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Short interest in Cedar Shopping Centers (CDR) and Public Storage (PSA) rose 2,105 and 172 basis points respectively, the study said. (Cedar was the target of an unsolicited takeover offer from Equity One (EQY), while Public Storage has been pressing hard to acquire Shurgard Storage Centers (SHU) despite Shurgard's rejection of the bid.) If these companies were excluded, short interest as a percentage of total float would have increased only 15 basis points over the year-ago period. The study showed that short interest as a percentage of total equity float within the REIT sector is now 110 basis points higher than the percentage of float that is shorted among New York Stock Exchange stocks in general. Topping the list of companies with the highest percentage of short interest in their floats were Cedar, FelCor Lodging (FCH), Trizec (TRZ), Maguire Properties (MPG), and First Industrial Realty (FR), where each saw their short interests increase to more than 8% in September.
"The Houston market has been inundated with hurricane refugees," said Ric Campo, Camden's chairman and chief executive. At his company's Houston properties, occupancy has jumped to 100% from 94% in the past week. He said this is the first time since 1991 that the company's Houston properties have been 100% occupied. "We've had 30 or 40 people camped out in apartment lobbies trying to get apartments at every property," said Campo. "The apartment market has changed dramatically in the past week." Plans are already in the works for Camden to build three more residential developments in Houston, said Campo. Campo said demand is also starting to spill over into Austin and Dallas. Greg Mutz, chairman and chief executive of Amli, said he too has seen demand for apartments in Houston soar and occupancy jump to 100% from 93% a week ago. "This is a huge crisis and it's sad to see all of these people showing up with nothing but the clothes on their backs," he said. Amli and Camden adjusted some of their leasing policies to accommodate the hurricane victims. For example, Amli allowed larger-than-normal numbers of people to stay in a single apartment and permitted pets into apartments that didn't normally allow animals. Camden allowed short-term lease signings of one to three months to accommodate people who expect to return to their homes in the next few months. However, the effects may wind up being long-term. When Tropical storm Alison hit Houston in 1991, the average apartment stay for people flooded out of their homes was nine months, said Campo. But, in that case, the flood waters disappeared in two days, he said. "In New Orleans, you don't have that luxury - the water is not going away because of the breaches in the levees," he said. "This is not a short-term deal. This is more of a long-term problem." If wood-framed houses with sheetrock are under water for a month or two, "you tear those down, you don't fix them," Campo said. "So it's a huge huge long-term problem." Mutz said it's hard to forecast if the residents will move to Houston permanently. "This could be either very long-term - meaning months or years - or it could be permanent," he said. "It's too close to the disaster and crisis (to predict)." Aside from Camden and Amli, other REITs that could potentially benefits from the increased demand for apartments from dislocated New Orleans residents include United Dominion Realty Trust (UDR) and Post Properties Inc. (PPS). Prudential Equity analyst Jim Sullivan sees demand for apartments surging in not only Houston, but Dallas, Memphis, and possibly Atlanta as well. Mutz has noticed an uptick in demand in Austin as well. This bodes well for REITs with big holdings in these areas as these residential markets have been weak for much of the past four years. "It looks like some areas will benefit from the pain in New Orleans," said John Lutzius, president of Green Street Advisors of Newport Beach, Calif. "It's an obvious dislocation of a lot of people and given the size of the devastation, it looks like some of that dislocation will be permanent." He expects Houston and Dallas seeing the big increases in apartment demand. The surge in demand bodes well for REITs that own apartment buildings in Houston and Dallas, as these markets have been weak for much of the past four years, said Jim Corl, chief investment officer for real estate securities at Cohen & Steers. Corl said many energy companies are talking about moving their New Orleans workers to Houston. "I think that will be a meaningful long-term impact," he said. He predicts the surge in demand will accelerate the recovery in these markets. Corl believes the financial impact could be "meaningful" for the apartment REITs - but not terribly significant. He said many of the REITs that had huge holdings in Houston and Dallas have been diversifying their portfolios to lower their exposure to these markets. "The impact will be fairly diluted down because a lot of these companies - like United Dominion and Camden that were concentrated in the Southeast - are now all over the country," he said.
