Declining home sales put American Land Lease in red

A nearly 50 percent drop in new home sales has affected the bottom line of American Land Lease Inc.

The retirement community real estate investment trust reported a net loss of $1.5 million, or 19 cents per share, compared to a $1.3 million, or 16 cents per share, gain the company earned a year before. Revenue was $14 million, down more than 21 percent.

Home sale revenue was down to $3.4 million, compared to a $7.7 million take in the first quarter of 2007. Rental revenue was virtually flat at $10.16 million with the previous quarter.

Content Continues Below

"The severe and continuing decline in the broader home sales markets has continued to impact our ability to add new leases to the portfolio at the same rate we have enjoyed in prior years," said Bob Blatz, president, in a release. "The reduction in the rate at which new leases are added to the portfolio has reduced current land values."

However, the senior REIT business is a stable one, Blatz said, and once confidence returns to the overall housing market, absorption rates "will be restored" from current lows.

New home closings by the Clearwater company (NYSE: ANL) have dropped 49 percent to 28 in the first quarter. New home contracts are down 76 percent to 23, and new home contract backlog fell 79 percent to 12.

With the housing market slowdown, American Land Lease has lowered sales overhead and marketing costs. Selling and marketing expenses in the quarter were $2 million, 13 percent lower than the $2.3 million spent in the first quarter of 2007.

American Land Lease has been looking to repurchase up to 2 million shares of its outstanding common stock. More than 33,000 shares were repurchased in the first quarter at an average price of $19.95 per share, valued at more than $658,000.

The company's stock opened at $18.55 on May 9 and has had a 52-week high of $26.14, and a low of $17.99, according to Google Finance.

American Land Lease holds interest in 30 manufactured home communities in Florida and Arizona that includes more than 8,000 operational home sites, 1,345 developed expansion sites, nearly 1,200 undeveloped expansion sites and just under 130 recreational vehicle sites.