Spieker’s Profit for 4th Quarter Beats Forecasts

Spieker Properties Inc., the largest commercial real estate investment trust on the West Coast, said Monday that its fourth-quarter earnings rose a greater-than-expected 20% as fast-growing high-technology companies bid up rents.

Menlo Park, Calif.-based Spieker’s funds from operations increased to $69.7 million, or 92 cents a share, from $58 million, or 79 cents, a year earlier. Revenue rose to $169.8 million, from $151.4 million.

Results exceeded analysts’ estimates of 88 cents a share, according to a survey by First Call/Thomson Financial.

With the economy about to complete its ninth year of expansion, office property owners are benefiting from companies hiring workers and expanding. How much longer the office market will continue to surge is in doubt as the pace of rent growth slows and vacancy rates start to rise, according to Torto Wheaton Research.

So far, Spieker said, it sees no slowdown in its West Coast markets, a center for the booming high-technology industries.

“It was originally suggested that the Information Age would make the traditional idea of location obsolete,” John Foster, the company’s co-chief executive officer, said in a statement. “Our experience, however, has been that location matters more today than ever.”

Spieker’s shares fell 13 cents to close at $38.88 on the New York Stock Exchange. The earnings results were released after the market closed. Last year, the shares rose 5.2%, contrasted with a loss of 11% for the Bloomberg REIT Index.

Spieker owns more than 42 million square feet of commercial space in California and the Pacific Northwest.

As prices for properties have risen in its markets, Spieker has turned its focus to selling properties and putting the proceeds into higher-yielding developments. It now has about $474 million worth of properties under development. In December, it agreed to sell $190 million of warehouse properties in Seattle.

Net income rose to $74 million, or $1.12 a share, from $31.8 million, or 50 cents. Per-share results reflect preferred dividend payments. Results for the latest quarter include a gain of $42.5 million from the sale of properties, up from $4.9 million a year earlier.