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Brad Thomas

 
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  • This REIT Band-Aid Will Only Make The Sears Brand Fade
    Mon, Nov. 17 SHLD 30 Comments

    Summary

    • It’s funny, the four letter REIT word seems to be the “happy dance” for many companies that own real estate and struggling with liquidity.
    • If Sears is already losing money at the store level, how is the company going to become profitable by adding another expense to the bottom line?
    • The REIT idea is just another “can-kicking strategy” that will lead the company down the path of bankruptcy much faster.
    • The best REITs today drive share value by managing risk effectively – that includes balance sheet management, portfolio management, and human capital management.
  • REITWorld 2014 Recap: Agree Realty Corp. (Video)
    Fri, Nov. 14 ADC 2 Comments

    Summary

    • Agree Realty Flies Under The Radar is the only Net Lease developer on the NYSE.
    • Agree combines its acquisition and development business in a unique method in which the Michigan-based REIT generates higher than average investment spreads that in return result in higher dividends.
    • Agree’s fundamentals have improved considerably and management is dedicated to delivering steady and growing dividends.
  • REITs Are Prime-Time Players, Baby!
    Fri, Nov. 14 CSG, DLR, HCP 62 Comments

    Summary

    • Earlier this week, CNBC reported that S&P Dow Jones was considering adding Real Estate Investment Trusts (REITs) as a dedicated sector.
    • Equity REITs have never been financial companies, and should never have been included in the Financials sector.
    • As I have written in several articles on Seeking Alpha, the valuation process is entirely different for real estate companies and for financial companies.
  • REITWorld 2014 Recap: Brixmor Property Group Inc.
    Wed, Nov. 12 BRX 6 Comments

    Summary

    • By spinning off from Blackstone Group, Brixmor was able to raise around $950 million and commence operations capitalizing with assets of around $10 billion.
    • Second only to Kimco Realty in size, Brixmor forged its footprint in the REIT space with a massive portfolio of 522 shopping centers and neighborhood centers.
    • Last week at REITWorld 2014 I had an opportunity to catch up with Brixmor Property Group’s CEO, Michael A. Carroll.
  • REITWorld 2014 Recap: Healthcare Trust Of America
    Wed, Nov. 12 HTA 24 Comments

    Summary

    • I have been pleased with the performance as HTA is one of my best Health Care REITs with a total return (since January 1st) of over 30%.
    • Even during the brief time that I have owned HTA the company’s fundamentals have improved considerably; as a result, a modest dividend increase was recently announced.
    • Last week at REITWorld 2014 I had an opportunity to catch up with Healthcare Trust of America’s CEO, Scott Peters.
  • REITWorld 2014 Recap: Tanger Factory Outlets
    Tue, Nov. 11 SKT Comment!

    Summary

    • One measure of Tanger's high predictability has been its fortress balance sheet.
    • As the only “pure-play” outlet center REIT Tanger has a differentiated retail model that provides storefronts for retailers seeking low-price brand recognition aimed to attract bargain-conscious consumers.
    • Last week at the annual REITWorld conference I caught up with Tanger’s CEO, Steve Tanger.
  • REITWorld 2014 Recap: STAG Industrial
    Tue, Nov. 11 STAG 4 Comments

    Summary

    • Recently STAG recently announced a dividend increase of 2.3% increase from the current annual rate of $1.32 per share to $1.35 per share.
    • To fuel the growth STAG has utilized a conservative balance sheet.
    • Last week at the annual REITWorld conference I caught up with STAG’s CEO, Ben Butcher.
  • REITWorld 2014 Recap: Essex Property Trust
    Tue, Nov. 11 ESS Comment!

    Summary

    • Numerous studies have shown that companies that raise dividends outperform the companies that don’t pay dividends.
    • Essex Property Trust went public in June 1994 and over the course of over twenty years the apartment REIT has consistently raised its annual dividend payout.
    • A the annual REITWorld conference I caught up with Essex Property Trust’s CEO, Mike Schall.
  • Monmouth Is A Steady Eddie REIT, So Why Don't I Own It?
    Editors' Pick • Mon, Nov. 10 MNR 23 Comments

    Summary

    • STAG Industrial announced that it was boosting its common stock dividend from the current annual rate of $1.32 per share to $1.35 per share.
    • Chambers Street recently announced that the company had approved an increased monthly distribution of $0.0425 per common share.
    • Monmouth REIT shares have soared, even without a dividend increase in nine years.
  • REITWorld 2014 Recap: American Campus Communities
    Mon, Nov. 10 ACC Comment!