The next round of interest rate increases by the Federal Reserve will put a damper on housing affordability and, hence, sales growth and pricing power," FBR says in the "Property Week" report it published Wednesday. In turn, apartment real estate investment trusts such as Archstone-Smith and AvalonBay -- which have luxury rental buildings in hot housing markets like California and the Northeast -- will see increased occupancy and eventually further rent growth, which will power earnings, according to FBR. The firm doesn't do any investment banking for either Archstone or Avalon. But the funny thing about mortgage rates is that they have remained persistently low, despite recent spikes in short-term interest rates. Eventually, however, fixed mortgage rates are expected to rise. And interest-only loans that feature adjustable rates are sure to become more expensive when short-term rates rise. With job growth anemic and mortgage rates low, over the past few years apartment REITs "have been operating in one of the toughest environments in 30 to 40 years," says Craig Kucera, the FBR analyst who covers apartment REITs and homebuilders. While housing prices have boomed, rents in many markets have been stagnant. Now, some REITs are already increasing rents, but as occupancy rates rise, they'll be able to push rents even further, he says. Investors have already been betting on this turnaround by apartment REITs, as Archstone rose 32% and AvalonBay jumped 41% in the past year.
Laurence Siegel - Chairman & CEO The Mills Corp. Laurence Siegel calls himself a scientist. As CEO of The Mills, he experiments with retailers and projects across the globe. “Retailers are crossing borders and expanding into other countries with abandon,” says Siegel. His father — an executive at Wanamaker's when he was growing up — introduced him to the world of retail. Siegel spent 10 years with Mills predecessor, Western Development, Siegel joined Mills, prior to its 1994 IPO, as executive vice president and vice chairman of the board. He was named chairman in August 1995. Soon after he took on the chairman and CEO title, Siegel launched Mills international development program, which has followed retailers into new markets. He started thinking about building regional malls outside of the U.S. more than 20 years ago. Realizing that good development opportunities in the U.S. were becoming scarce, he thought international expansion would be a viable growth vehicle. “It's not something that you can do very easily, and that's why most developers go overseas and acquire rather than develop,” Siegel notes. Unlike many U.S.-based retail real estate owners that have chosen to expand globally through acquisition, Mills has moved forward with development projects. Under Siegel's leadership, the REIT has built an international development pipeline that is unrivaled in the industry. “My belief is that the only way we can build a franchise is to do development from the ground up,” Siegel says, adding that Mills does call on local partners to help the REIT get through local approval and entitlement processes. “I think our formula has been very successful,” Siegel says. And few would disagree. The REIT's first international project, the 1.4-million-square-foot Madrid Xanadu in Spain, opened in 2003 95% occupied. Mills brought together retailers from 18 countries. “Before Xanadu, we were looked at very skeptically,” Siegel recalls. “But, we have proven that it can be done.” Xanadu was such a success that Mills has brought the concept to the Meadowlands in New Jersey. It has five separate sections appealing specifically to different shoppers: Children's education, Entertainment, Fashion, Food and Home and Sports. Later this year, Mills will break ground on Mercati Generali, an 850,000-square-foot retail and entertainment center in Rome near the Roman Forum and the Coliseum. Another regional mall is set to break ground in Milan in the next six to eight months, in addition to a one-million-square-foot project in Glasgow, Scotland. Now that Mills has made its mark in Europe, it's moving on to another continent. “We're now working on a new development opportunity in Asia, with a strong Asian department store as the anchor,” Siegel says. John Bucksbaum CEO General Growth Properties Bright, shiny apples. That's how John Bucksbaum describes the acquisitions that his company, General Growth Properties, has made over the years. “These companies with these great centers in good markets were like bright, shiny apples hanging on a tree,” says the REIT's CEO. “We saw the opportunity to fill our basket, so we picked them.” During the past decade, General Growth has been one of the most prolific mall buyers, driving consolidation in an industry that was fragmented both by ownership and geography. Bucksbaum, who became CEO in 1999, grew up as part of General Growth's family of companies. John's father, Matthew, co-founded the company with his brother, Martin. The biggest “apple” General Growth has picked, Bucksbaum notes, was the Rouse. General Growth completed the $12 million acquisition of Rouse last year, putting