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The growth in apartments for active seniors who don't need outside assistance is driven partly by the increasing life span of Americans. More than 16% of U.S. residents are expected to be at least 65 years old in 2020, according to the Census Bureau, up from about 13% in 2002. Only 4.1% of Americans were at least 65 in 1990. The push toward upscale senior rental housing also is a response to baby boomers, who developers say are looking for housing choices for their aging parents that don't feel as institutional or isolated as many older facilities. Architects on new senior-apartment projects make a point, for instance, to shun the harsh, fluorescent lights associated with hospitals and nursing homes. Instead, designs often include lots of windows and skylights to catch natural light. The apartments usually are built garden-style. They are usually roomier than conventional apartments, on the theory that seniors accumulate a lot more stuff and need more space to put it. The kitchens tend to have stainless steel appliances, cherry wood cabinets, granite countertops, and more tile rather than vinyl. The place looks more like a house. That's one reason why these apartments tend to cost more than conventional rental units. No one tracks overall rents for senior apartments. But the average monthly rent for a top-of-the-line, one-bedroom, market-rate apartment in the U.S. is $897 a month, according to Reis. A two-bedroom unit averages $1,098. Some housing experts aren't so sure seniors will be eager to move into apartments, especially since interest rates are so low. Developers' eagerness to cater to older Americans also is fueling worries that too many companies will rush to build senior apartments simply because they seem hot.
"We'll continue to see strong demand from tenants moving into Southern California, especially from young singles wanting efficiency units and larger Latino immigrant families needing three-bedroom apartments," said Raphael Bostic, director of the forecast. "The big problem is that there are just too few units available for people to move into right now." The study found that almost every apartment on the market was rented. Average occupancy has topped 96% for the last two years and should reach 97% by 2005, the report said. Only once during the last four years did the occupancy rate for any type of unit fall below 95% - three-bedroom units slipped below that mark at the end of the recession in 2001. Rising rents have made Southern California the most sought-after region in the nation for investors, said Hessam Nadji of brokerage Marcus & Millichap. Fierce competition pushed the median per-unit price up 17% last year, to $95,000 in Los Angeles County.
Peter Korpacz, director of PricewaterhouseCoopers' global strategic real-estate research practice, characterized the results as the highest level of concern survey respondents have shown about potential value declines since the economic downturn began in 2001. The respondents, who include real-estate developers, real-estate company executives, institutional investors, bankers and real-estate insurance representatives, expressed concerns that prices for commercial buildings have risen too high too fast. The investors were particularly concerned about buyers priced out of purchasing well-leased properties bidding up prices for properties that are only partially leased. They believe buyers of those not-so well-leased properties are making unrealistic assumptions about future job growth and potential to find and keep tenants and jack up rents. The problem is that many had predicted that job growth would have been stronger by now. While respondents still fear a decline in values, they plan to continue investing in commercial properties. In particular, investors said they liked warehouses, especially in California's Inland Empire, Chicago and northern New Jersey, where leasing demand has remained robust. The fact that inventory levels have reached critically low points, prompting a rise in manufacturing activity over the past several months, has made them optimistic. Investors said they liked malls, centers housing big-box retailers such as Wal-Mart and Target, and strip shopping centers, particularly those anchored by leading grocery stores. That sentiment is due, in part, to steady consumer spending. They also believed hotels, which have been hurt by the recession, the Sept. 11, 2001 terror attacks and SARS, are rebounding. Their opinion on apartments was that conditions are still soft but won't get worse.
