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Home Properties FFO drops due to exit from new development

Rochester Business Journal
August 1, 2014

Home Properties Inc. reported a decrease in funds from operations in the second quarter due, in part, to its decision to exit the business of developing new apartment communities.

The firm, which reported after markets closed Thursday, posted FFO of $1.04 a share, compared with $1.11 a share, a year ago. The decrease was primarily attributable to $3.8 million in charges related to the company’s exit from new development.

Sales were $168.4 million, up from $162.4 million during last year’s quarter.

Earnings per share were 39 cents, compared with 51 cents a year ago. The 12-cent reduction primarily was attributed to onetime charges of some $3.8 million in connection with the company’s exit from the business of developing new apartment communities and lower gains on the disposition of property in 2014.

Shares of Home Properties (NYSE: HME) were trading midday at $64.15, down more than 2 percent from Thursday’s close of $65.79.

Home Properties this week said its two projects under construction in Pennsylvania and Maryland will be completed, but no additional new communities will be started. The business said it has developed seven Class A projects valued at more than $530 million.

“We believe that it is in the best interest of the company’s stockholders for us to dissolve our new-development platform and focus 100 percent on our core differentiating strategy of acquiring and redeveloping mature apartment communities,” said Edward Pettinella, Home Properties president and CEO, in a statement.   

The company guidance on FFO per share results for the third quarter is $1.11 to $1.15.

(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.
 






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