the Chicago-based REIT on even footing with the industry's 500-pound gorilla, Simon Property Group. As the largest mall transaction ever, the Rouse acquisition set a precedent, Bucksbaum says. “There are not many opportunities left to acquire large portfolios, so I do think that there will be some company-to-company activity — there could be some public mergers,” he says, quickly noting that General Growth is more likely to be an acquirer than a target. General Growth has a long history of harvesting quality assets. Realizing that a lot of quality mall properties were owned by smaller developers or institutions, Bucksbaum pursued low-hanging fruit initially, beginning with its 1994 acquisition of CenterMark Properties, the former shopping center arm of May Co. The acquisition added 16 regional malls and three power centers to General Growth's portfolio. John Bucksbaum, 48, is a 25-year veteran of the company. He served as president of General Growth of California and executive vice president and chief administrative officer for General Growth Properties. Bucksbaum has helped the company grow from a $1.2 billion market cap when it went public to $36 billion. “It was apparent that there was going to be limited new development going forward because most of the malls that were needed had already been built and there was not a lot of demand or a lot of opportunity for new product,” Bucksbaum says. Under Bucksbaum's direction, the REIT followed with the acquisition of Homart Development from Sears for $1.8 billion and U.S. Prime Property for $625 million. “I am not afraid to grow,” Bucksbaum says, “but it's important to have the ability to say ‘no’ and not try to buy everything that we had an opportunity to buy.” Giorgio Borruso, Principal Giorgio Borruso Design Italian-born architect Giorgio Borruso prefers to communicate without words, choosing instead to “speak” through design. With the acclaim that he's won, his designs say “chic.” Borruso recently won two Retail Traffic SADI awards (for Superior Achievement in Design and Imaging) for Italian apparel retailer Fornarina in Mandalay Place in Las Vegas and for Miss Sixty in Aventura mall, near Miami. “We're communicating a lot of things with the design of the space,” he says. Believing that retail design has a huge impact on people's lives. “People don't go to the museums, they go shopping.” Borruso's transition from professor to award-winning designer was driven by his understanding of his clients and their products. “We try to understand who they are and the product they are presenting,” he says. “Then we can build a language with the space.” The key, Borruso says, is to never forget that the product is the star. “My goal is to take the normal boring space and make it communicate the importance of the product,” he says. In the Fornarina store, for example, he says that the design for the dressing room communicates privacy to shoppers. In Miss Sixty, the dressing rooms are like cocoons. “These innovative spaces reinforce the unique experience,” said Jennifer Johanson, CEO and design director, Engstrom Design Group, when judging the SADI awards Borruso's approach has won him high-profile clients. His firm has been tapped by Snaidero USA, the North American arm of Snaidero Italia, an Italian manufacturer of high-end designer kitchen cabinetry and Fila, an Italian sportswear manufacturer. Both retailers were looking for a designer to reinvent their brands in the United States. “Giorgio Borruso has an extraordinary reputation for capturing that experiential quality,” says Sheryl Bloom, vice president of retail for Fila. “Borruso's Italian heritage, his fond memories of Fila growing up and his avant garde understanding of motion all culminated into a graceful and beautiful tribute to both the brand's history and its future,” Bloom says. Fila's new New York City store will open in September. Snaidero's showroom in L.A. opened in January. Borruso says that designing Snaidero's space was challenging, simply because of the product. “It is interesting because we're dealing with very large products that make up a kitchen,” he notes. Richard Sokolov, President and COO Simon Property Group Asset Intensification: These have become the bywords of the Simon Property Group as it expands into mixed-use with plans to build high-rises on unused space; even rent storage space in underused parking lots. “We're really focused on taking advantage of our assets and making them all that they can be,” says Simon's president and Chief Operating Officer Richard Sokolov. The 55-year-old executive heads up the initiative, which focuses on creating mixed uses for Simon's assets including multifamily, hotel and office space. Sokolov joined Simon in 1996 when the firm merged with DeBartolo Realty. Previously, Sokolov was president and CEO of DeBartolo. He joined its predecessor company, The Edward J. DeBartolo Corp., in 1982 as vice president and general counsel and was named senior vice president of development and general counsel in 1986. Nowadays, Sokolov spends his day managing development activities and making sure that