Brandywine Realty Trust, one of the nation's largest real estate companies, has cut its quarterly dividend 32 percent to match its slumping prospects for profit next year.
The new dividend, declared yesterday and payable Jan. 20 to shareholders of record on Jan. 6, is 30 cents a share, down 14 cents.
Another local real estate investment trust, Liberty Property Trust, in Malvern, cut its quarterly dividend 24 percent, to 47.5 cent a share from 62.5 cents a share last month. Real estate investment trusts are required by law to pay 95 percent of their annual net income to shareholders.
Brandywine's shares have tumbled 63 percent since September, substantially more than the 42 percent decline in Bloomberg's 121-member index of real estate investment trusts over the same period.
The Radnor company's shares closed yesterday at $6.36, up 63 cents, or 10.99 percent, on the New York Stock Exchange.
Commercial real estate companies will face tough times in 2009, Fitch Ratings Inc. said yesterday. Fitch cited the recession and tight capital markets, which are making it hard for real estate investment trusts to reduce debt and sell poorly performing properties to boost the overall performance of portfolios.
Fitch predicted a 2009 decline in the U.S. gross domestic product of greater than 1 percent and an unemployment rate above 8 percent compared with 6.7 percent in November. The GDP, the broadest gauge of the economy, measures the value of all goods and services produced in the United States.
That outlook is particularly tough for real estate investment trusts that specialize in office space, such as Brandywine, because GDP growth and employment determine how quickly space is absorbed, Fitch said. Brandywine said last month that vacancy rates were climbing in most of its markets.