PS Business Parks, Inc. Reports Results for the Third Quarter Ended September 30, 2008

Business Wire, Oct 30, 2008

GLENDALE, Calif. -- PS Business Parks, Inc. (NYSE:PSB) reported operating results for the third quarter ended September 30, 2008.

Net income allocable to common shareholders for the three months ended September 30, 2008 was $5.4 million or $0.26 per diluted share on revenues of $71.6 million compared to $4.3 million or $0.20 per diluted share on revenues of $68.7 million for the same period in 2007. Net income allocable to common shareholders for the nine months ended September 30, 2008 was $13.8 million or $0.67 per diluted share on revenues of $212.6 million compared to $14.0 million or $0.64 per diluted share on revenues of $201.5 million for the same period in 2007.

Revenues for the three months ended September 30, 2008 increased $2.9 million over the same period of 2007 primarily as a result of an increase of $2.3 million from the Company's Same Park portfolio. Net income allocable to common shareholders for the three months ended September 30, 2008 increased $1.1 million over the same period of 2007 primarily as a result of an increase in net operating income offset by a decrease in interest and other income.

Revenues for the nine months ended September 30, 2008 increased $11.1 million over the same period of 2007 as a result of an increase of $6.5 million from the Company's Same Park portfolio combined with an increase of $4.6 million from acquired properties. Net income allocable to common shareholders for the nine months ended September 30, 2008 decreased $150,000 over the same period of 2007 primarily as a result of a decrease in interest and other income and an increase in depreciation and amortization partially offset by an increase in net operating income.

Supplemental Measures

Funds from operations ("FFO") allocable to common shareholders and unit holders for the three months ended September 30, 2008 and 2007 were $32.0 million, or $1.14 per diluted share, and $31.0 million, or $1.07 per diluted share, respectively. FFO allocable to common shareholders and unit holders for the nine months ended September 30, 2008 was $94.0 million, or $3.36 per diluted share, compared to $90.6 million, or $3.13 per diluted share, for the same period in 2007. The increase in FFO for the three and nine months ended September 30, 2008 over the same period of 2007 was primarily due to the increase in net operating income partially offset by the decrease in interest and other income as discussed above.

Property Operations

In order to evaluate the performance of the Company's overall portfolio over two comparable periods, management analyzes the operating performance of a consistent group of properties owned and operated throughout both periods (herein referred to as "Same Park"). Operating properties that the Company acquired subsequent to January 1, 2007 are referred to as "Non-Same Park." For the three and nine months ended September 30, 2008 and 2007, the Same Park portfolio constitutes 18.7 million rentable square feet, which includes all assets the Company owned and operated from January 1, 2007 through September 30, 2008 and represents approximately 95.5% of the total square footage of the Company's portfolio as of September 30, 2008.

The Company's property operations account for substantially all of the net operating income earned by the Company. The following table presents the operating results of the Company's properties for the three and nine months ended September 30, 2008 and 2007 in addition to other income and expense items affecting income before minority interests (unaudited, in thousands, except per square foot amounts):

[TABLE OMITTED]
[TABLE OMITTED]

Financial Condition

The following are key financial ratios with respect to the Company's leverage at and for the three months ended September 30, 2008:

[TABLE OMITTED]
[TABLE OMITTED]

Distributions Declared

The Board of Directors declared a quarterly dividend of $0.44 per common share on October 30, 2008. Distributions were also declared on the various series of depositary shares, each representing 1/1,000 of a share of preferred stock listed below. Distributions are payable December 31, 2008 to shareholders of record on December 15, 2008.

[TABLE OMITTED]

Company Information

PS Business Parks, Inc., a member of the S&P SmallCap 600, is a self-advised and self-managed equity real estate investment trust ("REIT") that acquires, develops, owns and operates commercial properties, primarily flex, multi-tenant office and industrial space. The Company defines "flex" space as buildings that are configured with a combination of office and warehouse space and can be designed to fit a number of uses (including office, assembly, showroom, laboratory, light manufacturing and warehouse space). As of September 30, 2008, PSB wholly owned approximately 19.6 million rentable square feet with 3,850 customers located in eight states, concentrated in California (5.8 million sq. ft.), Florida (3.6 million sq. ft.), Virginia (3.0 million sq. ft.), Texas (2.9 million sq. ft.), Maryland (1.8 million sq. ft.), Oregon (1.3 million sq. ft.), Arizona (0.7 million sq. ft.) and Washington (0.5 million sq. ft.).