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In a study, J.P. Morgan analyst Michael Mueller found that First Industrial (FR), FelCor Lodging (FCH), Bedford Property (BED), Essex (ESS), Glimcher (GRT), CenterPoint (CNT), LTC Properties (LTC) and Post Properties (PPS) had the highest percentage of short interest in its share float. All had short interests that made up 6% or more their total floats. In normal trading times, shorts make up only about 1.3% on average, Mueller said. A company's liquidity appeared to play a role in attracting shortsellers. "More liquid stocks are likely to draw more short interest since closing out of those positions (purchasing the shares) is less likely to impact the stock price," Mueller wrote.
Big apartment companies including BRE Properties, Camden and Home Properties, are requiring renters insurance or are using programs that make it easier for residents to get it. The push applies to new tenants as well as existing ones whose leases are up for renewal, and is partly a response to the rising costs of insuring apartment properties, which typically have higher exposure to fires, slips, falls and assaults than most other commercial properties. Property-insurance rates for apartment landlords rose on average between 30% and 50% in 2001 and 2002, while liability-insurance rates rose between 40% and 50% during that period, according to Eric Schake, a managing director with insurance broker Marsh. More recently, rate increases have slowed, and in some cases rates have even decreased, but that's partly because landlords have been taking on higher deductibles. A consumer survey conducted last year for the Independent Insurance Agents & Brokers of America, an Alexandria, Va.-based industry association, found that nearly two-thirds of the more than 81 million people living in rental properties don't have renters insurance. The average cost of renters insurance is $12 a month, or $144 a year, for about $30,000 of property coverage and $100,000 of liability coverage, with a deductible of $250, according to the Independent Insurance Agents & Brokers of America. Tenant groups, while not opposed to the idea of renters insurance, oppose landlords requiring it. Tenant lawyers say landlords can put such requirements in their lease contracts, except for rent-regulated apartments.
Rents were flat in Q1 at an average $867 a month. The vacancy rate climbed to 7.1% -- the highest since 1987 -- on negative absorption of 17,100 units. To add to the troubles, another 92,000 new units are scheduled to be completed this year. The effects of the prolonged downturn continue to build for landlords, especially those with suburban office properties, which typically have three- or five-year leases. Leases signed three or four years ago during the height of the market are rolling over, and tenants are able to pay an average 20% less than they were paying on leases signed in early 2001. Leases in downtown-area buildings are generally seven to 10 years in length, so landlords with buildings there are more immune to the rollover effect.
Average rents stayed flat at $4.25 a square foot, according to Reis. Grubb & Ellis research, which breaks out rent levels for several types of industrial properties, shows warehouse rents falling to $4.35 a square foot, from $4.39 in Q4-03 and $4.43 a square foot in the year-ago first quarter. The firm says rents for research-and-development/flex industrial space fell to $9.47, from $9.96 in Q4-03 and $11.07 a year ago. Absorption, or the net change in the amount of occupied space, was modestly positive, both firms reported.
