SAN FRANCISCO, CA - Apartment developer BRE Properties Inc. said Monday it has cut its number of workers by 4 percent and slowed down its development program amid difficult conditions in the real estate market. The real estate investment trust told 33 employees last week that their positions had been eliminated, the company said in a news release Monday.
BRE Properties said the cuts involved management and staff-level associates, mainly in the development area. The cuts lowered the overall level of employees by 4 percent, and development personnel by 36 percent. The company expects to have cash severance charges totaling about $1.5 million, 3 cents per share, in the first quarter of 2009.
The REIT also said it will stop predevelopment activities on three sites under option agreements or letters of intent, resulting in an abandonment charge of about $5.1 million, or 10 cents per share.
"Management's decision is in response to current and expected economic conditions, which have fostered uncertainty regarding unemployment levels and credit availability, and have weakened real estate fundamentals," the company said in the news release.
BRE Properties said five apartment communities under construction are not affected by the moves, and it expects to finish the construction and leasing of these communities. The communities are expected to cost $100 million to complete, and no additional construction starts are expected this year, the company said.
The company said it currently has approximately $500 million available under its unsecured credit facility. The company said it believes this liquidity level and its expected operating cash flow will allow it to fund construction costs and meet debt maturities for 2009 and 2010. BRE Properties develops, acquires and manages apartment communities in Western U.S. markets.
Source: PRnewswire.com