Prentiss Properties Reports Funds From Operations Steady With a Year Ago

DALLAS-Prentiss Properties Trust said Tuesday its funds from operations totaled $37.7 million or 85 cents per share for the second quarter ended June 30, about on par with the same quarter a year ago.

Meanwhile, the company says its operating earnings were $17.9 million or 41 cents per diluted share, down from $19.4 million or 46 cents/share for the same quarter a year ago. Revenue totaled $92.2 million, up from $85.6 million during the 20001 second quarter.

The Burnett Plaza and Park West at Dulles Corner acquisitions helped both revenue and earnings, the company says in a prepared statement. The results were hurt by the expiration of the AON lease at 123 North Wacker and an overall decline in occupancy.

Thomas F. August, president and CEO of Prentiss Properties, says in the statement his company is maintaining a conservative position for the next 18 months with less than $3 million of its debt maturing, only 13% of its office leases up for renewal and only one development project in the offing.

The company is closely monitoring the credit of its tenants “in light of the recent events in corporate America,” he says.

The company says its average straight-line net rents for new office leases during the quarter was up 1% over average straight-line net rents for expiring leases.

Prentiss also says its office portfolio occupancy rate was 92.2% at the end of the second quarter, slightly better than the 92.0% at the end of the first quarter but down from the 95.8% at the end of the second quarter of 2001.

Meanwhile, the company says its industrial portfolio occupancy stood at 97.9% at the end of the second quarter, down from 100% occupied at the end of the first quarter and up from 96.6% at the end of the second quarter last year.

As of June 30, the company says it had $83.7 million or 445,000 sf of office developments under way. These developments are 56% leased, with expected first-year stabilized cash-on-cash yields of 10.2%.

During the second quarter, the company renewed its $300 million corporate line of credit and completed a $72.1 million, non-recourse mortgage financing collateralized by Burnett Plaza in Fort Worth, TX. The loan has an initial term of three years with two one-year extension options.

Prentiss says it owns about 90 acres for future office development which could handle about 3.8 million sf of leasable space. The tracts are primarily adjacent to existing company-owned properties.