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Arden Realty's Profit for Quarter Drops 36%

The L.A.-based office building owner cites the sagging economy. But it reports that rents are up 9% on lease renewals.

October 29, 2002|Roger Vincent | Times Staff Writer

Arden Realty Inc., one of Los Angeles' largest office building owners, said Wednesday that third-quarter profit fell about 36% from a year earlier as the Southern California office rental market continues to soften.

Arden made $15.1 million, or 23 cents a share, compared with $23.5 million, or 37 cents a share, a year earlier.

Revenue at the Los Angeles-based real estate investment trust fell 1.5%, to $104.9 million, in the period ended Sept. 30.

Arden's funds from operations, a key measure for many real estate companies, also declined, to $43.2 million, or 65 cents a share, from $50.1 million, or 76 cents a share.

Third-quarter occupancy of Arden properties slipped to 90% from 94% a year earlier. Average rents fell by 1% or 2%, Chief Financial Officer Rick Davis said.

Still, Arden usually was able to raise the rates on tenants renewing leases they signed a few years ago, Davis said. Rents are up 9% on renewed leases.

Arden's results are being dragged down by the flagging economy, Davis said.

"Tenants aren't expanding," he said. "Tenants are just waiting to make those leasing decisions."

Arden shares fell 20 cents Monday to $21.70 on the New York Stock Exchange. The firm announced its earnings report after the close of financial markets.

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