Pacific Office Properties Trust Inc., an office real estate investment trust with most of its portfolio located in Honolulu, said a key measure of cash flow was $1.06 million, or 6 cents per share/common unit, in the quarter ended Sept. 30.

The report marked Pacific Office's second complete fiscal quarter since being formed by Honolulu-based Shidler Group in March.

Despite the positive cash flow, also known as "funds from operations," the company reported a net loss of $1.19 million, or 39 cents a share. There were no comparisons to a year earlier because of Pacific Office's recent formation.

The company said it was happy with leasing efforts in the third quarter, given the adverse conditions and challenges posed by the economy and recent financial turmoil. It reported expanding its property portfolio to 40 office buildings totaling 4.4 million of leasable square feet during the quarter when properties that are co-owned with institutional investors are included.

"We are optimistic about our future prospects given that 80 percent of our rental revenue for the three months ended Sept. 30, 2008, was derived from Honolulu and Southern California submarkets, which are some of the strongest office markets in the United States," said Dallas Lucas, president and chief executive officer of the Los Angeles-based company, in a press announcement.

The company said a $40 million revolving credit line completed in August provides it with financial resources and flexibility to look at more acquisitions.

During the quarter it acquired a managing ownership interest in a $195 million joint venture that consists of 15 office and other buildings in Southern California.

About 60 percent of the company's investments are in properties in Honolulu. Pacific Office cited a study published by Merrill Lynch Research that ranks Honolulu as the second-healthiest office market in the country.

The company is externally managed by Pacific Office Management Inc., an affiliate of the Shidler Group. Pacific Office's seven Honolulu properties include the Davies Pacific Center, the Pan Am Building and Waterfront Plaza.

Pacific Office released its results after the close of regular trading. Prior to the market close, its shares fell 20 cents to $4.70 each.