- The Washington Times - Tuesday, May 9, 2000

CarrAmerica Realty Corp. plans to sell $200 million worth of buildings in South Florida and Phoenix after it failed to attain the leading market share it wanted in those markets, said officials of the District of Columbia-based real estate investment trust.
"We didn't reach our goal to have a No. 1 or No. 2 market share," Thomas Carr, chairman and chief executive, said in a conference call with investors and analysts yesterday.
The sales of the 11 properties are part of CarrAmerica's strategy to use sales to fund high-yielding developments, buy back shares and repay debt. In 1998 and 1999, the company sold about $680 million worth of properties.
"Selling mature assets is right up with their strategy," said Keith Pauley, portfolio manager with LaSalle Investment Management, which holds stock in CarrAmerica.
The Florida properties include the Presidential Circle building in Hollywood, and Peninsula Plaza and the two-building Peninsula Executive in Boca Raton. CarrAmerica also will sell six properties that include seven buildings in Phoenix.
The sales would leave the company's holdings concentrated chiefly in the D.C. region and San Francisco, Atlanta and Dallas. It picked up most of them through a national expansion during the 1990s.
The company likes leading market positions because that lets it control leasing and pricing and save costs, said David Fick, an analyst with Legg Mason Wood Walker.
The new sales are expected to contribute toward $300 million in sales this year, CarrAmerica officials said.
The company can use it. It has $200 million worth of development under construction now, and $170 million planned this year, said Louis Taylor, an analyst with Prudential Securities.
"They've done a good job funding it, shrinking down development" from $700 million under way a year ago, he said.
Company officials agreed.
"You're going to see an aggressive focus on development with a more conservative balance sheet," Mr. Carr said.
In all, the company owns or has a stake in 277 properties, up from 14 at the time of its initial public offering 1993.
Before its national expansion, the company focused on Washington. It still owns some of the District's most prestigious properties, including 1717, 1730, 1747 and 1775 Pennsylvania Ave., which are four of the eight office buildings located on the block immediately west of the White House.
This article is based in part on wire service reports.

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