Shopping Center REITs Poised to Exceed Expectations

An AP preview of second quarter earnings for shopping center REITs says many firms may end up coming in stronger than expected.

Shopping center REITs should "exceed consensus estimates," especially New Hyde Park, N.Y.-based Kimco Realty Corp. and Beachwood, Ohio-based Developers Diversified Realty Corp., Morgan Stanley analyst Matthew Ostrower said in a note to clients.

However, Wachovia Securities analyst Jeffrey L. Donnelly said Developers Diversified's second-quarter results "will likely be somewhat clouded" by several one-time charges from development gains, the REIT's joint venture with DCT Industrial Trust Inc. and the redemption of $150 million in preferred shares.

However, Donnelly expects "continued strength in operating results as retail fundamentals remain sound."

So far, analysts appear to be shrugging-off worries that penny-pinching consumers could weigh on the sector.

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