The trend is breathing new life into the lowly suburban shopping center, once dismissed as the downscale cousin of the shiny megamall of the go-go 1980s and '90s. But today's shopping centers have a new look, and a new name: either as "lifestyle" centers - a cluster of upscale stores trimmed by landscaping for added charm - or more Spartan "power" centers, where the department stores team up with one or two major "big box" retailers such as those of Home Depot or OfficeMax. These free-standing department stores differ from their mall counterparts in important ways. Resembling big grocery stores, they typically occupy only one floor, feature shopping carts and centralized checkouts near the entrance, carry less merchandise and offer close-in parking. The growing number of stand-alone stores partly reflects how desperate retailers are for growth. Only 19 malls are scheduled to be built from 2003 through 2005, according to the International Council of Shopping Centers. During the industry's peak, 47 large malls opened between 1990 and 1992. Conversely, the lease space in lifestyle centers is expected to double over the next few years, according to the shopping council. There now are more than 100 lifestyle centers in the U.S., with gross leasable space of about 33 million square feet. There are a number of advantages to retailers in the free-standing stores: Rents are generally cheaper and operating costs can be significantly lower because the retailers don't have to pay shared utility costs for common areas. And since shoppers are more likely to go to a free-standing store for a specific item, sales per square foot are typically higher than in mall-based stores. The stand-alone stores appeal to busy people who say they don't have time to spend browsing through a mall's myriad stores. "People want to go in and out, not spend a lot of time at the mall," says Walter Loeb, an independent retail analyst in New York. "Long term, you're going to see more and more free-standing stores open." Penney's opened three off-mall stores last fall. Zales last year tried its hand in Texas neighborhoods outside of malls, opening free-standing stores in suburban Austin, Dallas and San Antonio. May Department Stores opened six free-standing stores in suburban, high-growth areas between 2001 and 2003 and plans to open three more off-mall stores this year. Sears opened its first stand-alone Sears Grand department store in October and plans to open three more such stores this year.
Industrial Outlook Hugh F. Kelly, CIRE 2-06 Industrial construction volume has fallen since 1999. 2004 generally looks like a recovery year for industrial real estate. Although manufacturing jobs are still in the doldrums, order backlogs are increasing, and manufacturers have raised prices. As of last September, new export orders were up for the 21st consecutive month, and imports increased for the 11th month in a row. Since both imports and exports need to move through the nation's warehousing and distribution systems, fundamental demand for this segment should grow, and absorption levels should increase in the next few quarters.
In fact, the average price paid for downtown office properties in the U.S. dropped slightly last year to $196 a square foot from $200 a square foot in 2002, according to Real Capital. The average price paid for suburban office properties dropped to $134 a square foot last year from $137 in 2002. Nationwide, the average capitalization rate - the initial return on investment - for downtown office properties dropped to 8.3% at the end of 2003 from 9% at the end of 2002, according to PNC Real Estate. The average cap rate for suburban office properties dropped to 9% at the end of last year from 9.7% in 2002. The report indicates that bubble trouble may be brewing in the Washington, D.C., market. Office properties in Washington - even those facing tough leasing prospects - are trading at high prices, which are spurring speculative development, according to the report. Survey respondents suggest that "you can sell anything" in that market, the report says. About 2.6 million square feet of speculative office space was under construction and about 32% of that space was leased, according to real-estate brokerage firm Grubb & Ellis. "That's a low pre-lease rate that we only see in D.C.," says Nicholas Buss, a vice president at PNC Real Estate. Office Outlook Hugh F. Kelly, CIRE 2-06 Office vacancy soared from about 10% in early 2001 to above 17% in mid-2003, indicating a vacant space volume that increased from 400 million square feet to 680 million sf in just 30 months. Although the nation's large markets have lost approximately 278,000 office jobs since 2001, employment loss accounts for only 62 million sf of the vacancy. About 160 million sf of inventory was added, which leaves approximately 58 million sf unaccounted - the so-called shadow space that companies warehoused for future growth that never occurred. If more than 2 million office jobs are added in the next five years, with perhaps 300,000 of those jobs coming online this year, 460 million sf of demand will be generated by 2008. Most of this year's growth can be accommodated by existing space, so net absorption will be modest. But there still will be a need for at least 175 million sf to 200 million sf of new office space by the end of the five-year period; therefore, development should accelerate by 2006. The nation's largest cities [New York, Los Angeles, and Chicago] each should add more than 100,000 office jobs by 2008. Demand will grow smartly in Sunbelt cities such as Atlanta and Dallas. Cushman & Wakefield Office Forecast Ryan Chittum, WSJ 3-24 To find the best-performing office markets in the country for the next couple of years, follow the sunshine. Orlando and Tampa will lead the way, with Phoenix and Orange County not far behind, according to a new report. These markets will perform best according to a barometer of fundamentals in 29 central business districts put together by Cushman & Wakefield. The report takes into account factors such as job growth, new construction, rent movements and changes in the amount of office space occupied to help investors find opportunities and to help companies get advance warning when looking for space.