Simon's new and redevelopment projects are moving beyond the existing regional mall footprint to incorporate non-retail uses. “We believe the addition of these uses makes our properties more attractive to retailers and shoppers,” says Sokolov. “The first goal is to maximize the retail space, then find incremental uses for the air above the retail,” Sokolov explains. Simon's newly opened project in Jacksonville, Fla., St. John's Town Center, for example, includes a variety of uses. In addition to the 1.5 million-square-foot retail component, apartment and condominiums are under development. But, it's not just Simon's new projects that will incorporate mixed uses. “Asset intensification is something that can be implemented within our existing portfolio, as well as incorporating it in virtually every new development,” Sokolov says. Previously, Simon sold off 100 percent of its interest in non-retail uses. However, under Sokolov's direction, the REIT is searching for partners for others uses. For example, Simon is collaborating with The Hanover Group and Metropolitan Life Insurance Co. to develop lofts on top of SouthPark Mall in Charlotte. Sokolov says the REIT, having already achieved positive returns from the initiative, is accelerating the process to find associates. In Austin, Tex., for example, Simon is searching for a partner to develop residential, office and hotel for its Domain project. Similarly, in Garland, Tex,, the REIT is pursuing a development partner to build 70,000 square feet of office space at Firewheel Mall. Retailer Consolidation and M&A Our fifth “player” is not an individual; it's a trend that has this year reshaped retail forever: Consolidation. There has been more merger & acquisition activity in the U.S. retail industry during the past 18 months than in the last five years, and it's not going to stop anytime soon, according to industry experts. Nearly $56 billion worth of retail transactions were completed from June 2004 to June 2005, compared to $51 million for the four years from January 2000 to May 2004, according to a recent report by McKinsey & Co. Just 10 years ago, there were nearly 500 public retail companies in North America; today, there are fewer than 300, according to Carl Steidtmann, chief economist and director of Deloitte Research. “Over the past thirty years, from department stores to discounters to big-box retailers the industry has gone through a dramatic process of consolidation,” Steidtmann says. “In virtually every mass merchandise category we are left with just a handful of large, extremely efficient players.” The huge wave of activity kicked off last summer with May Department Stores' $3.2 million acquisition of Marshall Field's from Target. It was quickly followed by the $400-million deal between Jones Apparel Groups Inc. and Barneys New York. Among other major deals closing this year such was the $11.5-billion merger between Federated Department Stores Inc. and the $11-billion merger between Sears and K-Mart, along with smaller deals such as GameStop Corp.'s $1.1-billion takeover of EB Games and Dress Barn Inc.'s $320 million acquisition of Maurice's Inc. “Frankly, we believe this wave of M&A is overdue,” McKinsey's report says. “The retail industry has long been characterized by a persistent underbelly of low-performing retailers. In fact, 35 percent of the industry has survived despite returns that are consistently near or below their cost of capital.” Increasing Efficiencies The recent consolidation has been driven by increasing efficiencies and benefting from economies of scale. “The thought process is that having a lot of scale and a lot of sameness in terms of merchandise would gain advantages in buying, staffing and administration that would allow them to compete more effectively,” says Nancy Koehn, a professor at Harvard Business School. Moreover, much of the consolidation helps retailers quickly establish a larger geographic foothold. For example, the Federated-May deal allows Federated to enter 15 new states. Similarly, Charlotte, N.C.-based department store operator Belk Inc. expanded its reach into 11 Southern states through its $622-million acquisition of Saks Inc.'s Proffitt's and McRae's chains. “M&A could help companies quickly acquire and strengthen the capabilities required to compete in today's retail landscape,” McKinsey's report claims. “Going forward, we expect these efficiency-based transactions to continue at least for a while. Some retail sectors have further consolidation potential (e.g., grocery and apparel manufacturing), and lingering retailers with mediocre to underperforming returns will remain potential targets for private investors.” For its part, Saks isn't done selling off its department store assets. The chain is “exploring strategic options” for its Northern mid-price department store division, which includes 143 stores under the banners of Carson Pirie Scott, Bergner's, Boston Store, Younkers and Herberger's. Saks is also looking to sell aits Club Libby Lu division, which operates almost 50 mall specialty stores aimed at the young teenage girl demographic.
