Back to top

Analyst Blog

BRE Properties Inc () reported third quarter 2011 funds from operations (FFO) of $41.5 million or 55 cents per share versus $30.6 million or 47 cents per share in the year-earlier quarter.

Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. FFO per share in the quarter was in line with the Zacks Consensus Estimate.

Total revenue from continuing operations during the third quarter was $96.7 million versus $87.2 million in the year-ago quarter. Total revenue was ahead of the Zacks Consensus Estimate of $94 million.

Adjusted earnings before interest, tax depreciation and amortization (EBITDA) were $60.9 million in third quarter 2011 compared with $57.1 million in the year-earlier quarter.

Overall same-store revenues and net operating income increased 3.7 % and 4.0%, respectively, driven by a 4.3% growth in revenue earned per unit during the quarter. Average physical occupancy in the same-store portfolio was 95.7%. Of the 21,971 apartment units owned directly by BRE, same-store units totaled 19,275 for the quarter. Average revenue per occupied unit in the reported quarter was $1,504.

The company acquired a 151-unit community in Lafayette, California for a total consideration of $48.8 million and is currently 97% occupied.

At quarter end, BRE had a 336 unit community under construction in Sunnyvale, California, which is expected to be completed by the first quarter of 2013 and Aviara, a166-unit community in Mercer Island, Washington, which is expected to be completed by the second quarter of 2013.

The company approved a quarterly dividend of 37.5 cents per share, equivalent to $1.50 on an annualized basis. Since its inception in 1970, BRE has paid quarterly dividends uninterruptedly.

For the fourth quarter of 2011, BRE expects FFO in the range of 55 cents to 57 cents per share. For full-year 2011, BRE revised the guidance range from $2.09-$2.17 per share to $2.12-$2.14 per share.

BRE currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Equity Residential (EQR - Analyst Report) also holds a Zacks #3 Rank.

Please login to Zacks.com or register to post a comment.