Take the parking lot, clearly the afterthought of the whole endeavor. On a recent trip to Tysons Corner Center with Underhill, the two of us jumped out of the car and immediately went separate ways. I headed for the door. He walked behind the car and looked at the lot, pointing out that it was dark and ugly and had totally inadequate, unmemorable signage on the columns to tell people where they'd parked. Developers build lots carelessly because care and attention are not their job. My experience with Mills is that they do pay attention to this. The disconnect between real estate-minded developers and shopping-minded customers affects many facets of the mall-going experience. How about better legends when entering a mall? Underhill argues it takes typical mall shoppers 22 seconds to locate themselves on the map, and many give up. Underhill spends a lot of time dissecting one of the most troubling issues for shoppers, which is the different way that men and women approach a mall. Men go to the mall just to go, with the family, to see people, to be out. Women go to the mall to shop. Underhill's firm, Envirosell, has studied thousands of shoppers over many years and has found that on a city street, men walk faster than women. In the mall, it's the reverse: "Men tend to wander malls like semi-lost children, whereas women are the ones who inhabit the place with a true shopper's sense of purpose." Malls could help the situation, but again, they don't. Underhill suggests better seating for men and more stores and attractions that typically appeal to them. "This has become one of the most poignant issues in all malldom, the matter of what to do with men while shopping takes place," Underhill says. Even when shopping centers are confronted with obvious opportunities to influence shoppers, he argues, most malls miss the boat. Mall bathrooms, for example, are cold and sterile and situated down long corridors. They are natural spaces for some marketing materials from bath- and body-oriented stores in the centers, but the chances for cross-promotion and visual merchandising seem to be lost on real estate managers. Another good example is movie theaters: Many major malls have them, but make no effort to market their films -- or the merchandise related to them -- in the malls themselves. To be fair, this is a Mills failing. Underhill's basic complaint is that mall management is too passive, and he lays the blame not on their willful neglect but on their "lack of mercantile DNA." Retailers are always reinventing and looking for the next new trend, but malls have stayed the same for years. Maybe a new store concept opens, maybe a new movie complex is added, but overall, malls have shown little retail-style imagination for years. Real estate, he reminds, is at its core a risk-averse business. The recent literature tells me that malls are innovating. Car dealers, motor cycle dealers, Targets and Wal-Mart's are going into malls. I do not find this a totally fair criticism. But it is probably the case that malls innovate only under duress - only when a space is hard to rent or has been vacant too long. If mall managers were retailers, Underhill says, they would understand that food retailing -- and many other kinds of retailing -- could be appropriate in the mall (overseas, supermarkets are common in malls). Grocery check outs are traditionally at the front of the store. To be placed in a mall, grocery stores would have to (1) not be open to a separate exit/entrance or (2) have check-outs at its entrance and its [rear] mall openings. That is tuff to image. But I am open to imagining it. They would understand that their prime shoppers, women, are busier than ever and could use more convenience in terms of layout and store variety. Part of super-market design is to make shoppers walk from one end of the store for produce to the other end for milk and eggs - to expose the shoppers to other options. This is not convenience, but it IS marketing. And they would have learned from the success of their free-standing kiosks that it would be a good idea to replace a few of their high-paying national chains with the kind of local, independent retail talent that would add excitement and interest. Replace a high paying tenant with a lower paying tenant? Well, let's not make one bad idea spoil the whole bunch. The malls' failings are most likely not fixable, at least not without changing who owns and runs them. But it's good to understand why things don't work. And Underhill's observations help explain why "the mall" is an object of derision in our society, even as we flock to it. "It's a lot like television in that way," Underhill writes. "We disdain it, and yet we can't stop watching."
