|
Yahoo Daily #s Office Industrial Retail Mall Health Triple Net Apartment Hospitality NAREIT Index Factoids MLP Stats BDC Stats Big Banks NE Regional SW Regional Prior REIT Updates Dec Off/Indust Dec Retail Dec Hlth/3-Net Dec Apt/Hosp Nov Off/Indust Nov Retail Nov Hlth/3-Net Nov Apt/Hosp Oct Off/Indust Oct Retail Oct Hlth/3-Net Oct Apt/Hosp Sept Off/Indust Sept Retail Sept Hlth/3-Net Sept Apt/Hosp REIT Links Block on REITs CPN CSA Globe St. ICSC Real Est. Journal Reis ReBuz RSR NaREIT NREI Property ICSC REIT Cafe REIT Week REIT Net NAIOP ShopCntrsToday ShopCntrWrld Ind & Office Realtors Yahoo Sortable REOC List Yahoo Stock Screen Stock Charts |
REIT Returns Tied to Tenants Nicholas Yulico, Street.com 10-05 The health of tenants not only is an important factor for commercial real estate landlords' profits; it is also closely tied to their stock prices. New research from Bank of America shows that the stocks of office real estate investment trusts are generally correlated to the stocks of financial-related companies, which tend to make up a good portion of their tenant bases. In addition, retail REITs, which own malls and shopping centers, are well correlated to retailer stocks, according to the report from analyst Christy McElroy. Over a three-year and five-year period, the correlation between office REITs and the S&P IBK/Brokerage and Financial indices is around 0.95. In measuring correlation, a reading of 1.0 suggests the two sectors' stock prices move in the same direction at all times. Thus, the 0.95 reading means that office REITs and financial stocks are nearly always moving in lockstep fashion. Retail REITs and retailer stocks are also well correlated over thee-year and five-year periods. Mall REIT stocks have a 0.86 to 0.96 correlation with the S&P Retail index over this time period. How is this information useful to investors? Well, for one, it shows how owning stocks in both sectors reduces diversification. It also suggests that investors can develop long/short trading strategies by using stocks and exchange-traded funds to hedge against losses. Soaring Office Rents Across the U.S. Jennifer Forsyth, WSJ 7-05 Office rents are skyrocketing across the nation, driving up costs for businesses large and small, thanks to a dearth of space in some major markets and a new breed of deep-pocketed landlords who can afford to hold out for premium tenants. Nationwide, effective rents on office properties -- the amount tenants pay after concessions -- jumped an average of 3.1% during Q2-07, up from gains of 2.8% in Q1-07 and 2.1% in Q2-06, according to a report by Reis Inc. That was the sharpest quarterly increase since Q3-00, before the combined effects of the technology-stock bust and the Sept. 11, 2001, terrorist attacks caused office vacancies to rise and rental rates to fall. In some cities, today's higher rents reflect strong economic fundamentals. In New York and Washington, fatter corporate profits are spurring companies to step up hiring, fueling demand for additional space at a time when supply is tight. Vacancy rates in some of these markets have fallen to single digits, in part because high land prices and strict zoning requirements have kept a lid on construction of new office buildings. In other markets, such as Boston and San Francisco, rising rents are the byproduct of a deal-making frenzy that has left large numbers of office buildings in the hands of nontraditional landlords such as private-equity firm Blackstone Group LP and investment bank Morgan Stanley. In the past two years, investors, aided by cheap debt and ample supplies of capital, have aggressively bid up the prices of office properties. Real-estate brokers say these new landlords are taking a harder line in lease negotiations, seeking to push rents high enough to offset the lofty sums they paid for their properties. Meanwhile, demand for office space has been growing. Net absorption increased markedly during the latest quarter, a sign that the economy is producing more office jobs, says Sam Chandan, chief economist for Reis. Nationwide, the