Although second-quarter earnings among real estate investment trusts (REITs) have held up better than expected amid an economic slump, many companies nonetheless are lowering guidance for the remainder of 2008, according to a report by Keefe, Bruyette & Woods.

The investment bank, which specializes in the financial services sector, reports that average growth in net operating income (NOI) on a same-store basis was 2.2% in the second quarter, down from 3.1% in the first quarter.

More than half of the 61 companies — 38 to be exact — that had reported second-quarter earnings by Aug. 4 exceeded analysts’ consensus expectations. Another seven REITs met the consensus expectations and 15 missed expectations for the second quarter. The totals were tallied after adjusting for non-recurring, or one-time, items.

“The slowing economy has clearly translated into companies’ more cautious outlook for the balance of the year,” according to analysts with Keefe, Bruyette & Woods.

Many REITs also have revised their earnings forecasts for all of 2008. Of these companies, 17 lowered earnings guidance for 2008 by an average of 4.6% per company, 12 companies raised prior 2008 guidance by an average of 2.4% per company, and 26 companies kept 2008 guidance unchanged.

Ten of the 38 companies that exceeded estimates raised their 2008 guidance. Most companies that exceeded expectations also moderated expectations for the remainder of the year.

Seven of nine office REITs beat consensus estimates and one, Kilroy Realty Corp., reported below consensus. Four office REITs raised 2008 guidance.

In the retail sector, which has been significantly affected by a major pullback in consumer spending, five shopping center REITs out of nine tracked by Keefe Bruyette have reported second-quarter earnings above consensus, while three reported below consensus.

One shopping center REIT, Acadia Realty Trust, raised 2008 guidance, two lowered guidance, and five left guidance unchanged. Out of four regional mall REITs, Glimcher Realty and Simon Property Group beat the consensus estimate for the second quarter, while General Growth Properties and Taubman Centers came in below the consensus expectations. One regional mall increased 2008 guidance, and two lowered their guidance.

Nine apartment REITs reported second-quarter earnings, with seven beating consensus estimates and two in line with consensus. Four apartment REITs raised 2008
guidance, three lowered 2008 guidance, and two kept guidance unchanged.

In the industrial sector, average same-store NOI growth in the second quarter was 0.7%, with First Industrial Realty and First Potomac Realty Trust reporting negative same-store NOI growth.

Five industrial REITs have reported second-quarter earnings, with three beating consensus estimates and two reporting in line with consensus. One industrial REIT raised 2008 guidance and one lowered guidance.