American Industrial Reportedly Considering Sale of Firm or Assets

American Industrial Properties hired Salomon Smith Barney to review a possible sale of the company or its assets, said an industry newsletter that quoted people familiar with the situation.

Irving, Texas-based American Industrial joins a growing number of real estate investment trusts, or REITs, that are considering selling out or going private. Prudential Securities estimates at least 12 REITs are exploring alternatives.

REITs are mired in a 20-month-long slump that has pushed their stock prices to an average 16% discount to the underlying value of their real estate holdings, according to PaineWebber Inc. Investors have shunned REITs on concerns about slowing earnings, increasing debt loads and rising interest rates, among other things.

“Until our board decides to put out a press release I can’t comment,” said Charles Wolcott, American Industrial’s chief executive.

Salomon Smith Barney executives couldn’t be reached for comment. The hiring was reported by newsletter Realty Stock Review.

American Industrial owns 156 industrial properties with 8.3 million square feet of space in 12 states. Its total market capitalization--stock and debt--is about $600 million. The firm was recapitalized last year when shopping center developer Developers Diversified Realty Corp. sold its industrial properties to American Industrial in return for a 45% stake. Developers Diversified also got board seats; its chairman and chief executive, Scott Wolstein, became chairman of American Industrial.

American Industrial shares rose 25 cents to $11.38 Monday on the New York Stock Exchange.