    Summary

    • Campus Crest has under-performed year-to-date with a share price pullback of negative 27.82%.
    • American Campus Communities leads sector occupancy consistently.
    • At REITWorld last week I had an opportunity to catch up with American Campus Communities CEO, Bill Bayless.
  • REITWorld 2014 Recap: UMH Properties, Inc.
    Sat, Nov. 8 UMH 10 Comments

    Summary

    • There’s no doubt that UMH’s 7.3% dividend yield is attractive.
    • Management at UMH has worked aggressively to increase its Funds from Operations so that it can begin to start increasing its dividend.
    • Eugene “Gene” Landy, Founder and Chairman of UMH Properties, says he and his family have "skin in the game".
  • REITWorld 2014 Recap: Physicians Realty
    Fri, Nov. 7 DOC 31 Comments

    Summary

    • Physicians Realty has returned 20.4% since I purchased shares in May 2014.
    • DOC is trading at $15.45 and the shares are moving closer to my 2014 year-end projected target of $16.00.
    • I see strong momentum to support the projected 30% growth rate in 2015.
  • REITWorld 2014 Recap: Realty Income
    Fri, Nov. 7 O 9 Comments

    Summary

    • Realty Income had another quarter with very predictable results.
    • I currently own shares in Realty Income and I am accumulating more shares.
    • While at the REITWorld conference today I interviewed the CEO, John Case.
  • REITWorld 2014 Recap: Gramercy Property Trust
    Fri, Nov. 7 GPT 6 Comments

    Summary

    • Gramercy Property Trust was my best overall REIT stock in 2013.
    • Gramercy's management team has an alignment of interest with shareholders.
    • Today I interviewed the company's CEO, Gordon Dugan.
  • REITWorld 2014 Recap: Kimco Realty
    Thu, Nov. 6 KIM 3 Comments

    Summary

    • I obtained an exclusive interview with the CEO of Kimco Realty this week at REITWorld 2014.
    • Dave Henry, CEO of Kimco, discuss Q3-14 earnings.
    • I’m happy with the 30% total return YTD – beating the S&P 500 that grew by 12.3% during the same period.
  • Lesson Learned: Focus On Quality, Not Quantity
    Tue, Nov. 4 VTR, EXR, O 15 Comments

    Summary

    • Success must be driven by an alignment of interest with all parties: buyers, sellers, and investors.
    • The market cap of the industry has grown by more than 21% per year for nearly 24 years since the beginning of the Modern REIT Era.
    • “Follow the root”. That’s what my mother always told me when trying to get a question answered.
  • Omega's Merger With Aviv Is A Marriage Built To Last
    Mon, Nov. 3 AVIV, OHI 32 Comments

    Summary

    • On Friday, I was excited to hear the news that Omega Healthcare was accelerating its footprint by combining (merging) with Aviv REIT.
    • The combined companies will have the largest concentration of SNF properties, and will be the only "pure-play" SNF REIT.
    • Given the proposed strategic merger plans with Omega and Aviv, I will now be able to overweight Omega, and that's terrific!
  • Taubman Centers Creates Value The Old Fashion Way
    Editors' Pick • Mon, Nov. 3 TCO 5 Comments

    Summary

    • The clock is ticking for Taubman as it relates to its 1031 exchange opportunity and while I would hope to see the equity deferred, I’m not expecting it to happen.
    • Development is a risky business and those with weaker stomachs should probably consider a more defensive REIT.
    • Taubman is one of the few REITs that can mitigate development risk and allow me to “sleep well at night”.
  • Lesson Learned: I Was The Sucker
    Fri, Oct. 31 ARCP 402 Comments

    Summary

    • When I purchased shares in ARCP last year, I was truly hoping to own this REIT for the long haul.
    • Let’s face it, ARCP has a crisis on its hands.
    • The author liquidated all ARCP shares at $9.57.
  • More Than A Ray Of Hope For Sun Communities
       • Tue, Oct. 28 SUI 10 Comments

    Summary

    • It would seem opportunistic for Berkshire Hathaway to invest in Sun Communities, since the Oracle from Omaha already owns Clayton Homes.
    • By owning a scaleable Manufactured Housing REIT, it would seem logical that Buffett's crown jewel could extend its moat by vertically integrating the Clayton brand.
    • By maintaining an adequate margin of safety, I see more than a ray of hope for Sun Communities. I see a durable REIT that should outperform.
  • Pebblebrook Hotel Trust Is Not A Bargain, What About Chatham?
    Tue, Oct. 28 PEB, CLDT 7 Comments

    Summary

    • Pebblebrook is not trading at a bargain price today and as a result, the company has the most expensive P/FFO multiples in the Hotel sector.
    • It’s obvious that Mr. Market sees the same quality in Pebblebrook that I see…that means I must wait for a pullback.
    • I like Chatham’s strategy of focusing on premium brand select service hotels. I will have a lot better chance of success if I wait for a revised entry target of $22.50.
  • Ventas Is Continuing To Build A Powerful Brand Of Dividend Repeatability
    Editors' Pick • Mon, Oct. 27 VTR 42 Comments

    Summary

    • "The Ventas brand is a business-to-business brand." - Debra Cafaro, CEO of Ventas, Inc.
    • "Your premium brand had better be delivering something special, or it's not going to get the business." - Warren Buffett.
    • "It is the consistency in the products that creates consistency in a company's profits. Consistency and durability are attributes for competitive advantage." - Benjamin Graham.
  • The Inside Scoop On Corporate Property Trust
    Fri, Oct. 24 OFC 15 Comments

