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NEW YORK CITY-The combined effects of the recession, the capital markets turmoil and an uncertain office market are eating into the dividends of a growing number of office REITs, causing some to either reduce or suspend the quarterly payments as they aim to preserve cash. SL Green Realty Corp. recently trimmed its fourth-quarter dividend to $0.375 per common share from the previous figure of $0.787, while Maguire Properties Inc. in Los Angeles suspended its preferred stock dividend after suspending its common stock dividend in mid-2008.

In a statement, CEO Marc Holliday of SL Green said that, given the present state of the current capital markets, “We have reset the dividend to reflect the company’s current policy to preserve internally generated cash flows.” He said that trimming the dividend would help to conserve approximately $95 million for the company in 2009. A Maguire statement said that the L.A.-based REIT was suspending its dividend as part of its ongoing efforts to improve the financial picture at the company, which has been refinancing debt, selling assets and implementing other measures ever since new CEO Nelson Rising took over from Maguire founder Rob Maguire last year.

As Holliday explained SL Green’s move, the dividend cut could help SL Green strategically in the long term. “Given the illiquidity of the market, the reset of the current dividend ensures that the company will have additional capital to take advantage of the highly attractive investment opportunities which we believe will materialize in our core market,” he said. Until those opportunities appear, SL Green will continue to use its cash to pay down its near-term debt.

A number of other office REITs have announced fourth-quarter dividend decisions in recent weeks, with some maintaining and some trimming their payouts. Among those who trimmed was Brandywine Realty Trust of Radnor, PA which reduced its latest common stock dividend to $0.30 from the $0.44 that it had been paying since July of 2006. The REIT provided no explanation for the reduction in its statement regarding the dividend.

Among those that have maintained the same dividend is Boston Properties Inc., which declared a payout of $0.68 per share on its common stock, maintaining the same rate as it has paid since May of 2005. Another maintaining its dividend is Edison, NJ-based Mack-Cali Realty, which declared a dividend of $0.64 per common share, the same rate that it has paid since the third quarter of 2006, and a $0.50 per share dividend on its preferred stock, the same rate that it has been paying since the third quarter of 2003.

Alexandria Real Estate Equities Inc. of Pasadena, CA maintained the same $0.80 common stock dividend that it has been paying since June in a dividend history that shows a steadily increasing trend for the specialist in life sciences space. Along with declaring the dividend, the REIT reported another strong quarter of leasing, with deals at facilities like its 1500 Owens St. in San Francisco, California and at Technology Square in Cambridge, Massachusetts.

In addition to declaring its dividend, Alexandria company noted that it has arranged an extension to 2010 of a key $175 million debt maturity that was formerly scheduled to mature this year. The debt maturity extension typifies the attention that REITs are paying to their balance sheets lately, with many of them husbanding their cash to ensure that they keep debt under control.

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