Renter demand for multifamily product will improve as consumer confidence grows and the affordability of single-family housing declines. Yet despite increasing demand, there remains an oversupply of new units in the development pipeline. Marcus & Millichap also projects that concessions will begin to abate this year, particularly among Class-B and -C properties. Asking rents are expected to rise 1.5% in the same time period. Strong demographic and immigration trends will fuel tenant demand.
Additionally, if companies are planning to sell apartment property in the next three years, the sooner they do so, the better, Sivitanides said. On a positive note, values will most likely start to rise after 2006 due to rising occupancies and rents, he added. To that end, investors that hold onto properties for more than five years do not face as much risk. Sivitanides also stressed that the report reflected a national average. "Apartment conditions vary considerably by market," he said. "Depending where investors have their holdings, the outlook will be different."
So why all the clashes? Supercenters were the catalyst, says Al Norman, founder of Sprawl-Busters. In the 1970s and 1980s, discount stores in Wal-Mart's initial sweep through the South and Midwest were modest by today's standards - "40,000-, 50,000-square-foot little things," he says. Not only are supercenters far grander - 200,000 square feet or about six football fields - but they often leave vacant older Wal-Marts behind. Norman counts 371 "dead" stores, up 39% since 1999. "Communities are irritated that they're building stores right down the street from older stores," Norman says. "And they're irritated that they're getting the skeletal remains of the old stores." Besides more traffic and pollution - a supercenter adds 3,300 daily trips - Wal-Mart kills supermarkets that anchor neighborhood strip malls, hastening urban blight, critics say. In 1997-2002, Wal-Mart blanketed Oklahoma City with seven supercenters and seven of its "neighborhood markets" that mimic stand-alone supermarkets. It added a Sam's Club warehouse store to three already in the metro area. Result: 30 competing supermarkets closed, according to Retail Forward. In Dallas over the same period, Wal-Mart added 34 stores. Winn-Dixie abandoned all of its 15 stores. In California, a volatile mix of circumstances makes the Wal-Mart wars unique. Gridlock on streets and highways fuels resistance to big-box developments on the suburban fringe that aggravate traffic and sprawl. Politically potent unions see jobs threatened by supercenters selling groceries and offering consumers low-priced, one-stop shopping for most of their needs.
Industry experts say medium-size boxes - with floorplates between 35,000 and 90,000 square feet - present the greatest challenge for re-tenanting and reconfiguration, because most users require more or less space and the shape makes them difficult to chop up into smaller boxes or shops. This size category is most often abandoned by retailers going bankrupt (i.e. Montgomery Ward, Service Merchandise and Kmart), shuttering failed merchandising concepts (i.e. Sears Home and Kids 'R' Us), or moving to larger spaces to accommodate the new superstore concept and get a competitive edge, (i.e. Wal-Mart, Target, Kohl's, Home Depot and Lowe's). Consequently, there are more boxes in this size group sitting around empty than any other, and the supply continues to grow. The number is likely to be exacerbated by category killers like Petco and office supply stores - which are downsizing their prototypical store sizes as they tighten up. But some retailers don't require prime locations with high visibility or extensive renovation to fit into an existing space. Some companies, like Jo-Ann Stores, Burlington Coat Factory, Hobby Lobby and Big Lots have built their development strategy on dark spaces. It saves a lot on costs like rent, the owner gets a tenant in, and the community has one less eyesore. Less desirable retail spaces are also being utilized for recreational uses, like fitness centers, racquetball courts, mountain-climbing facilities and skateboard parks. No one knows for sure how many dark big boxes dot the American landscape, but the number is obviously sizable, with a number of retailers dropping out of the marketplace entirely and others downsizing or moving on. Service Merchandise had 227 stores nationwide when it filed for bankruptcy a year ago, and Montgomery Ward had 250 stores when the company bit the dust. While still operational, Kmart shuttered more than 600 stores during the past couple of years and put another 317 on the block, and Toys 'R' Us closed 64 stores last year and plans to close another 146 of its freestanding Kids 'R' Us and 36 Imaginarium stores. Add to that the number of grocers closing under-performing stores or being forced out of the market entirely; national and regional retailers, including department stores, losing ground or downsizing; and those growing bigger or seeking better, more convenient locations, and the picture begins to grow pretty dim.
