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PS Business Parks (PSB) Sells Corporate Pointe Business Park

Zacks

PS Business Parks, Inc. PSB recently announced the sale of Corporate Pointe Business Park, situated in Orange County, California. The deal generated $41.7 million in net proceeds after considering transaction costs.

The park, which was 97.6% leased on the day of the transaction, had five multi-tenant office buildings on its premises.

Earlier, the Glendale, CA-based real estate investment trust announced that it has some properties in Orange County that it wants to sell off. This park spanning 160,000 square feet was included in the 705,000 square feet of rentable area that was being held for sale.

PS Business Parks owns, acquires, develops and operates commercial real estate properties, especially multi-tenant flex, office and industrial. As per the company, “flex” space is defined as properties that are configured with a combination of office and warehouse space.

The company’s healthy fundamentals are anticipated to stoke growth in the long run. In addition, PS Business Parks’ financial flexibility keeps us optimistic.

Nonetheless, the unfavorable leasing environment in certain markets adversely affects the company’s leasing performance. Moreover, stiff competition from other office and industrial-asset owners in the market hampers its ability to attract and retain tenants at higher rents. Rate hike adds to its woes.

Recently, PS Business Parks reported its fourth-quarter 2017 results that revealed growth in core funds from operations per share from the prior-year quarter. The rise reflects higher net operating income, reduced general and administrative expenses, and savings from lower preferred distributions.

However, shares of PS Business Parks have underperformed its industry in the past three months. During this time frame, the stock has edged down 11.7% compared with industry’s decline of 10%.

PS Business Parks currently carries a Zacks Rank #3 (Hold).

Stocks Worth a Look

Investors interested in the real estate industry can also consider top-ranked stocks like HFF, Inc. HF, The RMR Group Inc. RMR and CBRE Group, Inc. CBG. While HFF and RMR sport a Zacks Rank of 1 (Strong Buy), CBRE Group carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

HFF’s earnings per share estimates for 2018 have been revised 22.6% upward to $2.88 over the past month. The stock has gained 5.2% during the past three months.

RMR Group’s earnings per share estimates for the current year have inched up 84.2% to $6.08 in a month’s time. Its shares have gained 13.8% over the past three months.

CBRE Group’s Zacks Consensus Estimate for 2018 earnings per share has been revised 7% upward to $3.04 over the past month. The company’s share price has risen 7.5% in three months’ time.

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