office-vacancy rate, at 12.7%, is the lowest since Q3-01. In some cities on the nation's East and West Coasts, office rents are rising far more rapidly than the national average. Landlords were able to push effective rents in Manhattan up 7.8% overall during the second quarter, with rent increases for trophy properties reaching into the double digits. All three main office markets -- Manhattan's midtown, "midtown south" and downtown, which includes Wall Street -- have rock-bottom vacancy rates, though downtown rents are considerably cheaper than in midtown. In the strongest markets, which include Seattle and west Los Angeles as well as New York and Washington, fewer new office buildings are being built these days than during previous peaks in the commercial real-estate market. That is because of both high construction costs and a condominium boom that has gobbled up building sites. In these markets, companies will have to pay higher rates or settle for less desirable locations. "I think there will be a lot of soul-searching," says Susan Pepper, a Washington-based senior vice president for Grubb & Ellis, a real-estate services firm. More Office Stats J.W. Elphinstone, AP 7-05 Over the last year to year-and-a-half, rent growth has really accelerated as well as declines in vacancy rates," said Reis Inc. Chief Economist Sam Chandan. He said that effective office rents -- the amount tenants pay after concessions -- leaped 3.1 percent in the second quarter, the largest gain since the third quarter of 2000. The full report from Reis is expected to be released later Thursday. The cities with the top rent growth were New York, San Francisco, Seattle and San Jose, Calif. Office rents in New York -- the largest office market in the U.S. -- surged 7.8 percent in the second quarter and 26.6 percent over the past 12 months. If the Big Apple is removed from the national statistics, office rents nationwide would have risen only 2.2 percent. New York posted the lowest vacancy of 6.6 percent, well below the national average, followed by Washington, D.C., with a 6.7 percent vacancy rate. The nation's capital experienced rent growth of 12.6 percent in the second quarter. Chandan said that a lack of new construction in the last few years has helped to shrink vacancy and give landlords leverage to push rents up. Last year, 45 million square feet of office space was completed, nearly a third of the 138 million square feet that was completed in 1999. Some cities didn't fare as well, Chandan said, noting the biggest rent gains and vacancy declines came from coastal cities. Office rents in Pittsburgh and Detroit both slipped 0.6% in Q1. More Office Stats Ilaina Jonas, Reuters 7-05 The U.S. office vacancy rate in the second quarter fell to its lowest level in nearly six years reflecting a paucity of property, real estate research firm Reis Inc. said on Thursday. Despite an additional 11.9 million square feet of new office space added to the market, the second-quarter U.S. vacancy rate fell to 12.7 percent from 13.1 percent in the first quarter, Reis said. It was the lowest rate seen since the third quarter of 2001. Tenants leased more than 17 million square feet of space, up from 10.4 million square feet in the first quarter. So far, the amount of new office space created this year has been less than half of the 45 million built in 2006. The amount new office space created is meager compared with the 114 million of additional square feet developed in 1999 and 112 million in 2000, according to Reis. The U.S. effective rental rate -- rent paid less concessions -- rose 3.1 percent in the second quarter to $23.61 per square foot the report said. "In the largest metros and key metros, rent growth is clearly very strong," Sam Chandan, Reis chief economist, told Reuters. "For most of the country, the market doesn't look as robust." Of the 79 markets Reis tracks, New York saw the strongest effective rent growth, surging 7.8% to an average of $51.48 per square foot. San Francisco followed, with average effective rents up 6.3% to $32.46 and