Re-Cycling Big Boxes In the middle of the disposition cycle is a tight coterie of retail space disposition specialists, firms that have become experts at finding new tenants for dark spaces - a lucrative and risky business. Earlier this year, K-Mart put 317 of the locations up for sale. Kimco Realty entered into an exclusive joint venture to find buyers for the real estate. Kimco is likely to succeed in landing fresh tenants for most of the stores. There's a reason for that. Most of the Kmarts are good locations. More than a year ago, Chicago-based Klaff Realty LP bought designation rights - essentially options on real estate leases usually caught up in bankruptcy - on 220 liquidating Service Merchandise stores. On 25% of those properties, Klaff failed at redevelopment efforts and handed the leases back to the company. But for the other 75%, the firm found new tenants, most growing chains such as T.J. Maxx and Bed Bath & Beyond, or sold the leases back to landlords with ready tenants. Klaff also has taken positions on dozens of Kmarts over the years. One 2-story store in Chicago was split into a Kohl's and Burlington Coat Factory. Another 85,000 sq. ft. store in Naperville was split into a Marshalls and Linens 'N Things. A 50,000 sq. ft. Service Merchandise in Smyrna, Ga., was sold to a Lexus dealership for $8.5 million. 'You can hit some home runs in this business. It's a high-risk game, but if you know what you're doing, it can be very rewarding' Klaff says. How rewarding? Experts estimate that if Kimco pays $50 million for a bankrupt retail real estate portfolio, for example, it intends to sell the locations for a total of $60 or $70 million, or 20% to 40% higher than what it paid for the portfolio. The Subdivision Strategy Disposition work often involves attempts to subdivide space, which is rarely easy. Utilities must be split, new entrances carved out, signage moved and expensive fireproof walls erected. The bill for such work mounts quickly. It doesn't help that the biggest boxes, Kmart stores in particular, have narrow fronts and deep back-end space. Layouts like that are hard to break up. But the right ingenuity can surmount such obstacles. Michaels of General Growth, for instance, is in the process of carving up a 180,000 sq. ft. vacant J.C. Penney store in the company-owned Ala Moana Center in Honolulu. Spread over four levels, it will soon become home to some 30 separate replacement retailers. The complicated redevelopment project is both a testament to the tidy inventory of small tenants standing in line for space in prime malls and to the superior economics in renting to smaller tenants. Michaels won't say, but observers believe the mall owner will double its rent for the 180,000 sq. ft. by chopping it up into bite-sized parcels. Big boxes like Penney are valuable to shopping centers, but they are also notorious for the cheap rents they negotiate.
The mall's coffee court is being converted into 2,400 square feet of office space as part of a research project spearheaded by the Internet Home Alliance, whose members include Best Buy, IBM, Microsoft, Panasonic Technologies and Cisco Systems. The open workspace will have cubicles, meeting tables and computer stations, but no exterior walls. When it opens April 29, the "connection court" at the Shops at Willow Bend [owned by Taubman Centers] will offer free wireless Internet access, network printers, live news and stock reports on 52-inch plasma TV screens, conference tables, fancy Herman Miller chairs - even loaner laptops for shoppers to stop by and check e-mail. Their research will last five months, and the WiFi public space will remain open for one year. "We believe there is interest in that sort of a facility," said Tim Moorehead, general manager of the mall. "We already see a number of people appearing every day in our food court area and using it as a makeshift meeting environment." Kinko's is going after the same mobile worker that the Internet Home Alliance is targeting in Texas. Already, wireless Internet access at Kinko's has pulled in so many laptop-toting businesspeople that the chain is considering adding more perks for them, according to Jeff Heyman, vice president of Kinko's retail operation. Those include coffee, newscasts and large conference tables with built-in electrical outlets. Kinko's currently offers videoconferencing, computer and conference room rentals. Retailers aggressively rolling WiFi out include McDonald's, Starbucks and Borders Books & Music, each hoping new customers will be drawn in by the ability to check e-mail and surf the Web. Most major hotel chains, airports and train stations also have installed WiFi access or plan to soon. Shopping malls have not been aggressively adding WiFi, but that may be changing. The Westfield Group has installed WiFi service in 13 of its malls and plans to have it available in all 66 soon. So far, at least, it's a bring-your-own-computer plan for shoppers. "For us, WiFi is a multi-pronged strategy, and we want to be at the forefront," said Todd Putman, executive vice president at Westfield.
