REITS Continue to Outperform The Market by Lesley Hensell
Wall Street may be slowing down for the sweltering summer months, but real estate issues continue to turn in positive earnings and outperform the market. This week, Texas-based American Industrial Properties REIT (NYSE: IND) that second-quarter fund from operations (FFO) rose to 38 cents per share, compared to 35 cents in second-quarter 1999. The picture for the first half of the year looked even better, with per-share earnings rising to 75 cents from 68 cents a year ago. Income was up as well - 21 cents versus 20 cents for the second quarter, and 54 cents versus 37 cents for the first half of the year. AIP was rewarded on The Street with a minor bounce of $3/16 per share. The stock price is near its year-long high, which it hit earlier this month at $14. The stock has undulated between $10 and $14 for the year, with a steady climb out of the cellar beginning in March. "We believe these results are indicative of the growing demand for space in light industrial/office flex properties, particularly in those markets attractive to technology companies,” said Charles Wolcott, president and CEO of AIP. "We continue to believe our strategy of investing in flex properties in technology markets will result in attractive returns relative to other real estate property types.” In other news, Vectiv Corporation has launched an Application Service Provider (ASP) solution that it claims can reduce the real estate procurement cycle by one-third or more. The solution is geared toward retail businesses like Home Depot and McDonald’s – businesses with stated goals of opening more than 100 new locations each year. These companies often have outdated procurement systems that require six months or more. Vectiv relies on strategic location decisions, such as retailers, hotels and restaurants, to identify, evaluate, acquire and develop new sites with higher effectiveness, greater speed and lower cost. "Vectiv will transform the way companies make and manage their strategic real estate decisions by significantly improving business processes,” said Francesco Rockwood, president and CEO of Vectiv. "If a company is able to open new and better locations faster and at a lower cost, they can save up to 30 percent in time, money and resources.” In March, Vectiv received $8.1 million funding injection from Convergence Partners and B2B Internet incubator campsix. Last month, the company began work with Andersen Consulting to accelerate product development and devise its go-to-market strategy. Andersen will receive both cash and a minority equity stake in return for its consulting services. "For the first time, retailers will have the opportunity to evaluate sites against specific business criteria, make better informed decisions and more efficiently acquire properties that best support their growth strategies - all at Internet speed," said Frank Crocitto, partner, Andersen Consulting. Vectiv allows managers to use their company's proprietary site selection criteria to hone property selection by enabling immediate identification of properties that match each company's profile. The product is also touted to streamline the workflow process through centralized document management, communication and collaboration with internal and external project participants. "Vectiv doesn't seek to replace the human element but to use technology as a complement," said Ken Rosen, professor of business administration and chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, as well as a Vectiv advisor. "By systematizing both data and expertise, Vectiv allows decision makers to focus on the area where they create the most value - closing the deal.” | 