Seattle, Washington, also up 6.3% to $24.98. Washington D.C. saw the second-highest effective rent of $41.27, up 3.5%. According to CB Richard Ellis Group, Manhattan maintained its prior month vacancy of 4.4% in June 2007. That was down from 6.3% in June 2006. Meanwhile, asking rents rose to $63.56 per square foot in June 2007 from $61.52 per square foot in May and $47.30 per square foot in June 2006. The figures bode well for office companies such as Vornado Realty Trust, Boston Properties, and SL Green, whose properties are concentrated in key U.S. markets. Dayton, Ohio saw the most severe decline in rents, down 0.9% to $11.89 per square foot. The lowest vacancy rates were seen in New York, the largest U.S. office market, which clocked in at 6.6% in Q2, down from 7% in Q1. Washington D.C. saw its vacancy rate dip to 6.7% from 6.8%. Miami, which came in with the third-lowest U.S. vacancy rate, saw its rate rise to 8.2% from 7.9% in Q1, Reis said. Detroit had the highest Q2 vacancy rate, although it improved slightly to 21.5% from 21.8% in Q1. The most improved market in the quarter was Albuquerque, New Mexico, which saw office vacancy decline to 11.2% from 12.7%. Dayton saw its vacancy rate expand the most, up to 19.5% from 17.1% in Q1. LRY Announces Acquisition of RPB PRNewswire 7-24 Liberty Property Trust and Republic Property Trust announced that they have entered into a definitive agreement pursuant to which Liberty will acquire Republic for $14.70 per fully diluted share and unit in cash and will assume debt, which was approximately $415 million as of March 31, 2007. Total consideration is approximately $900 million. The Republic portfolio consists of 13 operating properties consisting of 24 office buildings and one redevelopment property. On 7-17 AMB reported Q2-07 FFO of $78.474 million [$0.74/share] compared to $82.355 million [$0.87/share] in Q2-06. The Q2-07 include $0.27 per share of development profits, as compared to $0.48 per share in Q2-06. Cash-basis SSNOI in Q2-07 increased 5.8% over Q2-06. On 7-24 EGP reported Q2-07 FFO of $17.494 Million [$0.74/share] compared to $15.240 million [$0.69/share] in Q2-06. Same property NOI growth was 3.5%, or 5.2% before straight-line rent adjustments. EGP has 17 development projects with projected costs of $132 million under construction or in lease-up at the end of Q2-07. On 7-24 FR reported Q2-07 FFO of $59.568 million [$1.17/share] compared to $56.905 million [$1.12/share] in Q2-06. FR had 6.3% growth in SSNOI on a cash basis. Excluding lease termination fees, cash basis SSNOI increased 4.1%. There was a 3.5% increase in rental rates in Q2-07. On 7-25 FPO reported Q2-07 FFO of $10.4 million [$0.42/share] compared with $8.4 million [$0.39/share] in Q2-06. While total NOI grew to $21.692 million from $18.662 million in Q2-06, SSNOI on a cash basis was $17.552 million compared to $ 17.726 million in Q2-06. This was a fall of 3.3% on an 'accrual basis' and a fall of 1.0% on a 'cash basis'. Rental rates per square foot increase 20% and 9% on a GAAP basis for new and renewal leases in Q2-07, respectively. On 7-23 LRY reported Q2-07 FFO of $72.846 million [$0.79/share] compared to $72.197 million [$0.80/share] for Q2-06. Operating results for Q2-07 include lease termination fees of $0.6 million [$0.01/share] and preferred unit redemption costs of $0.7 million [$0.01/share]. Same Store income increased by 3.1% on a cash basis and by 2.2% on a straight line basis for Q2-07 compared to Q2-06. During the second quarter, Liberty began development of four properties totaling 269,000 square feet, with an expected total investment of $34.7 million. On 7-26 PLD reported Q2-07 FFO of $309.905 million [$1.16/share] compared to $229.262 million [$0.90/share] in Q2-06. PLD increased SSNOI in Q2-07 by 6.2% (a 6.9% increase when straight-lined rents and lease amortization are excluded), driven by 3.2% growth in average same-store occupancies and same-store rent growth of 8.3%. On 8-02 ARE reported Q2-07 FFO of $41.607 million [$1.42/share] compared to $29.227 million [$1.26/share] in