Third-quarter 2003 vacancy in downtown St Louis' more than 12.4 million sf of office space was 20.1%, the highest vacancy rate in the metropolitan area, according to Colliers Turley Martin Tucker's St. Louis Office Market Report. The high vacancy rate, combined with increasing sublease space, has kept class A lease rates around $18 per square foot for the last four years. City planners hope the construction of a $646 million St. Louis Cardinals ballpark and mixed-use village - which would contain more than 400 residential units, 400,000 sf of office space, an aquarium, a baseball museum, and street-level retail - scheduled to open for the 2006 season, will renew downtown vitality, as experienced in other similar-size markets such as Memphis and Cleveland. Quick Facts, Stats & Opinions Ownership of apartments by 14 real-estate investment trusts that are among the nation's top-50 apartment owners fell slightly in 2003, as private buyers picked up more properties, according to a new report by the National Multi Housing Council. REITs still managed to hold on to four of the top-10 spots in the council's annual top-50 owners' list. New York-based CharterMac, a private company, topped the list again in 2003, with an ownership interest of 309,292 apartments, up from 275,831 in 2002. AIV was in second place again, with 278,657 units, up from 261,000 units in 2002. EQR came in third place again, with 207,506 units, down from 223,591 units in 2002. It was among six REITs in the top 50 that decreased their holdings. (Ray Smith, WSJ 3-31) In 2003, grocery store sales in the Washington region totaled $668 per square foot, compared with a national average of just $375 per square foot, according to consulting firm Delta Associates, suggesting the market is still ripe for new competition. (Michael Barbaro, Washington Post 3-22) Urged on by the amount of equity capital available for public and private real estate, the number of companies deciding they want to become public REITs has been accelerating. Since January 2003, 11 REITs have gone public and 15 have registered for a new offering with the securities exchange commission, according to Dealogic. (Therese Fitzgerald, CPN 3-22) U.S. REITs produced total investment returns of about 38% in 2003, the best performance for 27 years. About 180 REITs are traded publicly in the U.S. holding real estate valued at a total of around $300 billion at the end of December. This amounts to approximately 8% of all U.S. real estate. (Steve Hays, Reuters 3-11) Robert Bach, national director of market analysis at Grubb & Ellis, expects the U.S. office vacancy rate to fall to around 16.9% in 2004, from 17.5% in 2003, and for average asking rents to continue to decline until mid-year and then stabilize. (Ray Smith, WSJ 3-16) The number of 401(k) plans offering real estate as an investment option doubled in the last five years to 11.8 percent, according to the Profit Sharing/401(k) Council of America. The amount of capital flowing into real estate mutual funds reached a high of $4.5 billion during 2003, up from $56 million in 2001, according to an AMG Data and Smith Barney report. The amount of capital going into publicly traded REITs rose to $224.2 billion in 2003, up 38% from 2002. (Andrea Jares, Ft Worth Star-Telegram 3-07) Through the close of yesterday's trading, the NAREIT Composite Index is up 8.6% [which is close to the averaged ICF and RWR year to date return] so far this year, compared to a 1.8% rise in the NASDAQ and an increase of 1.3% in the Dow, according to NAREIT numbers. Investor interest and fund flows remain strong. Mortgage REITs are leading the way, returning 15.2% year-to-date. That segment is followed by regional malls, up 14.9%, and healthcare REITs, which have risen 13.2%. (Neil Weilheimer, CPN 3-03) Health Care REIT Ventas (VTR) is raising its annual dividend by 21.5%, from $1.07 to $1.30 per share.