As part of its effort to enhance its share of flex space in the Valwood submarket of Dallas, Texas, PS Business Parks Inc. (PSB - Free Report) acquired nine multi-tenant flex buildings. The company shelled out $12.4 million for the acquisition of these properties that span 245,000 square feet of space.
Currently 83.5% leased, these properties are advantageously located close to the parks, which are owned by the company and have an average tenant size of 6,400 square feet of space.
Moreover, earlier in the fourth quarter, PS Business Parks bought four multi-tenant flex parks with a 4-acre land parcel in Dallas, Texas. The assets, aggregating 559,000 square feet, were acquired for $27.9 million. The buyout included the purchase of 303,000 square feet of space in Valwood submarket, which made PS Business Parks the submarket’s largest owner of flex space. Furthermore, the most recent acquisition enhanced the company’s flex space in the Valwood submarket to 548,000 square feet.
PS Business Parks’ portfolio in diversified markets enables it to tap opportunities and defuse operating risks associated with the economic down cycles. The company aims to capitalize on opportunities present in both existing and new high growth markets through accretive acquisitions. Therefore, we believe that the current acquisitions would help improve growth metrics, enabling the company to emerge stronger once the real estate markets fully recover.
Last month, PS Business Parks reported its third-quarter 2013 results with adjusted FFO (fund from operations) per share of $1.21, beating the Zacks Consensus Estimate by a penny and the year-ago quarter figure by 2 cents. An uptick in net operating income in Same Park as well as Non-Same Park facilities aided the results.
PS Business Parks, in which Public Storage (PSA - Free Report) possesses a notable common equity interest, currently has a Zacks Rank #3 (Hold). Two other REIT stocks that are performing well and deserve a look are Cousins Properties Inc. (CUZ - Free Report) and CubeSmart (CUBE - Free Report) , which carry a Zacks Rank #2 (Buy).
Note: FFO, 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.