AMB Returns to Profitability

AMB Property earned net profit of $29 million in the second quarter, down 67 percent from a year ago. The return to profitability after the dismal first quarter reduced the company’s loss for the first half of the year to $94.3 million.

Second quarter results included $3.8 million in restructuring charges.

As of June 30, the owner, operator and developer of industrial real estate completed property contributions and sales of $461 million, with a stabilized capitalization rate of 6.9 percent, year-to-date. During the second quarter, the company completed sales totaling $156 million, with a 7.8 percent capitalization rate.

"We have made excellent progress on our top two priorities through the first half of this year. As such, we have reduced our share of outstanding debt by approximately $750 million and our G&A costs by 30 percent on a run-rate basis," said Hamid R. Moghadam, chairman and CEO. "These accomplishments further enable us to navigate the current challenges in the operating environment and have positioned the company to take advantage of opportunities in the future."

During the quarter, the company commenced developments in Europe and the Americas totaling 221,000 square feet with a total estimated investment of $31 million. AMB's global development pipeline at quarter end totaled approximately 9 million square feet scheduled for delivery through 2010, with an estimated total investment cost of $758 million.

During the second quarter, the company commenced leases of approximately 5.8 million square feet. In its development pipeline, the company leased more than 434,000 square feet.

"Second quarter lease commencements in our operating portfolio are in line with our four year average and our expectations. Lease up of our development pipeline remains a high priority in this challenging environment. While we expect it will take some time for demand to rebound, we're encouraged by the recent increased number of showings and negotiations," said Moghadam.

AMB's operating portfolio was 90.5 percent occupied at June 30, 2009, with an average occupancy rate of 91.1 percent for the second quarter of 2009.

Contact Thomas L. Gallagher at tgallagher@joc.com.