Brookfield Office Properties Q2 FFO Declines, Misses View

(RTTNews) - Commercial real estate firm Brookfield Office Properties, Inc. (BPO, BPO.TO) reported Friday funds from operations or FFO, for the second quarter that declined from last year, and FFO per share missed analysts' expectations. However, net profit for the quarter increased from last year, and same property net operating income also grew by 1.9 percent.

The New York-based company reported FFO, a key measure of real estate firms' profitability, of $162 million or $0.28 per share for the second quarter, down from $171 million or $0.30 per share in the prior-year quarter.

On average, 13 analysts polled by Thomson Reuters expected earnings of $0.30 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net income attributable to shareholders for the quarter surged to $441 million or $0.78 per share from $217 million or $0.38 per share in the year-ago quarter.

Commercial property revenue for the quarter grew to $569 million from $549 million in the same quarter last year. Three Wall Street analysts had a consensus revenue estimate of $602.71 million for the quarter.

Commercial property net operating income rose to $344 million from $342 million last year, and fair value gains were $292 million, compared to $167 million last year.

Same property net operating income for the second quarter increased by 1.9 percent.

The company said it leased 1.6 million square feet of space during the quarter at an average net rent of $29.41 per square foot, representing an 11 percent increase over expiring net rents in the period. Portfolio occupancy rate finished the quarter at 91.7 percent.

The company's board of directors declared a quarterly common share dividend of $0.14 per share, payable on September 30 to shareholders of record at the close of business on August 30, 2013.

Looking ahead, CEO Dennis Friedrich said, "The second quarter of 2013 marked a new phase of growth for Brookfield Office Properties as we announced the proposed acquisition of the MPG portfolio in Los Angeles and advanced the construction of the second tower at Brookfield Place Perth."

In Friday's regular trading session, BPO is currently trading at $17.04, down $0.18 or 1.05% on a volume of 50,273 shares.