Q2-06. Q2-07 GAAP Same Property Revenues less Operating Expenses were up 4.2%. ARE executed a total of 38 leases for approximately 335,000 sq-ft of space at 28 different properties. Approximately 151,000 sq-ft related to new or renewal leases were for previously leased space. Rental rates for these new or renewal leases [$34.05/sq-ft] on these 12 properties were on average approximately 5.5% higher on a GAAP basis (and 3.3% on a cash basis) than rental rates for expiring leases. Approximately 184,000 sq ft for 26 properties were redeveloped, developed or previously vacant space and leased at rates of $36.38/sq ft. On 7-25 BDN reported Q2-07 FFO of $59.0 million [$0.65/share] compared to $57.0 million [$0.60/share] in Q2-06. Q2-07 included a $3.8 million gain on the dissolution of a real estate partnership. SSNOI in Q2-07 was $84.356 million compared to $82.685 million in Q2-06, an increased of 2.0% on a GAAP basis and 2.5% on a cash basis in Q2-07. Q2-07 core portfolio retention rate was 85.5% with positive net absorption of 181,656 sq-ft. BDN achieved a 7.2% increase on new lease rental rates and a 1.4% increase on renewal rental rates. On 8-06 BMR reported Q2-07 FFO of $33.8 million [$0.50/share] compared to $22.3 million [$0.41/share] in Q2-06. Consolidated net operating income in Q2-07 was $50.006 million compared to $34.707 million in Q2-06. SSNOI in Q2-07 was $29.426 million compared to $29.587 million in Q2-06 - a decrease of 0.5%, but SSNOI including non-recurring items was $32.311 million compared to $29.648 million in Q2-06 - an increase of 9.0%. BMR's weighted average remaining lease term is 7.8 years with current annualized rents per sq-ft of $34.97 compared to rents at the expiration of the contract at $48.44. Leased Square Feet as of 12-31-06 was 6,280,648 at an average rate of $29.31/sq-ft. Leased Square Feet as 6-30-07 was 6,571,179 at an average rate of $30.02/sq-ft. [I did not find the typical data on lease spreads for BMR.] BMR has construction in progress on 5 properties totaling 1,661,000 sq-ft that are 50.6% pre-leased. At the end of Q2-07 BMR's Debt / Total assets ratio was 45.3% and the Debt / Total capitalization ratio was 40.2%. BMR's Interest coverage with capitalized interest was 2.3x. BMR's Fixed charge coverage with capitalized interest was 1.8x. On 7-24 BXP reported Q2-07 FFO of $142.9 million [$1.18/share] compared to $129.4 million [$1.10/share] in Q2-06. Same Property Net Operating Income on a cash basis grew 6.5% on BXP 95 office buildings; fell 9.6% on BXP's 18 Office/Technical Buildings; rose 2.9% on BXP's one hotel, giving BXP total SSNOI growth of 5.7%. The increase in 2nd generation net rents [my best attempt at getting a lease spread number] was 16.51%. On 8-02 CLI reported Q2-07 FFO of $73.2 million [$0.88/share] versus $74.4 million [$0.95/share] for Q2-06. CLI has Q2-07 SSNOI of $100.466 million compared to $97.326 million in Q2-07, a 3.2% increase on a cash basis but no increase on a GAAP basis when rents are straightlined. Tenant Retention on expiring leases was 59.2%. During Q2-07 CLI executed 135 leases on 1,070,555 sq-ft of space of which 380,951 sq-ft was for new leases and 689,604 sq-ft was for renewed space at an average rate of $24.09/sq-ft. Office property made up 102 of these trasaction at 759,269 sq-ft with an average rate of $28.11/sq-ft. Since CLI did not give info on lease spreads, for purposes of comparison, the average annual rent on office space with leases expiring in 2007 is $24.75/sq-ft. CLI had total indebtedness of approximately $2.1 billion, with a weighted average annual interest rate of 6.13%. CLI had a debt-to-undepreciated assets ratio of 38.2%, total debt to total market capitalization of 36.38%, total debt to total book ratio of 45.10%, and an interest coverage ratio of 3.3 times for Q2-06 ending. CLI had a senior debt rating of BBB from S&P and Fitch and Baa2 from Moody’s. On 7-25 DRE reported Q2-07 FFO of $93.479 million [$0.63/share] compared to $86.542 million [$0.58/share] in Q2-06. SSNOI increased 3.2% over Q2-06. Duke renewed 85% of leases