DENVER, Feb. 12 /PRNewswire-FirstCall/ -- DCT Industrial Trust Inc. (NYSE: DCT), a leading industrial real estate investment trust, today announced financial results for the fourth quarter and year ended December 31, 2008.
Funds from operations (FFO) attributable to common stockholders totaled $20.6 million, or $0.10 per diluted share, for the fourth quarter of 2008, and $114.0 million, or $0.55 per diluted share, for the year ended December 31, 2008, which includes non-cash impairment charges related to the valuation of real estate. Excluding impairment charges of $9.6 million, FFO for the fourth quarter of 2008 would have been $30.2 million, or $0.15 per diluted share. Excluding impairment charges of $10.7 million, FFO for the year ended December 31, 2008 would have been $124.7 million, or $0.60 per diluted share. This compares to FFO of $0.18 per diluted share for the fourth quarter of 2007 and $0.69 per diluted share reported for the year ended December 31, 2007.
Net loss attributable to common stockholders for the fourth quarter of 2008 was $12.6 million, or $0.07 per diluted share, and net income for the year ended December 31, 2008 was $9.5 million, or $0.06 per diluted share. Excluding impairment charges, net loss for the fourth quarter of 2008 would have been $4.6 million, or $0.03 per diluted share, compared with net income of $5.7 million, or $0.03 per diluted share, reported for the fourth quarter of 2007. Excluding impairment charges, net income for the year ended December 31, 2008 would have been $18.4 million, or $0.11 per diluted share, compared with net income of $40.1 million, or $0.24 per diluted share, for the year ended December 31, 2007.
Net income for the full year 2008 includes approximately $22.0 million of gains on the contribution or sale of real estate, of which $0.2 million was recognized in FFO. Net income for the full year 2007 included $42.9 million of gains on the contribution or sale of real estate, of which $15.1 million was recognized in FFO.
Balance Sheet
DCT Industrial's balance sheet remains strong, with consolidated debt to book value of total assets (before depreciation and amortization) of 38.4% as of December 31, 2008, compared with 37.4% as of December 31, 2007. The Company's fixed charge coverage for the fourth quarter of 2008 was 2.8 times, excluding non-cash impairment charges.
'We remain focused on our two top priorities - portfolio leasing and balance sheet management,' commented Phil Hawkins, Chief Executive Officer of DCT Industrial Trust. 'Despite challenging market conditions, we delivered solid operating results in the fourth quarter of 2008, including total leasing of 2.5 million square feet, tenant retention of 79.0%, and cash same store net operating income growth of 3.4%. Early renewals, realistic rents and an emphasis on credit continue to be key components of our overall leasing strategy. Our balance sheet remains strong with liquidity (cash and capacity on our credit facility) of more than $300 million, while capital deployment is still essentially on hold and we continue to market non-strategic assets for potential sale in order to raise additional capital.'
Operating Portfolio
As of December 31, 2008, the Company owned 373 consolidated operating properties, or 52.1 million square feet. Net operating income was $47.1 million in the fourth quarter of 2008, compared with $47.6 million reported for the fourth quarter of 2007. DCT's consolidated operating portfolio occupancy was 93.2% as of December 31, 2008, compared with 91.9% as of September 30, 2008, and 93.8% as of December 31, 2007. Including an additional 15.0 million square feet of operating properties held in joint ventures, occupancy as of December 31, 2008 was 94.3%, compared with 93.2% as of September 30, 2008, and 94.8% reported a year ago.
Same store net operating income grew 3.4% on a cash basis and 2.3% on a GAAP basis, excluding lease termination fees and lease buy-outs, in the fourth quarter of 2008, when compared to the same period last year. Occupancy of same store properties was 93.2% as of December 31, 2008, compared with 93.7% as of December 31, 2007 and 92.0% as of September 30, 2008.
