Locally based Duke Realty Corp. reported a drop in funds from operations of 53 percent for the fourth quarter and said 2010 will be "another challenging year."
The owner and manager of office, industrial and retail properties said Wednesday evening that funds from operations, absent one-time items, fell to $72.6 million, or 31 cents a share, for the quarter that ended Dec. 31, from $232 million, or 67 cents a share, during the same period last year.
Still, the results managed to beat Wall Street analyst expectations of 28 cents per share in FFO. The measure is used by the real estate industry to gauge operating performance, adding depreciation and amortization expenses, as well as other non-operating items, back to net income.
The company posted a loss attributable to common shareholders of $3 million, or 2 cents a share, for the quarter. That compares with a profit of $20.1 million, or 13 cents a share, in the prior-year period.
Duke attributed the drop to one-time gains from the purchase of stock and debt and the dilution from an equity offering. Revenue from the company's operations fell 11 percent, to $340.2 million.
But Duke also raised its occupancy rate during the quarter to 87.8 percent and managed to cut its expenses by 10 percent from a year ago. The company sold $150 million in properties and land, and renewed an $800-million credit line that had a zero balance as of Dec. 31.
"During 2009 we made significant progress on the capital side of our business, raising over $1.6 billion," Duke CEO Dennis D. Oklak said in a statement. "As we look forward to 2010, we expect economic conditions to remain challenging; however, we will continue to execute on our operating, capital and asset strategies."
The company predicts its FFO for 2010 will be in the range 95 cents to $1.15 per share, in line with analyst expectations of $1.11.
The Associated Press contributed to this story.