The rankings: 1 Orange County, Calif. 2 Washington D.C. 3 San Diego, 4 Fort Lauderdale, 5 San Francisco, 6 Riverside-San Bernardino, 7 West Palm Beach, 8 Los Angeles, 9 New York City-Manhattan, 10 Oakland, 11 Boston, 12 Northern New Jersey, 13 Phoenix, 14 Las Vegas, 15 Tucson, 16 Sacramento, 17 Atlanta, 18 Chicago, 19 Miami, 20 Seattle, 21 Austin, 22 Orlando, 23 San Jose, 24 Tampa 25 Minneapolis-St. Paul, 26 Houston 27 Philadelphia, 28 Dallas-Fort Worth, 29 Jacksonville, 30 Portland, Ore. 31 Salt Lake City, 32 Denver, 33 Cincinnati, 34 Charlotte, 35 Cleveland, 36 Detroit, 37 Columbus, 38 Milwaukee, 39 Indianapolis and 40 Kansas City. Some surprises in the 2004 index, which ranked 40 markets, included Manhattan and Oakland both climbing into the top 10 this year, while Boston and Sacramento dropped out of the top 10. The strongest gains were posted by Seattle, which moved up 10 places to 20; Salt Lake City, which moved up six to 31; and Tampa and Phoenix, which moved up five each to 24 and 13, respectively. Jeffrey Lyon, chief executive of GVA Kidder Mathews in Seattle, cited strong population growth and job stability as reasons why Seattle has good retail potential. Salt Lake City's jump is attributable to expected high levels of household growth, according to Marcus & Millichap. Gregory Valladao, senior vice president at commercial real-estate services firm Grubb & Ellis/BRE Commercial in Phoenix, points to job and population growth, which should lead to higher consumer spending, as boding well for retail in Phoenix. Marcus & Millichap says Tampa moved up on the list because its economy is improving at an above-average rate, with strong job growth and immigration expected to boost retail sales. Manhattan moved up three spots to ninth place, in large part because its "economy is doing much better and because there are constraints on construction," which means minimal new construction, says Bernard Haddigan, director of Marcus & Millichap's national retail group. Also, "Manhattan is rich in consumers ... it's a densely populated area," which makes it a fertile investment area. Oakland moved up four spots to 10th place on expectations for strong population growth. Boston fell seven places to 11 and Sacramento fell six places to 16, according to the index, mainly because those markets are forecast to register employment gains of less than 2% this year. Midwest markets Indianapolis, Milwaukee, Columbus, Ohio, Detroit, Cleveland and Cincinnati made up six of the bottom 10. "Most of the job-growth projections are more on the coasts than in the Midwest," says Tom Powers, a principal in the Cincinnati office of Colliers International. "So when large institutional investors and buyers want to invest, they're looking at putting money where job growth" is strongest.
The firm started out as a conventional mortgage REIT, buying up groups or "pools" of home-mortgage loans that had been turned into securities -- that is, bonds, typically with adjustable interest rates. These collateralized mortgage obligations (CMOs) are the basic assets of REITs such as Annaly Mortgage Management (NLY), but Thornburg decided to move into a more profitable realm. While retaining a chunk of CMOs, he branched out into originating mortgages himself. "We decided to create a new kind of mortgage company," he told me. He lends mainly to wealthy individuals who have the best credit. "We make only adjustable-rate mortgages, and we keep every mortgage we make." In other words, Thornburg Mortgage owns the loans and collects interest on them, rather than selling them to a large financial institution or slicing them into CMOs for investors. Thornburg offers its mortgages over the Internet and in print advertising and direct mail, and it farms out the underwriting and the servicing. The firm has no branches, no expensive overhead. So far it has made about $8 billion in loans, averaging about $500,000 each, with a low loan-to-value ratio of about 67% -- which means that the borrowers retain a lot of equity in their homes, reducing Thornburg's risk. How good are the loans? "Our cumulative credit losses since we began acquiring loans in 1997 total just $174,000, and we have not realized a loan loss in the past eight quarters," says the firm's annual report. Thornburg himself adds, "Our delinquent loans are two basis points," or 0.02% of the portfolio. That's a flabbergastingly low number in the lending business. So why don't other lenders use the Thornburg model? "Banks have a legacy system," he says. They have networks of branches; they're trying to sell customers stocks and certificates of deposit and car loans. "We can do this one thing better than anyone else." In fact, the service is so good that nearly one-fourth of the mortgages come from referrals from current customers, shareholders and employees. One of the features: You can change the terms of your loan (say, from a mortgage that adjusts every month to one that locks in a higher rate for three years and adjusts annually thereafter) by paying a $1,000 fee. Thornburg Mortgage builds its portfolio so that its borrowing matches its lending. In other words, when it sells an adjustable-rate mortgage that guarantees a rate for three years, it funds that mortgage by borrowing money at a fixed rate for three years. The good news is that many investors don't seem to have a clue about Thornburg's mortgage business. As Robert Mitkowski Jr. of Value Line wrote recently, "Investors sold off the . . . shares this month when better-than-expected job market figures suggested the Federal Reserve might soon begin raising interest rates." In fact, higher short-term rates won't hurt the company at all, says Thornburg. "We're better off with interest rates higher rather than lower," he says, since his interest income will rise, too, increasing the firm's return on its fixed equity. Over the past five years, since Thornburg began revising his REIT's business, the dividend has risen annually, from 91 cents a share to $2.49. An estimate of $2.60 appears about right for 2004, and the stock on Thursday was trading at $25.30. That's more than 10 cents on the dollar -- and, if history is a guide, the return will rise in the future. There are drawbacks. The dividend from Thornburg Mortgage, as a REIT, is fully taxable at the ordinary income rate. It does not qualify for the current 15% rate cap of conventional corporate dividends. As a result, Thornburg Mortgage is best held in a tax-deferred account such as an IRA. Also, 10% dividend yields don't come risk-free. If the economy heads south or if interest rates soar, borrowers could become strapped for cash, and loan losses could rise. Hedging interest-rate exposure -- that is, balancing assets and liabilities -- can be tricky. And Thornburg is expanding like crazy, which isn't easy for a REIT, since it has to pass at least 90 percent of its profits through to shareholders each year.