up for renewal, totaling 3.7 million sq ft, on which net effective rents increased 3.7%. DRE's value creation pipeline totaled $1.6 billion, including $622 million of developments with an expected stabilized return of 9.4% that Duke plans to own indefinitely after completion; $828 million of developments with an expected stabilized return of 8.5% that DRE plans to sell within approximately one year of completion; and a $141 million backlog of third-party construction volume with a 19.2% fee. DRE's interest and fixed-charge coverage ratios in Q2-07 were 3.6 and 2.2, respectively, and its debt-to-total market capitalization ratio was 40.2% at 6-30-07. On 8-01 HIW reported Q2-07 FFO of $35.6 million [$0.58/share] compared to $32.5 million [$0.54/share] in Q2-06. Excluding a $1.4 million, or $0.02 per diluted share, non-cash charge for the redemption of $40 million of 8% preferred stock on May 29, 2007, FFO would have been $0.60 per diluted share. SSNOI from continuing operations, which includes straight line rent and term fees, for Q2-07 increased 1.2% from Q2-06. Excluding straight line rent and term fees, SSNOI from continuing operations increased 2.3% from Q2-06. Second generation leasing activity in HIW's portfolio was 1.45 million sq-ft, including 866,000 sq ft of office space, 575,000 sq-ft of industrial space and 15,000 sq-ft of retail space. 152,000 sq-ft of first generation space was also signed. Straight-line (GAAP) rental rates for the 166 office leases signed in Q2-07 increased 5.7% from straight line rental rates under the previous leases, while cash rents signed in Q2 declined 1.7%. Average in-place cash rental rates across HIW's portfolio increased 5.7% compared to Q2-06. Average in-place cash rental rates across HIW's office portfolio were up 6.1%. On 8-07 HRP reported Q2-07 FFO of $62.6 million [$0.29/share] compared to $62.7 million [$0.30/share] for Q2-06. [SSNOI stats were not given.] HRP's Operating income in Q2-07 was $73.918 million compared to $73.079 million - an increase of 1.1%, but HRP had 211 million shares in Q2-07 compared to 240 million shares at the end of Q2-06. HRPT signed new leases for 814,000 sq-ft and lease renewals for 1,107,000 sq-ft during Q2-07, for weighted average rental rates that were 3% above prior rents for the same space. On 7-24 KRC reported Q2-07 FFO of $26.7 million [$0.77/share] compared to $37.6 million [$1.11/share] in Q2-06. Q2-06's results included proceeds from an early lease termination totaling $9.8 million [$0.29/share]. KRC's GAAP SSNOI in Q2-07 was $47.288 million compared to $46.275 million in Q2-06 - an increase of 2.2%. KRC's Cash SSNOI in Q2-07 was $46.611 million compared to $43.621 million in Q2-06 - an increase of 6.9%. During Q2-07 KRC had 14 new leases for 147,740 sq-ft and 14 renewed leases for 288,236 sq-ft. The average GAAP based change in rents was 17.2% and cash based change was 3.9%. The retention rate on expiring leases was 60.5% [43.8% on office space and 88.7% on industrial space]. KRC currently has five projects under construction that encompass eight buildings totaling approximately 1.1 million rentable square feet and are 82% pre-leased. In the aggregate, they represent a total estimated investment of approximately $359 million, of which $256 million has been spent to date. KRC has two redevelopment projects underway totaling 211,500 sq-ft which represent a total estimated incremental investment of approximately $25 million, of which $13 million has been spent to date. They are 39% pre-leased. On 7-31 MPG reported Q2-07 FFO of $(2.4) million [$(0.05)/share] and if one excluded a $33.9 million gain on sale of real estate the FFO was ($0.62/share) compared to $18.8 million [$0.41/share] in Q2-06. FFO for Q2-07 was impacted by a non-recurring $17.2 million charge from early repayment of debt primarily related to the EOP transaction. Excluding that loss on extinguishment of debt, FFO would have been $0.27/share. GAAP SSNOI in Q2-07 was $ 59.887 million compared to $ 65.837 million in Q2-06 - a decrease of 9.0%. After the EOP transaction