BRE Properties Chief Financial Officer Resigns

The company has no immediate plans to commence a search for a new CFO. Instead, Edward F. Lange Jr., currently chief operating officer, will assume the role, one he previously held. He served as CFO from mid-2000 to through 2006, then served as both CFO and COO until Hirvela joined the company in May 2008.

Hirvela could not be reached Thursday evening for comment. Shares of BRE Properties gained $3.91 (14%) on Thursday in a rising market to close at $31.55.

BRE Properties owns and operates 75 apartment communities totaling 22,166 units in California, Arizona and Washington. The total does not include 13 properties totaling 4,080 units in which the company has a joint venture interest seven other wholly-owned properties totaling 2,077 units that are in various stages of development and construction.

Earlier this month, the company reported third quarter net income of $41.6 million, or $0.80 per share, as compared with $51.4 million, or $0.99 per share, for the same 2007 period. FFO totaled $37.8 million, or $0.72 per share, as compared with $32.4 million, or $0.62 per share, for the same 2007 period.

Same-store net operating income (NOI) growth was 2.9% for the quarter, as compared with the same period in 2007, driven by revenue growth of 3.5% for the quarter. Average same-store market rent for the third quarter 2008 increased 2.8% to $1,530 per unit, from $1,489 per unit in third quarter 2007. Physical occupancy levels averaged 95% during third quarter 2008 as compared to 94.3% in the same period 2007. Physical occupancy at the end of the third quarter was 95.2%. Rent concessions in the same-store portfolio totaled $1.4 million, or 7.3 days rent, for third quarter 2008, as compared with $350,000, or 1.9 days, for the same period 2007.

"Same-store results depict stable operating conditions in San Diego, the San Francisco Bay area and Seattle, which represent 53% of the company's same-store NOI," the company said. "Operating results in Los Angeles, Orange County and the Inland Empire (San Bernardino and Riverside Counties), which represent 40% of the company's same-store NOI, reflect continuing weak market fundamentals from continuing job losses and excess supply of single-family housing."

In the third quarter, BRE sold three stabilized properties (554 units) in Sacramento--Pinnacle at Blue Ravine, Canterbury Downs and Rocklin Gold--for a total of approximately $73.8 million and recorded a total net gain on sale in the quarter of approximately $24.8 million, or $0.48 per share. The composite cap rate for these transactions, calculated on trailing 12 months of property-level NOI, was 6.13%.

Subsequent to the end of the quarter, the company also sold Park at Dash Point, in Federal Way, Washington, 280 units, for approximately $30 million, and a recorded gain on sale of approximately $15 million ($0.29 per share) for the fourth quarter. The cap rate for this transaction was 5.7%.

Proceeds derived from the sales were used to repay floating rate debt. The company said it remains on target to realize $150 million to $200 million in proceeds from asset sales in 2008.

"Based on the transactional data we have seen and the information we're receiving on pending or proposed transactions, the composite cap rate for our portfolio has moved up about 65 basis points over the last year to 5.65%," company president Constance Moore told analysts last week.