PS Business Parks Inc. reported an 11 percent increase in third quarter net income, but shares fell Tuesday because the company’s funds from operations were slightly below expectations.

After Monday’s markets closed the Glendale real estate investment trust reported net income of $24.2 million (39 cents per share), compared with $21.8 million (26 cents) a year ago. Revenue was down 5.5 percent to $67.7 million.

PSB owns multi-tenant office, industrial space and undeveloped land in California and seven other states.

Funds from operations, an industry metric that adjusts for depreciation and amortization expenses, fell 1.5 percent to $31.5 million ($1.04). Analysts surveyed by Thomson Reuters expected the company, to report FFO of $1.05 per share on revenue of $67.5 million.

The REIT said the FFO decrease was primarily due to a drop in net operating income and the issuance of 3.8 million shares of common stock in August. The increase in net income came primarily from a net gain in the repurchase of preferred equity, a gain on the sale of land in Oregon and a decrease in depreciation expenses.

Shares were down $1.58, or 3 percent, to $47.26 in midday trading on the New York Stock Exchange.