same store properties were only 58.7% of the current total potfolio. On a cash basis, expiring rent rates per sq-ft were $19.71 compared to New / Renewed Rate per Square Foot of $23.29 - a change of 18.2%. On a GAAP basis, expiring rates per sq-ft were $18.75 compared to New / Renewed Rate per sq-ft of $25.83 - a change of 37.8%. MPG has four projects [2,659,000 sq-ft] under construction at a projected cost of $396.1 million with $234.8 million already spent. On 4-24-07 MPG purchased the EOP Portfolio of Orange County and Downtown Los Angeles featuring 24 properties and 11 development sites for $2.875 billion (together with reserves for two year's of interest, tenant improvements and commissions). On 7-31 OFC reported Q2-07 FFO of $31.8 million [$0.57/share] compared to $.49 or $25.2 million [$0.49/share] for Q2-06. SSNOI for Q2-07 was $48.419 million compared to $47.686 million in Q2-06 - an increase of 1.5%. Same property cash NOI increased by 2.9%, or $1.3 million for the quarter. During the quarter, 476,000 sq-ft was renewed, equating to a 69.3% renewal rate, at an average committed capital cost of $4.91/sq-ft. Total rent on renewed space increased 5.7% on a straight line basis and decreased 1.1% on a cash basis. For renewed and retenanted space of 612,000 sq-ft, total straight-line rent increased 6.1%, and total cash rent increased 0.5%. At the end of Q2-07 OFC has ten buildings under construction totaling 1.0 million sq-ft for a total projected cost of $211.7 million, that are 48.5% leased; Twelve buildings under development totaling 1.3 million sq-ft for a total projected cost of $265.8 million; and Three projects under redevelopment totaling 741,000 sq-ft for a total projected cost of $92.2 million. On 8-07 PSB reported Q2-07 FFO of $30.0 million [$1.03/share] compared to $25.2 million [$0.87/share] in Q2-06. Same property net operating income in Q2-07 was $40.836 million compared to $39.373 million in Q2-06 - an increase of 3.7%. On 8-06 PKY reported Q2-07 FFO of $14.8 million [$0.94/share] compared to $17.9 million [$1.23/share] for Q2-06. SSNOI in Q2-07 increased $581,000 or 2.3% more that Q2-06 on a GAAP basis. SSNOI increased $1.6 million or 6.5% on a cash basis. The increase in SSNOI is primarily attributable to an increase in same store average occupancy from 89.5% during Q2-06 to 91.4% during Q2-07. Additionally, same store rental rates increased 2.3% during the same period. During Q2-07, 70 leases were renewed or expanded on 623,000 sq-ft at an average rental rate increase of 4.3% on a cash basis and a cost of $2.79/sq-ft per year of the lease term in committed tenant improvements and leasing commissions. On 7-23 SLG reported Q2-07 FFO of $79.513 million [$1.26/share] compared to $57.194 [$1.22/share] in Q2-06. Not included in FFO were the sales of 125 Broad Street and 110 East 42nd Street for $384.5 million recognizing a gain of approximately $252.0 million, or $3.98 per share. Same-store GAAP NOI on a combined basis [including properties then owned by Reckson?] increased by 9.2% for Q2-07 when compared to Q2-06, with the wholly-owned properties increasing 14.3% to $51.1 million during Q2-07 and the joint venture properties increasing 2.0% to $31.8 million. Average starting Manhattan office rents of $52.96 per rentable square foot for Q2-07 represented a 40.5% increase over the previously fully escalated rents. Average starting Suburban office rents of $29.88 per rentable square foot for Q2-07 represented an 0.4% increase over the previously fully escalated rents. [From the conference call: One large lease had escalating rents that pushed the rate above market - and was reset or declined with the renewal. That was a one time atypical event. Financial services, legal services, accounting services, health care and entertainment pushing demand in Manhattan. Some tenant will get priced out of NYC. But SLG has the suburban market covered too, and will capture those move-outs as demand in the suburbs rises. SLG does not need to have continued high rent growth. If rent growth stopped - we would be rolling