EOP reaffirmed its commitment to paying its dividend. Currently, the company has about a $150 million to $200 million cash shortfall that requires it to use other funds, such as a combination of asset sales and other borrowings, to pay its dividend. EOP reported net income available to common shareholders totaled $65.3 million, or 16 cents a share, compared with $141.7 million, 35 cents, last year. Revenue was $796.2 million, versus $788.7 million a year ago. Richard Kincaid, EOP's CEO, said in the company's conference call that the current shortfall will decline dramatically in 2005 and the company expects to be able to cover its dividend from cash flows from operations in 2006. These assumptions are predicated on the economic recovery remaining "fairly robust," and employment growth remaining moderate. Despite weaker income and funds from operations, Equity Office said other metrics were showing improvements. Kincaid said the net absorption rate is improving. In addition, roughly 1.4 million square feet of early lease terminations were executed in the quarter, but that was down from 1.7 million in Q4-03. Fewer customers are reducing their space requirements. Kincaid said about 20% cut their needs in Q1 compared to between 30% to 40% last year. There were also encouraging signs in some key markets that had been weak for Equity Office, such as San Francisco, San Jose and suburban Chicago. Kincaid also highlighted that national statistics show an improving, or at least stable, office environment. Kincaid expects the vacancy rate in Equity Office's top 20 markets will fall to around 16% by the end of 2004. But some analysts pointed out that EOP suffered lower occupancy rates, lower rents, and leasing costs that are expected to rise for the balance of the year to between $18-$20 per square foot. And that national data aren't necessarily being mirrored in Equity Office's portfolio. Taylor and other analyst expect the 2005 cash shortfall to be similar to 2004's, though few expect it to deteriorate any further. EOP is also facing the prospects that higher-priced leases are expected to expire over the next 12-18 months and newer leases aren't seen producing the same revenue. EOP on Acquisitions: "In aggregate, we think the acquisition market remains competitive but we're seeing a few more opportunities that look promising and we believe as the year progresses and interest rates rise we think we'll see more deals that meet our return requirements," Kincaid said. EOP on Economic projections: The company continues to expect GDP in the U.S. to rise between 4% and 4.5% in 2004, and total employment to rise 1.5%. Office job growth in the company's top 20 markets is seen rising 2.5% in 2004. Upward pressure on rates will likely result in a yield on 10-year Treasury notes of 5%, compared with around 4.5% now.
"For Keystone shareholders, we believe the $23.80 price is excellent," said JP Morgan analyst Anthony Paolone, in a note. Paolone and other analysts noted that ProLogis is acquiring the company through its investment funds. By doing this, ProLogis doesn't have to put much cash upfront and the deal can have above-average leverage of 60% to 65%. ProLogis will hold a 20% ownership stake in the partnership fund that owns the portfolio, but still enjoy management and performance incentive fees from the properties. The Eaton Vance affiliates will hold an 80% interest in the partnership. In a note, Morgan Stanley analyst Greg Whyte said he expects ProLogis to enjoy operating efficiencies and possible leasing and overhead cost savings in some of Keystone's major markets since ProLogis already operates in those markets. Lehman Brothers analyst David Harris, in a note, said the acquisition will boost its presence in New Jersey and Miami, which will help to shift its geographical balance slightly away from its heavy current weighting in Atlanta and Dallas.
