Friday, November 14, 2008

DCT Industrial Trust
After my last post on ProLogis, I pulled up information on DCT Industrial Trust (DCT), the formerly non-traded, public REIT, which is now listed. Today, it is trading at below $4.00 per share. I guess it caught the ProLogis flu. Investors paid $10 per share earlier in the decade and it went public at over $10 per share. Based on assets, it is about 80% smaller than ProLogis.

I quickly read through its 10-Q, filed last week. Its ratio of debt to total assets is 42%. DCT's board of directors announced last week it was cutting the dividend by 50% to $.08 per quarter, or $.32 per year. The board's projections for FFO in 2009 is $.50 to $.58, and the difference will help improve its balance sheet. The yield, after the rate cut, is now approximately 8%. Another development to watch is DHL's exit from the United States delivery market. DHL is DCT's largest tenant, although it leases less than 5% of DCT's space (exact figures were not provided in the 10-Q other than to say that no tenant leased more than 5%). DHL announced this week its plans to close its US operations.

It is a strange coincidence that DCT and ProLogis announced 50% dividend cuts within a week of each other.

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