up for the next seven years due to rent roll-overs. Management was almost hyper-positive about the future.] On 7-31 VNO reported Q2-07 FFO of $151.6 million [$0.96/share] versus $148.8 million [$0.99/share] in Q2-06. There were numerous one time items distorting comparability of the two quarter's FFO. When those one time items are removed, Q2-07 FFO/share was $1.33 compared to $1.23 in Q2-06. VNO did not give SSNOI - but only same store EBITDA - and only gave that number by segment. The percentage of EBITDA by VNO segment in the first two quarters of 2007 was 28% from NCY Office, 20% from Washington DC Office, 16% from retail properties, 7% from Merchandise Marts, 4% from Temperature Controlled Logistics and 27% from ToysRUs. When Toys is factored out, the segment EBITDA looks like: 35% from NCY Office, 28% from Washington DC Office, 23% from retail properties, 9% from Merchandise Marts, 5% from Temperature Controlled Logistics NYC Office SSEBITDA was up 9.0%; DC up 5 .0%; Retail up 2.0%; Merchandise Mart down 2.5% and TCL down 0.7%. For renewal leases in VNO's NYC Office segment, prio rents = $48.77 with initial rents on a cash basis = $81.53, resulting in a 67.2% cash basis increase [63.8% GAAP]. For the Washington Office segment - prio rents = $31.83 with initial rents on a cash basis = $33.29, resulting in a 4.6% cash basis increase [4.8% GAAP]. For the retail segment - prio rents = $29.06 with initial rents on a cash basis = $35.30, resulting in a 21.5% cash basis increase [27.2% GAAP]. At the end of Q2-07 VNO had $14.3 billion in debt of which $1.7 billion was floating at an average rate of 7.12% and $12.9 billion was fixed at an average rate of 5.46% - giving the total averarage interest rate of 5.65% On 9-14 Robert W. Baird Initiated coverage of EGP at Outperform. On 9-19 Cantor Fitzgerald Initiated EGP at Buy. On 9-06 a Lehman Brothers analyst cut his rating on SL Green, citing concerns that the credit squeeze could stymie rent growth and lower property values in it's portfolio. David Harris downgraded SL Green to "Equal Weight" from "Overweight" and reduced his price target to $126 from $144, partly reflecting worries that problems in the credit markets could hurt demand from the REIT's main tenants. "While we maintain that it is premature to take a negative stance on New York City, there are reasons to believe for increased caution: reduced space demand by financial services giants could quickly take froth out of the market at a time when supply is rising," Harris wrote. The credit market woes have also shrunk the availability of credit for commercial real estate transactions. Fewer deals and a smaller pool of qualified buyers could weigh on property prices, reducing the value of SL Green's assets. Additionally, deal flow has generated "robust" cash flow for the REIT in the past, Harris said. "Should the current freeze in the credit markets persist, this route may be far more challenging for SL Green." Harris also noted that the REIT's portfolio is less diversified than its peers, Boston Properties Inc. and Vornado Realty Trust. Harris maintains an "Overweight" rating on both of those REITS. On 9-24 KeyBanc Capital Upgraded DLB from Hold to Buy because of a better-than-expected outlook on financial service firm employment and increased investment opportunities. KeyBanc analyst Jordan Sadler was worried the recent credit squeeze would lead to sizable job cuts for New York investment firms, affecting SL Green's investments in the offices they occupy, he wrote in a research note. But, based on "relatively positive comments and outlooks" from investment banks reporting earnings last week, the Federal Reserve Board's lowering of a key interest rate Sept. 18 and positive comments about New York's real estate fundamentals from the city's largest owners, Sadler upgraded SL Green to a "Buy." SL Green could also benefit from the credit squeeze to improve its earnings, Sadler wrote in the research note. "Although the recent sea change in the credit market has made underwriting trickier, lenders with capital and