Along with the increase, expect higher rents and fewer freebies to lure renters. "A very sizable share of the households who have relocated probably won't go back, and that share would seem to grow the longer they stay in this new setting and the farther they've moved from their previous homes," Mr. Willett said. D-FW Office Market The latest outlook for the D-FW office market is a mixed bag. The good news, according to Virginia-based Delta Associates, is that North Texas should have more than 4 million square feet of net office leasing this year. That would be the second positive year in a row for the bedraggled local market. So what's the bad news? Don't expect much leasing in Q3. Delta Associates, a research affiliate of Transwestern Commercial Services, is predicting a flat market for the Dallas-Fort Worth office sector this quarter based on preliminary estimates of local leasing. Researchers have seen the same slowdown in other major U.S. cities. And Delta Associates is tracking a similar drop in signed leases in industrial buildings. "The metroplex is making the kind of progress we have predicted over the last couple of years," said Delta Associates' Gregory Leisch. "Job growth is rebounding, and sublease office space continues to decline." Jack Eimer, president of Transwestern Commercial's central region, said it's evident that in many areas of the city, "rental concessions are finally starting to shrink." If there is an upside to the third-quarter slowdown, it's that it could help temper developers' spirits. A string of recent speculative office project announcements had worried some analysts. "It's important that we don't get ahead of ourselves and get too enthusiastic and start speculative construction," Mr. Leisch said. On 9-28 Legg Mason cut Education Realty to Hold from Buy. On 9-29 JP Morgan raised Mills to Overweight from Neutral. On 9-27 Merrill Lynch reinstates Colonial Ppties at Neutral. On 9-27 Wachovia starts Global Signal at Outperform. On 9-23 R James ups Biomed Realty To Strong Buy From Outperform and raises SL Green to Outperform from Mkt Perform. On 9-23 Lehman raises Reckson Assoc to Overweight from Equal. On 9-22 Morgan Stanley resumes ProLogis at Overweight. On 9-19 RBC cuts Pan Pacific Retail to Sector Perform from Outperform and raises Boston Ppties to Outperform from Sector Perform. On 9-13 Morgan Stanley starts Camden Property Trust at Equal-Weight. On 9-13 Harris Nesbitt starts Apartment REITs Apt Invest & Mgmt at Underperform, Archstone-Smith at neutral, AvalonBay at Outperform, BRE Properties at neutral, Camden Property at Outperform, Equity Residential at neutral, Home Properties at Underperform,T own & Country at neutral, United Dominion Realty at neutral, Sun Communities at Underperform, Affordable Residential at Outperform, Healthe Care REITs: Windrose Medical at neutral, Nationwide Health at neutral, Health Care Ppty at neutral, Healthcare Realty at Underperform, Ventas at Outperform, Office REITs: Arden Realty at neutral, Brandywine Realty at Outperform, Corporate Office Properties at Outperform, Parkway Properties at underperform, PS Business Parks at neutral, Kite Realty Group at neutral, Storeage RETIs: Public Storage at neutral, Sovran Self Storage at neutral, Shurgard Storage at Underperform, Extra Space Storage at neutral, Industrial REITs: EastGroup Properties at neutral, First Industrial at neutral, First Potomac at neutral, Liberty Property at neutral, Colonial Properties at neutral, Duke Realty at neutral, Retail REITs: Heritage Property at neutral, Entertain Ppties at neutral, Equity Lifestyle at neutral, Equity One at neutral, Cedar Shopping at neutral, Amer Land Lease At Neutral, and Acadia Realty at Outperform. On 9-08 Legg Mason started Boston Properties at hold and Mack-Cali Realty at hold. On 9-06 R James raises Realty Income to Outperform from market perform. On 8-31 Stifel Nicolaus starts Kite Realty at market outperform. On 08-30 CSFB starts General Growth Properties at neutral and Simon Property Group at neutral. On 8-30 Banc Of America ups Glimcher Realty to neutral from sell. On 9-07 S&P Puts Capital Automotive REIT Rtgs On Watch. On 9-08 Moody's Affirms Rtgs Of Developers Diversified (Sr DEBT AT Baa3); Rtg Outlook Now Positive. On 9-28 Moody's upgraded Simon Property Group's Sr Debt To Baa1; Stable Outlook. Fitch Upgrades Realty Income Corp Business