Leasing activity remained steady with 2.5 million square feet of leases signed during the fourth quarter and 10.4 million square feet of leases signed during the full year 2008. Tenant retention was 79.0% for the fourth quarter of 2008 and 76.3% for the full year. Realized rent growth on signed leases for which there was a prior tenant averaged 10.4% on a GAAP basis and 6.8% on a cash basis in the fourth quarter of 2008.
Institutional Capital Management
DCT Industrial's institutional capital management business had assets under management of $772.1 million as of December 31, 2008, representing an increase of $85.8 million from December 31, 2007. Capital management and other fee revenue totaled $0.7 million in the fourth quarter of 2008, versus $1.1 million in the fourth quarter of 2007.
Dispositions and Capital Deployment Activity
During the year ended December 31, 2008, DCT Industrial Trust disposed of 16 buildings totaling 2.6 million square feet for a combined sales price of approximately $143.3 million, of which two buildings were sold during the fourth quarter of 2008.
The Company acquired $23.3 million of assets during 2008, primarily related to 1031 exchange requirements.
DCT Industrial has continued to reduce the size of its development pipeline. As recently announced, the Company leased 557,000 square feet at Southcreek IV in Atlanta, bringing the 1.8 million square foot Southcreek Commerce Center to 100% leased. In Monterrey, Mexico, the Company stabilized or sold 389,000 square feet during the fourth quarter of 2008. As of February 12, 2009, DCT Industrial Trust had 7.2 million square feet under development, which includes 1.9 million square feet in a 50-50 development joint venture, compared with 8.3 million square feet under development as of September 30, 2008.
Financing Activity
During the fourth quarter of 2008, the Company drew the remaining $200 million of its $300 million unsecured term loan, using the majority of the funds to pay down the balance on its credit facility. As of December 31, 2008, DCT Industrial's credit facility was undrawn. Including extension options, DCT Industrial does not have any significant debt maturities until December 2010 when its credit facility will mature.
Impairment Charges
Due to the impact that the economic and credit market deterioration has had on the value of commercial real estate, DCT Industrial evaluated its consolidated and unconsolidated assets for possible impairments. As a result, the company has recorded an impairment charge of $9.0 million for three land parcels and two buildings where the carrying value exceeds book value. In addition, impairments recorded on buildings sold during 2008 were $1.7 million, bringing total non-cash impairment charges for the year to $10.7 million, of which $9.6 million was recognized in the fourth quarter.
Dividend
DCT Industrial Trust's Board of Directors has declared an $0.08 per share quarterly cash dividend, payable on April 17, 2009, to stockholders of record as of April 8, 2009.
Guidance
DCT Industrial reiterated guidance for 2009 FFO of $0.50 to $0.58 per diluted share and revised its 2009 net income guidance to $0.01 to $0.07 per diluted share, which includes gains on sale of undepreciated real estate ranging from $0.00 to $0.04 per diluted share.
Conference Call Information
DCT Industrial Trust will host a conference call to discuss fourth quarter 2008 results and its recent business activities on Friday, February 13, 2009 at 12:00 PM Eastern time. Stockholders and interested parties may listen to a live broadcast of the conference call by dialing (800) 860-2442 or (412) 858-4600. A telephone replay will be available for one week following the call by dialing (877) 344-7529 or (412) 317-0088 and entering the passcode 426840. A live webcast and replay of the conference call will be available in the investor relations section of DCT's website at www.dctindustrial.com.
Supplemental information will be available in the Investor Relations section of the Company's website at www.dctindustrial.com or by e-mail request at investorrelations@dctindustrial.com. Interested parties may also obtain supplemental information from the SEC's website at www.sec.gov.
About DCT Industrial Trust
DCT Industrial Trust is a leading industrial real estate company that owns, operates and develops high-quality bulk distribution and light industrial properties in high-volume distribution markets in the U.S. and Mexico. As of December 31, 2008, the Company owned, managed or had under development 75.9 million square feet of assets leased to approximately 850 customers, including 14.6 million square feet managed on behalf of three institutional joint venture partners. Additional information is available at www.dctindustrial.com.
DCT INDUSTRIAL TRUST INC.
