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The APARTMENT FINANCE TODAY Index surged after oil came off its mid-July highs and our session ended Aug. 13, 2008. The index weathered the volatility that beset the major markets, and the AFT stocks joined the tech-heavy Nasdaq in the positive column The index added 25.68 points, or 2.67 percent, and closed at 985.76. Advancing issues had the upper hand over declining issues at a 10-to-4 count.
Wall Street was volatile for the entire session, generally moving in the direction of the financial headline of the day. Falling oil prices dominated the news, but so did continuing weakness in the financial and credit markets. Just before our session ended, mortgage lender Fannie Mae posted a loss three times what analysts had been expecting. The federal bankers held steady on interest rates before our session ended but kept a wary eye on inflation. Volatility ruled, with a multiday rally followed by dramatic drops just as our trading session closed, with investors struggling to digest the news inside the latest earnings reports.
“This is a very difficult market in terms of processing news and trying to guess what is positive and what is negative,” said Jim Smigiel, head of the investment strategy group at SEI. “The way through this is to try to look at everything a little bit further down the road and just buckle up, because it’s going to be a pretty wild ride.”
Essex Property Trust dominated the gainers this session, with an increase of 6.80 points, or 5.96 percent, after the company reported more than an 11 percent increase in funds from operations (FFO). For the quarter ended June 30, 2008, Essex reported FFO of $40.3 million, or $1.46 per share, compared with FFO of $36.5 million, or $1.32 per share, in the comparable year-ago quarter. Essex re-affirmed its guidance for the full year, saying it will earn FFO in a range of $5.90 and $6.15 per share for 2008, and earnings per share between $1.85 and $2.10 per share. Essex closed at 120.80 and was the top dollar gainer.
Centerline Holding rose 0.40 points, or 15.69 percent, despite swinging to a loss for the second quarter ended June 20, 2008. Centerline lost $2.3 million, or 19 cents per share, in this year’s second quarter, compared to net income of $4.9 million, or 6 cents per share, earned in the same quarter in 2007. No news was released to explain Centerline’s increase in share price. Centerline closed at 2.95 and was the top percentage gainer.
Forest City tumbled 10.18 points, or 26.67 percent, after the company reported a widening loss for its fiscal first quarter ended April 30, 2008. Forest City said its net loss was $40.3 million, or 39 cents per share, compared to net loss of $17.2 million, or 17 cents per share, in the same quarter a year ago. Forest City cited project write-offs for Summit of Lehigh Valley in Allentown, Pa., and loss from investment in the New Jersey Nets basketball team. Forest City ended at 27.99 and was the top dollar and percentage loser.
|AFT Index Gainers and Losers|
|$ Gainer||Essex Property Trust, Inc.||6.80|
|$ Loser||Forest City Enterprises, Inc.||-10.18|
|% Gainer||Centerline Holding Co.||15.69%|
|% Loser||Forest City Enterprises, Inc.||-26.67%|