third-party
asset sales were consistent with the company's stated goal to
sell assets in non-strategic markets and redeploy the proceeds to
fund new development in major global markets, thereby
diversifying and improving the quality of its portfolio.
Year-to-date, through September 30 2012, the company received
commitments for $330 million in new third-party equity in its
private capital business. Prologis completed over $378 million
worth of capital market activities in the quarter. At
quarter-end, Prologis had cash and cash equivalents of $158.2
million and total debt of $12.6 billion. For full year 2012,
Prologis increased its core FFO guidance in the range of $1.72 to
$1.74 per share from the earlier range of $1.64 to $1.70.
Prologis currently retains a Zacks #2 Rank, which translates into
a short-term Buy rating. We are also maintaining our long-term
Neutral recommendation on the stock. One of its competitors
PS Business Parks Inc (
currently retains a Zacks #4 Rank, which translates into a
short-term Sell rating.
Note: FFO, a widely used metric to gauge the
performance of real estate investment trusts (REITs), is obtained
after adding depreciation and other non-cash expenses to net