Luxury-apartment owner Archstone-Smith ( ASN) reported improved operating results for its third quarter, though funds from operations were helped by a string of one-time items. The Denver-based real estate investment trust said funds from operations -- a non-GAAP measure used to measure REITs' performance -- totaled 65 cents a share in the third quarter, up from 56 cents a share a year earlier. Analysts, on average, expected FFO of 50 cents a share, according to Thomson First Call. Archstone shares rose 97 cents, or 2.5%, to $39.32 in midday trading Monday. Quarterly results were boosted by a healthy 4.1% increase in same-store revenue at Archstone's rental communities. Same-store revenue rose 4.6% in Southern California -- the company's largest market -- and in Washington, D.C. Same-store revenue surged 9.1% in southeast Florida and 6.5% in the New York City metropolitan area. "It was a solid quarter, in that they met our estimates. It was partially that they had lower-than-anticipated expenses ... even the revenue growth was 4.1%, which is a very healthy performance in today's environment," says David Rodgers, an analyst with Keybanc Capital Markets, who rates Archstone a hold on the basis of its high valuation relative to its apartment peers. Archstone's funds from operations, or FFO, benefited from gains of $27.8 million, or 12 cents a share, from sales of communities by Ameriton, the company's subsidiary that specializes in turning around apartment properties for quick sales. Results were also boosted by insurance recoveries related to mold litigation and other issues, which contributed $16.7 million, or 7 cents a share, to FFO. "If you stripped out Ameriton's gains and stripped out unusual one-time items, they came in at 46 cents per share. That was our estimate," Rodgers says. Including all gross gains from asset sales, Archstone's third-quarter FFO rose to 97 cents a share from 79 cents last year. Archstone raised its FFO guidance for the year to $2.10 to $2.13 a share. Analysts, on average, forecast FFO of $1.97 a share. However, the higher guidance is mostly related to one-time items and not to operational performance, Rodgers says. On Tuesday, fellow luxury apartment REIT AvalonBay ( AVB) reports earnings after the market closes.