|
Biz Links Previous March 04 March Stats Feb 04 Feb Stats Feb Stats Jan 04 Jan Stats Jan Stats Dec Stats Dec Stats Dec 03 Nov Stats Nov Stats Nov 03 Oct Stats Oct Stats Oct 03 Sept Stats Sept Stats Sept 03 August Stats August Stats August 03 August 03 July Stats July Stats July 03 June Stats June Stats June 03 Factoids Q3-02 Index Q2-02 Index Q1-02 Index Q4-01 Index Q3-01 Index Q2-01 Index Q1-01 Index REIT Links CPN Globe St. ICSC Real Estate Journal Reis ReBuz RSR NaREIT NREI Property ICSC REIT Week NAIOP ShopCntrsToday ShopCntrWrld |
First week summary: In the first week of March, the Retail sector prices rose from a 6.14% gain to a 10.04% gain. The Mall sector rose from a gain of 11.69% to 15.60% and the Health sector rose from a 9.43% increase to a 11.84% increase for the year. With the Price/FFO ratios of all these sectors near 13, and given that the historical average is 11, the values [or bargains] are long gone. I have a theory that REITs could go through a prolonged period where they probably will be priced above the historical Price/FFO avereage. And given that REITs had momentum last year and are continuing that momentum this year, I would not be surprised if that valuation reaches 14. I do not think that would be a good thing for returns long term. We would be borrowing capital gains from the future. But it is logical that those overly burned by stocks in the recent downturn would overly value low beta and decent yielding stocks in the present. I have a second theory, that once the US 10 year Treasury passes a yield of 4.5%, the REIT rally ends. Low 'safe' yields forces investors to take more risks. Some are using REITs as a bond substitute. Some are using REITs are a CD substitute. Once the substitute is no longer needed, those investors will go back home. One more note of pessimism, even if those investors do not go home, it is the flow of funds from those bond and DC investors [and the loss-averse 'overly burned' stock investors] that have propped up REITs. REITs need the cash flow from those escaping optional investments to prop up their valuations in an environment of poor fundamentals. And those REIT sectors that have improving fundamentals [like those on this page] have noticeably sub-average yields. Given that REITs total returns have primarily come from yields, this low yield REIT environment should be viewed with more concern than I currently perceive from the REIT message boards. Second week summary: In the second week of March, the Retail sector prices fell from a 10.04% gain to a 9.14% gain. The Mall sector fell from a gain of 15.60% to 15.02% and the Health sector fell from an 11.84% increase to a 10.16% increase for the year. Third week summary: In the third week of March, the Retail sector prices rose from a 9.14% gain to a 11.41% gain. The Mall sector rose from a gain of 15.02% to 17.13% and the Health sector rose from a 10.16% increase to a 11.52% increase for the year. FFO's and ratings are updated. The 05 FFO estimates have been added to the spreadsheets below. And the Mall and Health Care sections both have Price/Sales data updated with Q4 sales - and continue to have the Q3 tables included. Fourth week summary: In the fourth week of March, the Retail sector prices fell from a 11.41% gain to a 10.20% gain. The Mall sector fell from a gain of 17.13% to 16.90% and the Health sector rose from a 11.52% increase to a 11.79% increase for the year. End of Month Summary: For March, the Retail sector prices ended with a 12.54% year-to-date gain. The Mall sector ended with a year-to-date gain of 19.94% and the Health sector with a 12.33% gain for the year. Notes: 02 FFO's for AKR and RPT were taken from their year-end stats release, and were substantially different for numbers in the WSJ database. |