In the call, company executives said that Q2 2007 FFO was $23 million, an increase of 3.4% from second quarter 2006, and total revenues increased 2.3% to $45.5 million for the same period. Also, the company's 14.4 million sf was 95.7% leased in Q2 2007, up 0.1% from the first quarter, but down slightly from Q2 2006. Finally, the company reported that net income was $10.7 million for the three months ending on June 30, a decrease of 12.6% compared to net income of $12.2 million for the three months ended June 30, 2006, and Q2 same-store sales dropped 1.1% to $29.2 million.
Mark Zalatoris, chief operating officer, said in the call that while cap rates are depressed, new development will help bolster investment returns. This includes land purchases in the Chicago and Minneapolis/St. Paul area, as well as an $11.9 million purchase of land in Fort Wayne, IN with Pine Tree Institutional Realty. "There is 32 acres where we plan 275,000 sf of multitenant retail, plus outparcels for ground lease or sale," Zalatoris said. "This joint venture has already inked a sale with Target for 12 acres, at a profit over the purchase of the land. Pine Tree continues to bring us additional projects for our consideration, an we expect to be doing new joint venture developments with them before year-end."The company also bought 74 acres in Lakemoor, IL for $27.5 million with Tucker Development, with a plan for 500,000 sf with outparcels. He said investments have also been transitioning through its 1031 arm, Inland Real Estate Exchange Corp., which includes three acquisitions: The 40,906-sf Apria Healthcare facility in Schaumburg, IL for $8.2 million; the 60,930-sf Delavan Crossing center in Delavan, WI for $9.6 million and a freestanding, 61,712-sf Rainbow Foods store in West St. Paul, MN for $6.9 million.
The company also reported 81 new leases in the second quarter, comprising 281,000 sf. Of these, 30 new leases were signed at an average of $22.40 per sf, while 51 leases were renewed at 15.76 per sf, said Zalatoris.
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