    Summary

    • "We have proven office park locations and developable land that serve four of the top five U.S. defense installations." Roger Waesche.
    • "We manage the risk associated with development so vigorously, and continually look for opportunities to improve our balance sheet is to ensure the safety of our dividend." Roger Waesche.
    • "We provide mission critical locations out of which they and supporting defense contractors operate." Roger Waesche.
  • Mr. Buffett: Why Don't You Invest In REITs?
    Fri, Oct. 24 AXP, IBM, KO 84 Comments

    Summary

    • I often hear you acknowledging the fact that your companies generate premium valuations due to vetted “hands on” senior management.
    • It seems reasonable to assume that Berkshire Hathaway should populate its portfolio with assets that yield returns with sufficiently differentiated attributes from other investments.
    • Comparing the long-term performance with large-caps, small caps, foreign stocks, bonds, and commodities it's plain to see that REITs deserve a value place setting in any intelligent portfolio.
    • Although Berkshire Hathaway has maintained an impressive track record even without distributing dividends, academic research shows that most companies tend to squander free cash flow, often through ill-advised acquisitions.
  • Is American Realty Capital Properties A 'Sucker Yield' Bet?
    Editors' Pick • Thu, Oct. 23 ARCP 377 Comments

    Summary

    • My biggest concern with ARCP has to do with the unusually high yield that also signals that the dividend could be in danger of being reduced.
    • Companies that fall under the "sucker-yield" definition typically have unpredictable and unreliable earnings histories with unsafe dividend payouts.
    • I will not be suckered into a trap where my principal is not safe.
  • Building A REIT Portfolio For A High School Kid
    Wed, Oct. 22 CBL, CSG, EXL 68 Comments

    Summary

    • Recently I sat down with my high school daughter to explain the concept of investing.
    • The good thing for my high schooler is that time is on her side and she has plenty of years to watch her nest egg grow.
    • “Keeping up with the Joneses” is an easy temptation to fall into. - Neale Godfrey.
    • A friend of mine used to call the world we live in today “the King-dom of Thing-dom".
  • Another Boring Dividend Increase For Omega Healthcare Investors
    Tue, Oct. 21 OHI 45 Comments

    Summary

    • "The safest dividend is the one’s that’s just been raised.” Josh Peters.
    • The very predictable dividend increases tell me that management is committed to maintain and increase the dividend.
    • The moral to this story is to wait patiently and invest in value stocks much like you would for crops.
    • Thanks to Mr. Market, the sun is shining down on Omega Healthcare Investors offering me a stress-free life of value investing.
  • Healthcare Trust Of America Is A Valuable Player On My All-Star Team
    Mon, Oct. 20 HTA 21 Comments

    Summary

    • "Real estate investors in the healthcare sector are typically looking for a combination of solid, defensive current income and the opportunity for steady cash flow growth." Scott Peters.
    • "We are in a great position for the current markets where values are increasing at a rapid pace." Scott Peters.
    • For a Long investor (like me) I see no reason to Sell and I will continue to accumulate shares in periods of market weakness.
  • Lexington Realty Trust: Patience Is A Virtue
    Editors' Pick • Mon, Oct. 20 LXP 58 Comments

    Summary

    • Loss, as defined by Howard Marks (in his book, The Most Important Thing), is what happens when risk and adversity collide.
    • After examining the catalysts for Lexington, I consider the shares to be trading at a moderate discount.
    • My “top pick” for 2014 has not performed but as I said at the outset, I really haven’t lost yet.
    • There are a number of catalysts in place (for Lexington) that should move the needle and the dividend appears to be safe and growing.
  • A Textbook Model Of Dividend Predictability
    Editors' Pick • Sat, Oct. 18 O 109 Comments

    Summary

    • It stands to reason that a value investor should examine any potential investment based upon ALL metrics, especially the methods that are the most meaningful for dividend investors.
    • The simplest model for valuing equity is the dividend discount model - the value of a stock is the present value of expected dividends on it.
    • Realty Income's stock valuation is tailor made for the DDM and perhaps may even be a "conservative" way to value the stock.
  • Cracker Barrel Is A Cash Cow, Here's How To Milk It
    Editors' Pick • Tue, Oct. 14 CBRL 46 Comments

    Summary

    • Cracker Barrel operates 633 stores and of that the company owns the land and buildings for 417 stores.
    • Considering that Cracker Barrel owns a significant amount of real estate it seems logical that the company could improve its overall efficiency (capital structure) by unlocking real estate value.
    • It would seem reasonable that a value investor would recognize the wealth that could be created by spinning the real estate into a REIT structure.
  • It's Not Rocket Science: BioMed Is A Buy
    Editors' Pick • Tue, Oct. 14 BMR 25 Comments

    Summary

    • Today, the world is on edge with the Ebola virus disease in which 8,376 suspected cases resulting in the deaths of 4,024 have been reported (source: Wikipedia).
    • I don’t think that Mr. Market is giving the company adequate credit for its improved balance sheet and continued diversification efforts.
    • Given the strong macroeconomic environment in the pharmaceutical sector, BioMed appears to be trading at a cheap valuation.