What has changed? The marketplace, has evolved in the last five years to the point where we can have our capital out of these buildings, and still maintain a fair amount of control. Hospital administrators say that it makes sense to sell buildings that are not part of their core mission in order to use the proceeds to invest in capital-intensive needs like new and ever-costlier technology. Because of the weakened economy and lower interest rates, hospitals have been earning less from their investments, and receiving less from donations, according to a report by the Health Care Financial Management Association. From 2001 to 2002, the amount of capital available to hospitals from bonds, loans, donations, equity issues and equipment leases dropped from $51.4 billion to $36.5 billion in 2002, the report said. Laws intended to prevent doctors from referring Medicare and Medicaid patients to health providers in which they have a financial interest have given hospitals another reason to remove themselves from the commercial real estate business. Under these so-called Stark laws, hospitals are required to lease space at fair-market rents. A real estate company may also find it easier than a hospital to raise a doctor's rent. Medical Office Properties, a private real estate investment trust that owns 1.3 million square feet of space, has been gradually raising rents, so far without repercussions, said Daniel Colhoun, a senior VP. "A doctor wouldn't move because of a rent increase of 50 cents a square foot," Mr. Colhoun said. "But a general office tenant would move overnight." The Financial Markets Changed Too With many conventional office buildings struggling with high vacancy rates, medical office buildings, especially those on hospital campuses, have become attractive to investors because they are filled, often to capacity, with long-term tenants who are loath to relocate and are not buffeted by economic downturns, real estate specialists say. Because such buildings are rarely built on speculation, their supply is limited. Last year, $1.3 billion worth of medical office buildings individually valued at $5 million or more changed hands, according to Real Capital Analytics, a New York research company that tracks large real estate sales, up from $954.6 million in 2002 and $787.8 million in 2001. So far this year, Real Capital Analytics has identified $330 million in sales that have closed, with another $401 million under contract, said Robert M. White, the company's president. Last year, HCP Medical Office Portfolio, a venture of HCP and GE Commercial Finance, paid $575 million for 113 medical office buildings in 16 states owned by MedCap Properties. In one of the costliest deals in terms of price per square foot, Washington Real Estate Investment Trust paid $78 million, or $312 a square foot, for the three medical office buildings that make up the Prosperity Medical Center near Inova Fairfax Hospital in Falls Church, Va. Medical office buildings cost about 15% to 20% more than ordinary office buildings, largely because of the need for extra walls and plumbing. The offices are divided into small examining rooms, each of which must be equipped with a sink. Another factor fueling the growing interest in this real estate niche is the demographic shift of an aging of the population is putting a tremendous demand on services. Prrocedures like tonsillectomies and cataract surgery that used to be performed in hospitals are increasingly taking place in medical offices.
