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REIT Valuation Stats for Office, Industrial & Aparment Sectors

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February 2004

First week summary:
    The Office sector prices rose from 4.56% to 6.57% price growth during the first week of February. The Industrial sector prices rose from 5.42% to 7.48% price growth. The Apartment sector rose from -0.29% to +1.10% -- the first week it was positive year-to-date.

Second week summary:
    The Office sector prices fell from 6.57% to 5.04% price growth during the second week of February. The Industrial sector prices fell from 7.48% to 6.32% price growth. The Apartment sector fell from 1.10% growth to a loss of 0.34%.

Slow facts in the internet age:
    AIV announced Thursday [2-12] that it expects 04 FFO of $2.85 to $3.20 per share. As of Saturday, the consensus estimate was still $3.31 on the WSJ data base. During the second week of February, both ARE and VNO were downgraded, yet their consensus analyst ratings have yet to change on the WSJ data base. It is my plan to check on the three companies updates to the multex data to see how slow it is to post this publicly available information [in the case of ARE and VNO] and how long it takes the analysts' to announce and multex to post the lower FFO estimates for AIV.

Third week summary:
    The Office sector prices fell from an increase of 5.04% to 4.62% during the third week of February. The Industrial sector prices fell from 6.32% to 5.07% price growth. The Apartment sector fell from a loss of 0.34% to a loss of 0.44%.
    Slow Facts in the Internet Age Update: The WSJ still has not reflected the rating changes of ARE and VNO, BUT the Yahoo database showed the changes on Tuesday, which was the first day I checked it. I came across a good site I want to pass along. It is Newratings.com. While WSJ/Yahoo do pass along news of analysts' upgrades and downgrades, this site gives a bit more information - like the "why's" of the downgrade.

Fourth week summary:
    The Office sector rose from an increase of 4.62% to 5.63% during the fourth week of February. The Industrial sector prices rose from 5.07% to 5.80% price growth. The Apartment sector rose from a loss of 0.44% to a gain of 0.51%.
    There were numerous and occasionally dramatic 04 FFO estimate revisions. After those revisions, the Office sector's average 04 FFO growth fell from 4.72% to 4.08% -- mainly due to large revisions in HIW and EOP. The Apartments sectors average 04 FFO growth fell from 2.81% to 0.51% -- primarily due to big decreases in AIV and PPS.
    Slow Facts in the Internet Age Update: HIW announced on 2-25 that it now expects FFO for 2004 to be between $2.40 and $2.50 per share. The consensus 2004 estimate was $2.61 on the 25th. By the 27th, the Yahoo data base had the median estimate at $2.47. The 'high' estimate had yet to fall, so more corrections to the old estimate are coming. I was surprised at the speed of change in thoses estimates by Yahoo. On the 29th, the WSJ stat for HIW's median estimate was still $2.61.
    The ratings of ARE and VNO were still unchanged at WSJ as of the 25th. VNO's rating at Yahoo = 2.0 vs WSJ = 1.8. ARE's rating at Yahoo = 2.5 vs WSJ = 1.9. The 04 FFO estimate for AIV is still unchanged at $3.31 at WSJ, but is updated at $2.99 at Yahoo. I have done enough testing and I am firing WSJ as my stat data base for my source of ratings and FFO/EPS data. NOTE: The WSJ finally had the right stats on the 27th.
    Using the Yahoo data for FFO's proved to be a small problem. Yahoo [unlike WSJ] lists estimates as being for 'this year' and 'next year' instead of being for a specific year. But some of the data labled as this year's appeared to me to be for 2003. Those companies for which I adjusted the Yahoo data include CEI, RA and VNO for offices and PPS and TCT for apartments. If Yahoo proves to be correct, then I have misstated the data for that list of REITs.


Office Update for 2-27-04


Industrial Update for 2-27-03


Apartment Update for 2-27-03

    NOTE 1: ASN's 02 FFO had to be estimated (and estimated to reflect an average decrease compared to 03) due to the fact that ASN prefers to use EPS - and I could not find the number in their press releases or annual statements.

    NOTE 2: TCT now has an analyst that is making FFO forecasts. So its 04 FFO estimate changed from $2.08 [my estimate] to $2.04 - but it would be incorrect to say that its estimate was lowered or that its outlook changed.


NOTE: Although the tables below are checked and double-checked for accuracy, and may at times be 100% accurate - do NOT count on that. Please confirm through your own research any numbers on which you are to make a buy, sell or hold decision. Most sites giving this kind of data would say that it's information is for entertainment purposes only. I will not presume that you are that masochistic. I try to be accurate, but I randomly fail. And even accurately replicated and freshly retrieved FFO numbers are often stale.
    The Price to Revenue INDEX figures, due to rounding errors, are not accurate to 3 digits. They are darn close to accurate. Javascript is expected to be accurate to 5 digits when the calculation is simply x times y. But the complexity of the formula - or a large number of calculations to determine a result - can decrease the number of digits of accuracy.

    Click here for the Shopping Center, Mall, and Health Care Update page.
    This months article updates are here.

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