Wire 9-07 Fitch Ratings has upgraded the following ratings for Realty Income Corporation: [1] $580 million outstanding senior unsecured debt to 'BBB+' from 'BBB'; [2] Approximately $125 million preferred stock to 'BBB' from 'BBB-'. The Rating Outlook - Stable. Fitch's ratings reflect Realty Income conservative financial profile demonstrated through the strength of the company's balance sheet and cash flows with debt plus preferred securities to undepreciated book capital averaging 36.3% for the last twelve quarters. During that same time period, recurring earnings before interest, taxes, depreciation, and amortization (EBITDA) coverage of interest expense has averaged 4.9 times (x). Realty Income has long utilized a fully unsecured leverage strategy with an unencumbered portfolio that currently covers total unsecured debt by 2.9x on a book value basis. Additionally, Fitch views favorably the track record of management and their acumen in employing their research driven approach to retail and their stringent credit underwriting of tenants and locations. This type of diligence has lead to occupancy levels never dropping below 97.7% in 36 years and more than 95% recoveries of rent when Realty Income did navigate through some tenant bankruptcies (e.g. Levitz, Econo Lube, and Carpet Max). Finally, the upgrade additionally mirrors Fitch's continued positive bias toward ratings in the REIT sector as a whole, reflecting 10 years of favorable default history, the broader acceptance of REITs as issuers in the public capital markets, more specifically the unsecured debt markets, and continued maturation of the companies with respect to infrastructure, controls, and corporate governance. Additionally, Realty Income's capital adequacy and expected recovery levels were measured as one of the highest within Fitch's REIT universe. Fitch's primary rating concern is the below investment grade profile, on average, for the majority of the company's tenants. This is coupled with the special purpose/single use nature of certain asset types that are seen as some of the larger contributors to rental revenue (e.g. convenience stores, child care centers, and restaurants). Fitch does take some solace in the company's conservative underwriting and its propriety DARTH scoring system to underwrite and monitor these credits. Additionally, the company has taken steps to diversify its cash flow streams. Currently, the portfolio includes 98 retail chains in 30 separate retail industries with concentrations in the top five retail industries in Realty Income's portfolio contributing 56.2% of rental revenue and are as follows: convenience stores (18.8% of rental revenue), child care (13.2%), restaurants (9.1%); automotive services (7.8%), and auto tire services (7.3%). Fitch believes that it is important to note that as of Dec. 31, 1996, the child care category (42.0% of annualized rent) combined with the restaurant category (24.4%) accounted for 66.4% of rent. Through acquisitions, dispositions, and capital recycling, the company has been able to introduce new retail segments into the tenant roster and reduce its concentration in child care and restaurants by over 65% between Dec. 31, 1996, and June 30, 2005. Finally, Fitch notes that the company has a stated goal of not allowing any one particular retail category to exceed 20%. Recurring EBITDA coverage for the last 12 months (LTM) has slipped below the three-year average to 4.5x, a metric that continues to support the rating category. Additionally, in that same LTM period, leverage has increased slightly over long-term averages but to levels that affords Realty Income capacity within their current capital structure. As of June 30, 2005, the company's unencumbered assets, at book value, supported unsecured borrowings by 2.9x. In a punitive scenario, if the company fully drew its $300 million line of credit but did not get credit for investment of these funds, the unencumbered coverage would drop to 2.1x. Realty Income was founded in 1969. As of June 30, 2005, the company owned 1,582 properties with a book value of $1.8 billion and an average occupancy rate of 98.2%. The company is an active buyer of net-leased retail properties nationwide with assets in 48 of the 50 U.S. states. The company's diversified portfolio consists of over 12.4 million square-feet leased to 98 regional and national retailers