the stomach to put it to work in the current environment will likely achieve premium returns," Sadler wrote in the note. SL Green, along with its majority-owned subsidiary Gramercy Capital Corp., has the balance sheet availability and management to take advantage of the market, Sadler said. On 9-07 Joel Bloomer of MorningStar did a summation article on the stocks that MorningStar believed were the most over-valued. They wrote that SLG sold at a 37% premium to fair value. From the Analyst Report: "Though we like SL Green's diversification efforts, we don't think they go far enough. First, the company's newly acquired suburban portfolio is less than 15% of the total holdings. Second, tenant concentration remains high; the top 25 tenants account for a sizable 42% of total rents with the largest tenant (Viacom International) accounting for 8% of total rents. Finally, just three Manhattan buildings account for 28% of annualized rent." They wrote that AIV sold at a 49% premium to fair value. From the Analyst Report: "We believe Apartment Investment & Management's portfolio is not positioned to take full advantage of favorable trends. The company's large affordable housing division sets rent levels in concert with government agencies that may be reluctant to pass on hefty increases to tenants. Even Aimco's market-rate apartments are mostly in subprime locations and of middling quality, making it more difficult to demand premium rents." They wrote that UDR sold at a 33% premium to fair value. From the Analyst Report: "Condo sales have been a bright spot for UDR, but we think the good times are over: The first-time buyers UDR is trying to attract will likely be kept out of the market by rising mortgage rates. Slowing condo sales should boost demand for apartment rentals. Still, the decline in condo sales and the decreased likelihood that UDR can dispose of properties at expensive prices will likely make the company's restructuring process more painful." On 9-06 EGP declared a dividend of $.50/share payable on September 28, 2007 to shareholders of record of Common Stock on September 18, 2007. On 9-17 LRY increased its dividend to $0.625/share to be paid on October 15 to shareholders of record on October 1, 2007. On 9-18 FR declared a dividend of $0.71/share payable on October 15, 2007 to stockholders of record on September 28, 2007. On 9-12 BDN declared a dividend of $0.44/share, payable on October 19, 2007 to holders of record on October 5, 2007. On 9-12 CLI declared a dividend of $0.64/share to be paid on October 15, 2007 to shareholders of record as of October 3, 2007. On 9-12 KRC declared a dividend of $0.555/share payable on October 18, 2007 to stockholders of record on September 28, 2007. On 9-17 BXP declared a dividend of $0.68/share payable on October 31, 2007 to shareholders of record as of the close of business on September 28, 2007. On 9-18 MPG declared a dividend of $0.40/share payable on October 31, 2007 to stockholders of record as of September 28, 2007. On 9-19 ARE declared a dividend of $0.76/share payable on October 15, 2007 to shareholders of record on October 1, 2007. On 9-19 SLG declared a dividend of $0.70/share payable October 15, 2007 to shareholders of record on the close of business on September 28, 2007. On 9-20 OFC Incrased its dividend to $0.34/share from $0.31/share, to be paid on October 16, 2007 to shareholders of record on September 28, 2007. On 9-27 AMB declared a dividend of $0.50/share payable on October 15, 2007 to stockholders of record at the close of business on October 5, 2007. NOTE #1: This page is ment to be a supplement for those already getting monthly sector updates from another source. Data entry errors sporadically happen here. There are metrics like SSNOI growth, debt/market cap, agency ratings on debt, organic growth in process to total market cap, and other ratios that should not be ignored but are not covered here. NOTE #2: The operator of this site owns shares in AMB, OFC and VNO - and this could distort the coverage of those REITs. Home Page Previous REIT Update Top Sites |