(2-27-04) Raymond Mathis, Standard & Poor's Equity Analyst who follows real estate investment trusts, expects REITs to deliver returns of 11% in 2004. (S&P release throught PRNewswire 2-25) Update: Second Experiment in Stock Picking 3-31-04 A sector balanced portfolio is summed and compared with the average of two REIT index ETF's: ICF [Cohen & Steers Realty Majors - the top 30 REITs by market cap] and RWR [the REIT Wilshire Index]. The first experiment went from Nov 02 to Oct 03 and this experiment began at the end of April of 2003. NOTE: ICF and RWR dividends were added in March. ICF special dividend to be paid in December was never quantified on the Amex spreadsheet. So ICF's return be slightly understated. ICF div'ed again on 3-29 - payable in April - but that div is included in the March ending figures. Earnings Guidance: CARS expects 2004 FFO of $2.52 to $2.56 a share, up from its prior guidance range of $2.47 to $2.52 a share. Thomson First Call currently targets FFO of $2.51 a share for the year. On 1-21 CARS increased its quarterly dividend to $0.4165 from $0.4140. The new annual rate is $1.666 per share. CARS also reaffirmed its 2004 annual dividend guidance of $1.70 per share. The company expects 10% to 15% of that dividend to be a return of capital. RSE expects FFO of $4.10 to $4.20 per share in 2004. The forecast trails analysts' average expectations for FFO of $4.27 a share, with nine estimates ranging from $4.20 to $4.35. RSE increase in its common stock cash dividend to 47 cents a share from 42 cents. RSE expects that only 30% of 2003's cash dividend will be subject to the standard income tax rates, while the rest will qualify for the lower 15% federal tax dividend rate instituted in mid-2003. AMB gave 04 FFO guidance of $2.30 - $2.40/share in their Q4 conference call on 1-14-04. The current consensus estimate is $2.34. AMB declared a regular cash dividend for Q1-04, of $0.425 per common share. The dividend reflects an annual rate of $1.70 per share, an increase of 2.4% over the 2003 dividend of $1.66 per common share. The dividend will be payable on 4-15-04, to common stockholders of record at the close of business on 4-5-04. UDR estimates that recurring cap-exp for 04 will be $470 per apartment home, or $0.25 per share. UDR's guidance for 2004 FFO is a range from $1.48 to $1.60 per share; and guidance for Q1-04 FFO is a range from $.37 to $.38 per share. UDR announced a regular quarterly dividend on its common stock for Q1-04 in the amount of $.2925 per share, payable on April 30, 2004 to shareholders of 4-16-04. This represents a 2.6% increase over the same period last year. OFC gave 04 FFO guidance of $1.66 - $1.71/share in their Q4 conference call on 2-11-04. The current consensus estimate is $1.69. MLS increased the common stock cash dividend for Q1-04 by 5.3% to $0.595 per common share. The dividend will be payable 5-3-04 to shareholders of record on 4-23-04. MLS 2004 FFO Projection: $3.90 - $4.00. The current consensus estimate is $3.96. ARE on 3-17 declared a quarterly cash dividend of 60 cents per common share for Q1-04. The dividend is payable on April 15, 2004 to shareholders of record on April 2, 2004. The quarterly common share dividend represents a 3% increase to 60 cents per share from 58 cents per share paid for Q4-03. With one of the industry's lowest payout ratios, the Company announced this dividend increase after an aggregate dividend increase for 2003 of 16%. Update: Third Experiment in Stock Picking 3-31-04 A less than sector balanced portfolio is summed and compared with the average of two REIT index ETF's: ICF [Cohen & Steers Realty Majors - the top 30 REITs by market cap] and RWR [the REIT Wilshire Index]. The first experiment went from Nov 02 to Oct 03 and the second experiment began at the end of April of 2003. This experiment continues a shift towards being over weighted in retail and having two key holdings - MLS and VNO. REIT Links CIRE - Commercial Investment Real Estate Development Magazine Divident Discount Model @ REIT-Net NAREIT Real-Time Market Index National Real Estate Investor Real Estate Journals & Organizations ULI's Real Estate Capital Markets Update
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