Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So What: For First Industrial, which owns, manages, and develops industrial properties, the recession was particularly challenging, as the industrial and manufacturing sectors took it on the chin. Excluding a non-cash impairment charge, First Industrial's funds from operations -- a cash flow measure used by REITs -- were $0.43 per share during the quarter, versus $0.57 last year. Potentially even more importantly, the company reiterated its announcement from earlier in the week that it had restructured one of its lending agreements, which will give the company more financial breathing room.
Now What: As the excitement over stocks like Chimera Investment (NYSE: CIM ) and American Capital Agency (Nasdaq: AGNC ) suggests, investors often flock to REITs for their healthy dividends, even if those payouts don't reach the nosebleed levels of Chimera and American Capital. As results deteriorated, First Industrial cut off its dividend payments; as a REIT, it will be required to start paying them again if its bottom line continues to improve. It appears the company is making necessary moves to stay in the game, but it will need a continued economic-recovery tailwind to keep up its comeback.
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