operating in over 30 retail segments with an average remaining lease term of 12 years and an average leasable retail space of 7,900 square feet. Quick Facts As this month began, the 30-day average for balanced-fund yields was 1.91% -- about two-thirds of a real-estate fund's 2.81% -- but the balanced funds had half the volatility, says Morningstar, the Chicago investment-research firm. In addition, both balanced and equity-income funds -- with a 1.76% average 30-day yield -- beat utility funds' 1.54% yield. Real-estate and utility funds each averaged 24% annualized gains for the three years through Wednesday, says Morningstar, versus 16% for large-cap "value" funds, which include many equity-income portfolios; 7.6% for Morningstar's "conservative allocation" category, which balanced funds dominate, and 14% for convertible funds. (Jonathan Burton, WSJ 9-25) "The REIT industry today is hitting $300 billion in equity market capitalization," he says. "That's about 10 percent to 11 percent of commercial real estate in the United States. Over the next 10 to 20 years that number could go up to 20 percent. Down in Australia, their version of the REIT owns 50 percent of the commercial real estate. If that's a precedent, REITs have a ways to go." (Kenneth Campbell, managing director of ING Clarion Real Estate Securities, NaRIETs Portfolio Magazine, Sept-Oct 2005) More REIT Links News Links
Update: Fourth Experiment in Stock Picking 9-30-05 A less than sector balanced portfolio is 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]. This is part of a continuing experiment to see if an individual investor can find some benefit in buying individual stocks. Four of the stocks below [MLS at 50.72%, DDR at 38.25%, VNO at 44.24% and OFC at 44.62%] notably out-performed the REIT sector average of 32% for the full year of 2004. This portfolio beat the sector average in 2004 by 300 basis points - so some regression to the mean is to be expected. Note that this portfolio, while being weighted toward higher growth and lowering yielding REITs, still pays a higher dividends per quarter than RWR and ICF. Earnings Guidance & Dividend Changes: OFC gave 05 FFO guidance of $1.78 - $1.85 per diluted share in their Q4 conference call on 2-10-05. The current consensus estimate is $1.84. OFC on 5-19 declared a quarterly dividend of $0.255 per Common Share of beneficial interest [an increase from 24 cents/share]. The dividend will be paid on 7-15 to shareholders of record on 6-30. UDR on 2-16 announced a 2.6% increase in its dividend for 05 to $1.20 per share. ARE on 2-14 updated its 2005 earnings guidance to an FFO of $4.78 [vs a current consensus of $4.80]. On 5-11, ARE announced expected 05 FFO/share to be $4.79. On 6-20 ARE raised dividend 3% To 68 cents per share. ARE announced 8-02 that expected 05 FFO/share to be $4.81. AMB on 3-01 declared a regular cash dividend for Q1 of $0.44 per common share. The dividend reflects an annual indicated rate of $1.76 per common share, an increase of 3.5% over the 2004 annual dividend. On 4-12 CARS announced that it raised the company's quarterly dividend to 43.8 cents per share, payable on May 20 to shareholders of record as of May 10. On 7-12, CARS increased its dividend 2% to 44.6 cents per share from a prior level of 43.8 cents. The company also reaffirmed its guidance for an annual common share dividend of $1.80 per share in 2005. HR on 4-26 announced its 47th consecutive dividend increase to $0.655 per share. At this rate, quarterly dividends approximate an annualized dividend payment of $2.62 per share. Update: Fifth Experiment in Stock Picking 9-30-05 Given the amount my portfolio has changed, I started a new 'experiment'. Or maybe I got tired of seeing my results trail the ETFs - and wanted to have something on this page that stroked my ego. I really should have bitten the bullet and bought VTR and a Hospitality REIT or two - but after buying a third MLP [XTEX added to existing holdings EPD and ETP] - I did not have the funds. Or maybe I just wanted the security of holding a bit of cash. So I am starting this experiment with a portfolio balance that is a bit off. But I do like the additions I made from the 05 starting portfolio [by adding CNT and GGP, and on 9-09, more shares of DDR when I sold CARS, which is being bought out and going private].
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