Arden Realty Posts 17% Profit Drop

Office landlord Arden Realty Inc. said fourth-quarter profit fell 17% as tenants remained in the driver’s seat during lease negotiations.

The Los Angeles real estate investment trust reported net income of $13.6 million, or 21 cents a share, down from $16.3 million, or 26 cents, a year earlier. Revenue in the period ended Dec. 31 rose 3% to $105.1 million.

Arden’s funds from operations, a key measure of profitability for REITs, totaled $43 million, or 65 cents a share, compared with $44.6 million, or 69 cents, a year earlier.

Occupancy in the company’s 18.9-million-square-foot portfolio rose slightly to 90.4%, from 90.1% a year earlier and 89.9% at the end of the third quarter.

The company is “not going gangbusters, but I’m happy with their performance” compared with other REITs, said Los Angeles money manager Craig Silvers of Bricks & Mortar Capital, which holds shares in Arden. Rents are edging up, he said.

For the year, Arden’s profit fell 17% to $58.5 million, or 92 cents a share, from $70.2 million, or $1.09, in 2002. Revenue rose 4% to $414.3 million. Funds from operations were $174.5 million, or $2.66 a share, compared with $181.5 million, or $2.75, a year before.

Shares of Arden rose 45 cents to $31.10 on the New York Stock Exchange.