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Arden Profit Falls 30% in Hard Market for Landlords

October 30, 2003|Roger Vincent | Times Staff Writer

Commercial property owner Arden Realty Inc. said Wednesday that profit decreased 30% for the third quarter as the office market continued to favor tenants at the expense of landlords.

The Los Angeles real estate investment trust reported net income of $10.5 million, or 16 cents a share, down from $15.1 million, or 23 cents, a year earlier.

Revenue increased 5.4% to $105 million from $99.6 million.

Arden's funds from operations, a key measure of profitability for REITs, totaled $41.9 million, or 64 cents a share, compared with $43.2 million, or 65 cents, a year earlier.

Occupancy in the company's 18.9-million-square-foot portfolio slightly improved to 89.9%, from 89.7% a year earlier and 89.5% at the end of the second quarter.

"These are tough times for property owners," said Los Angeles money manager Craig Silvers of Bricks & Mortar Capital, who holds shares in Arden. "It looks like they are going to do better than the market."

Tenants probably will have the upper hand in rent negotiations until at least 2005, Silvers said.

Shares of Arden rose 20 cents to $28.40 on the New York Stock Exchange.

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