Post cuts 2003 dividends, and analysts expect more to follow

Post Properties, the nation’s eighth-largest apartment REIT, announced yesterday that it will cut its quarterly dividend for the first quarter of 2003 by 42%. According to a statement released by the Atlanta-based company, the firm plans to reduce its quarterly dividend to 45 cents from 78 cents.

Industry analysts view the announcement as an ominous sign that the REIT industry may be slipping. REIT dividend payments have allowed the sector to consistently outshine the Standard & Poor’s 500 stock index this year. Analysts have recently said that a weak economy and slowing demand for commercial real estate would inevitably chip away at REIT earnings.

The dominant apartment owner in both Dallas and Atlanta, the REIT has reportedly struggled to overcome cost overruns and construction delays with its non-core market developments over the past two years. To boost cash flow, Post has resorted to selling many apartment complexes in order to cover dividend payouts lately.

Late last week, speculation began swirling that Post would merge with or be sold to another REIT. Post has acknowledged that it is looking in to every option available to boost shareholder value.

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