Even if rates hadn't risen, according to the Deutsche Bank analysts, REITs were headed for a fall. They had gone too far too fast, went the reasoning. For example, the Vanguard REIT Index Fund (VGSIX) returned 36% last year after averaging gains of 15% annually from the start of 2000 to the end of 2002. When interest rates rise, bad things can happen to real estate. First, REITs themselves borrow money to buy property, and the interest rates on some of that debt will increase, cutting into profits. Consider Rouse. Rouse has $4.5 billion in debt and pays $223 million in interest on those loans. If the rate on Rouse's overall debt rises half a percentage point, that's $22 million in additional expenses, a big number for a company whose net profit in 2003 was $140 million. The second problem with higher rates is that the companies and people who rent the properties that REITs own may become strapped for cash themselves as their borrowing costs rise. And the third problem: When five-year Treasury notes shot up from 2.8% to 3.5%, Rouse's dividend yield, which in fact was 3.5% on April 1, lost some of its luster. So Rouse's stock fell, and its dividend yield is now 4.3%. On the other hand, maybe the three negatives are outweighed by a single positive. As the Deutsche Bank analysts put it, "Rising interest rates imply a stronger economy which would benefit all property types." In other words, rates rise because business is booming, companies are earning higher profits and more people are employed at higher salaries. As a result, the properties that REITs own can boost their rents a lot more easily than in a sluggish economy when it's tough enough just to sign leases. The Deutsche Bank analysis, which I find convincing, points out that, when interest rates start rising, the yield on 10-year Treasurys typically increases 2 to 3 percentage points over 12 to 18 months. So expect T-bond rates of 6% or so by the end of 2005. NOTE: Every time I have checked these stats, I have changed them - so it is probably not error free and not ready for publication. Let us calculate - March's 3.8% yield plus 2.5 percentage points expect yield movement in the 10 yr Treasury = 6.3% for the 10-yr and probably a 7.8% required yield for REITs. At a 6% yield, every 1 dollar in dividends would generate a $16.66 price. My $16.66 buys me one share in a stock yielding one dollar a year. Let's accept the presumtion of a 4% annual rise in yields. So in 18 months my $1.04 in annual dividends at a 7.8% yield would generate a price of $13.33. But in 18 months my one share would also gain $1.52 in dividends - leaving me with $14.85. I have lost $1.81 before taxes on my dividends. Let us re-calculate using bullish assumptions - March's 3.8% yield plus a much smaller 2.0 percentage points expected yield movement in the 10 yr Treasury = 5.8% for the 10-yr and probably a 7.3% required yield for REITs. Let's speculate that our growth REIT can raise dividends at 5% per year - thus a 7.625% rise over an 18 month period [1.00 times 1.05 times 1.025]. So in 18 months my $1.07625 in dividends at a 7.3% yield would generate a price of $14.74. But in 18 months my one share would also gain $1.525 in dividends [1.00 for the first year plus half of 1.05 for the second year] - leaving my with $16.26525. I have lost 40.475 cents before taxes on my dividends. Let us re-calculate using the same bullish assumptions but this time waiting for a further REIT correction - March's 3.8% yield plus a much smaller 2.0 percentage points expected yield movement in the 10 yr Treasury = 5.8% for the 10-yr and probably a 7.3% required yield for REITs. Let's speculate that our growth REIT can raise dividends at 5% per year - thus a 7.625% rise over an 18 month period. But this time we have waited for a further REIT correction to a current yield of 6.50%. So I start with paying $15.38 for my $1.00 in dividends. In 18 months my $1.07625 in dividends at a 7.3% yield would generate a price of $14.74 - still losing money on the stock. But in 18 months my one share would also gain $1.525 in dividends [1.00 for the first year plus half of 1.05 for the second year] - leaving me with $16.26525. I have made 88.525 cents before taxes on my dividends. My effective yield over that period has been cut by 42% assuming I sell at that point. But I have caught the falling knife without too much injury. Keeping the same assumptions as above but changing the falling point to a 6.3% yield and paying $15.87 for the dollar div, the fall to $14.74 [7.3% yield] plus the $1.525 div leaves me with 16.2625 and a 39 cent gain. At a 6.2% yield and paying $16.13 for the dollar div, the fall to $14.74 [7.3% yield] plus the $1.525 div leaves me with 16.2625 and a 13 cent gain. Keeping the same assumptions as above and keeping the falling point at a 6.3% yield and paying $15.87 for the dollar div, the fall to a [changed and lower] 7.4% yield on the 1.07625 dividend generates a new and lower price of $14.54 - plus the $1.525 dividend leaves me with $16.06 and a 13 cent gain. At a 6.3% yield and paying $15.87 for the dollar dividend, the fall to $14.35 [the price at a 7.5% yield of a $1.07625] plus the $1.525 dividend leaves me with $15.87 and break even. The average yield for the 155 REITs that make up the Bloomberg REIT index - which includes every REIT with a market cap of at least $15 million - was 5.95% on Tuesday. But with REITs, unlike with bonds, investors have growth on their side. Deutsche Bank expects earnings and dividends to rise between 5% and 8% a year. Value Line projects 7.5% annual dividend growth for Rouse over the next six years. Is this a good time for investors to add REITs to their portfolios? My own view is that market timing is as senseless for REITs as for other investments. Don't guess about the direction of prices or interest rates. If you don't own REITs, get some - maybe 5% to 10% of your stock holdings. They'll add ballast to your portfolio, and you'll reap nice dividends along the way.
