), a leading real estate investment trust (REIT), reported second
quarter 2012 funds from operations (FFO) of $172.7 million or 37
cents per share compared with $8.2 million or 3 cents in the
Excluding non-recurring items, FFO for the reported quarter was
$201.3 million or 43 cents per share compared to $109.7 million or
35 cents in the year-ago quarter. The recurring FFO for second
quarter 2012 marginally exceeded the Zacks Consensus Estimate by a
Total revenues during the reported quarter were $520.7 million
compared to $320.9 million in the year-ago quarter. Total reported
revenues were well ahead of the Zacks Consensus Estimate of $481
During the reported quarter, the company leased 35.0 million square
feet of space across the globe. Total occupancy in the operating
portfolio was 92.4% at quarter-end. Customer retention during the
quarter was 82.4% during the reported quarter.
Same-store net operating income (NOI) increased 0.4% in second
quarter 2012, compared to the year-ago quarter. Same-store rental
rates on leases signed in the quarter decreased 3.9% year over
Development starts for the company during the reported quarter
amounted to $229 million spanning 3.7 million square feet of space
across 9 projects. Prologis monetized $52 million worth of land for
these development starts, 70% of which were build-to-suit projects.
The company acquired $85 million worth of properties during the
quarter, totaling 1.5 million square feet of space in 13 logistics
facilities with a stabilized capitalization rate of 7.2%. At
quarter-end, Prologis' global development portfolio totaled 13.5
million square feet, with an estimated total investment of $1.3
Prologis completed approximately $228 million worth of asset sale
transactions and contributions during the quarter at a weighted
average stabilized capitalization rate of 7.6%. 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.
During the reported quarter, the company raised new third-party
equity commitments of approximately $163 million for the Prologis
Targeted U.S. Logistics Fund. Prologis completed over $1.2 billion
worth of capital market activities in the quarter.
At quarter-end, Prologis had cash and cash equivalents of $293.6
million and total debt of $12.4 billion. For full year 2012,
Prologis increased its recurring FFO guidance in the range of $1.64
to $1.70 per share from the earlier range of $1.60 to $1.70.
WINTHROP REALTY (FUR): Free Stock Analysis
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We currently have a Neutral recommendation and a Zacks #3 Rank for
Prologis, which translates into a short-term Hold rating. However,
we have an Outperform recommendation and a Zacks #3 Rank for
Winthrop Realty Trust
), one of the peers of Prologis.
Note: 1. 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 income.
2. The second quarter 2011 comparative results include two months
of the namesake and approximately one month of the combined company
of ProLogis and AMB Property Corp. and are not directly comparable
to the 2012 reported results.