A big part of retailers' strategy has been differentiating themselves from one another - shoppers are less likely this season to find the same Liz Claiborne or Tommy Hilfiger fashions in every department store in every mall. And stores are relying more on their own exclusive private labels. For the first three months of the year, the department-store sector averaged a sales increase of 5.4%, compared with a 4.9% decline in the year-ago period, according to the International Council of Shopping Centers-UBS sales tally. The tally is based on same-store sales. Overall, retailers' same-store sales so far this year are up 6.5%, with discounters' sales up 5.9% and mall-based apparel store sales up 8.1%. The biggest sales growth has come from upscale department stores such as Neiman Marcus and Nordstrom, the first beneficiaries of the economic recovery, having enjoyed double-digit sales increases. But midtier department stores owned by Federated Department Stores and May Department Stores have seen some solid improvements. Quick Facts, Stats & Opinions Apartment occupancy in Houston was 86.5% after the third quarter of this year, down from 90% during the same time last year, according to Apartment Data Services, a local research firm. And the number of apartments is still growing. So far this year, nearly 3,300 new apartments have been added to Houston's inventory. And by the end of 2004, that figure could reach 20,000. (Nancy Sarnoff, Houston Chronicle 5-15) Deep rental discounts are drawing companies downtown. With a 21.2% vacancy rate, Houston's Central Business District has rents that are averaging less than $20 per square foot, and often much lower. (Nancy Sarnoff, Houston Chronicle 5-15) Deutsche Bank analyst Louis Taylor downgraded three REITs - PP, RA, and NXL - to hold from buy to reflect his revised outlook for REITs. Taylor said he had upgraded the three REITs in February, when fund flows into the REIT sector were frothy and he assumed investors would flock to names with high dividend yields. But, with REITs taking a severe hit over the past month, his views have changed. Taylor is now predicting that investors will selectively seek out REITs that either offer a good "growth story," with strong projected FFO and dividend growth, or a "value story" that offers a high dividend yield and a cheap price. Taylor predicts that REITs that fall in the middle of these two camps, such as PP, RA and NXL, will get little investor attention. (Janet Morrissey; Dow Jones Newswires 5-05) In theory, a drop in REIT stocks means that real estate investment trusts will have a harder time raising money by issuing stock, leaving them with less capital to bid on properties. Also, REITs sometimes use their shares to acquire properties, so a drop in stock price hampers their ability to conduct such acquisitions. With less overall demand for properties, real estate prices would drop. But that doesn't seem to be happening, at least not yet. In practice, REITs use a variety of sources of capital, and any decrease in influence in real estate prices should only have a small effect. (San Francisco Business Times 4-30) CoreNet Global, an association of corporate real-estate executives, commissioned Gallup to conduct a poll of corporate real-estate managers to assess the impact of technology and other issues on how employees and companies operate now and will in 2010. Nearly 40% of the 314 respondents say that 25% or more of their company's knowledge workers -- white collar, technical or administrative workers -- will be working remotely, such as from home, a client office or a Starbucks, in 2010. (Sheila Muto, WSJ 3-31) Update: Second Experiment in Stock Picking 5-28-04 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. CARS on 4-13 announced that it declared a quarterly dividend of $0.4200 per common share of beneficial interest for Q1 ending March 31, 2004. The dividend is payable on May 20, 2004 to shareholders of record as of May 10, 2004. 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. -- On 4-19 RSE said it expects FFO to be in the range of $3.75 to $3.85 per share. The outlook includes a 35-cent-a-share charge for the termination of the company's pension plan. Analysts on average expect the company to post full-year FFO of $3.93 per share. [Yahoo has the average at $3.84] 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 5-28-04 A less than sector balanced portfolio [see last sentence] 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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