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Brad Thomas

 
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  • Taubman Is A REIT Brand I Can Trust
    Editors' Pick • Tue, Jul. 8 TCO 8 Comments

    Summary

    • As I saw the “margin of safety” moving my way I pounced on the shares of my only Mall-based REIT at a price of $64.29.
    • I bought shares in Taubman because of its “Rolex-like” track record of dividend performance.
    • For Mall REITs, it comes down to “survival of the fittest” and the key ingredient for that measurement is demographics.
    • With around $450 million of cash to deploy, Taubman could lever up easily and take down a $1 billion whale with no problem.
    • My decision to invest in this luxury-branded REIT had more to do with trusting management than trusting Mr. Market.
  • Should I Short These 3 REITs?
    Mon, Jul. 7 GRT, CLI, CCG 34 Comments

    Summary

    • Occasionally I run across a few plants (stocks) that seem to be deteriorating and, as a result, I seek to avoid the companies all together.
    • Through trial and error, I have found that it’s simply better to be in the market invested in stocks that offer the highest potential returns than play the timing game.
    • Regardless of my risk tolerance level, the short sellers haven’t stopped betting against REITs and when that feeding frenzy becomes a catalyst, the “squeeze” ensues.
    • It’s important to realize that investors who pay close attention to net profit margins have been able to predict just about every negative event.
  • Will This REIT Become The Next 'McDonald's' For Storage?
    Editors' Pick • Mon, Jul. 7 EXR 32 Comments

    Summary

    • Much like the fast food sector, there are just around two dozen self-storage operators (including the 4 self-storage REITs) that own around 7,000 facilities.
    • Because the self-storage industry is highly fragmented, the public REITs should be able to continue to consolidate and achieve efficiency with economies of scale.
    • The larger companies are taking a disproportionate share of customers that are available in the marketplace.
    • It’s time to make a move before Extra Space becomes the next "McDonald’s in self-storage."
  • Ehh, What's Up DOC?
    Wed, Jul. 2 DOC 32 Comments

    Summary

    • MLV’s research is spot-on and it’s great to see broader coverage in the “sharpshooting” health care sector.
    • I sold out of MPW for a variety of reasons, including competition (with the hospital sector) and share under-performance.
    • I support MLV’s price target of $16 as I believe that there is strong momentum to support the estimated 34% growth rate.
    • I plan to maintain my current allocation and for new investors I would wait for a pullback.
  • Is Annaly A Sleep Well At Night Investment?
    Editors' Pick • Mon, Jun. 30 NLY 71 Comments

    Summary

    • Many readers that have read my research over the years realize that my biggest issue with the mREITs is the volatility of the income stream.
    • A SWAN investor is the opposite of a market timer who thinks he or she can capture large returns by jumping in the market to make a quick profit.
    • By paying close attention to profit margins, intelligent investors can better predict the companies that could have a negative earnings impact.
  • ARCP May Have A Secret Sauce And It's Not Tartar Sauce
    Editors' Pick • Mon, Jun. 30 ARCP 59 Comments

    Summary

    • ARCP has become more like the kid in the candy store gobbling up just about everything in sight.
    • Now that ARCP is gaining significant exposure with a non-investment grade tenant, the risk for tenant default becomes much greater.
    • I’m not a seafood lover but I do see some attractive ingredients brewing with ARCP and Cole Capital could be the icing on the cake.
  • The Rockefeller REITs, The Ones That Pay Monthly
    Wed, Jun. 25 ARCP, ARR, CLDT 130 Comments

    Summary

    • In this article I’ll provide you with an updated list of 17 REITs that pay monthly.
    • Oftentimes investors overlook the frequency of the dividend payment.
    • In addition to more frequent compounding, the monthly paying companies also offer less market risk.
    • By investing in REITs that pay monthly you're able to better match fund your living expenses and create a more disciplined approach to saving and investing.
    • My classic reason to own monthly dividend stocks is for the power of compounding.
  • A Small-Cap REIT Differentiated By Risk Control
    Editors' Pick • Tue, Jun. 24 LTC 29 Comments

    Summary

    • LTC is better prepared for reimbursement risks as the company has aggregate government reimbursement exposure less than 45%.
    • LTC has just .48% in secured debt, the lowest in the peer group.
    • 86% of LTC’s debt is fixed long-term with a weighted average interest rate of 4.8%.
    • LTC is compensating much like Realty Income – I get a 5.5% dividend yield with modest growth.
  • General Growth Properties Has Plenty Of SALSA
    Editors' Pick • Mon, Jun. 23 GGP 8 Comments

    Summary

    • As I analyze Retail REITs today, I pay special attention to the companies that demonstrate the best forms of differentiation.
    • Upon closer investigation one can see that General Growth has not always enjoyed a powerful model of repeatability.
    • As the Regional Mall industry continues to consolidate, the strongest players will be the companies with the healthiest sources of differentiation.
    • The most successful REITs must be able to benefit from scale, access capital, and enjoy strong tenant relationships.
  • Simon Says, Health Care REIT Spinoff Might Be Next
    Editors' Pick • Fri, Jun. 20 HCP 21 Comments

    Summary

    • It’s true that the health care property sector remains highly fragmented; however, is it possible that at some point will growth be sacrificed by operation acumen?
    • As a prospective (or current) investor in HCP, the dividend track record is the most compelling metric.
    • I believe that (at some point) one of the large diversified REITs will merge with another.
  • The Inside Scoop On This Pure Play New York REIT
    Thu, Jun. 19 NYRT 15 Comments

    Summary

    • New York City is arguably one of the best real estate markets in the world.
    • By focusing on just this one market we think it gives us a competitive advantage and many of the deals we do are off-market or quasi-off-market.
    • Based on our estimated 2015 AFFO of $0.54 per share, the dividend of $0.46 per share represents an 85% AFFO payout ratio.
  • Silly Rabbit, Externally-Managed REIT Tricks Are For Kids
    Editors' Pick • Wed, Jun. 18 SNH 33 Comments

    Summary

    • I have often argued that the externally-managed REIT model is inherently misaligned resulting from various conflicts of interests.
    • If Ventas doesn’t acquire HCT, the miserable investor will look foolish when he finds out he lost the buyer of his Ford pickup truck.
    • Although SNH has a disadvantage in terms of its exposure with one self-dealing tenant, the company does enjoy a competitive advantage in its balance sheet execution.
    • I just can’t come to grips with investing my hard-earned capital into an externally-advised REIT.
  • These REITs Should Weather The Storm
    Tue, Jun. 17 DLR, ELS, ESS 35 Comments

    Summary

    • It's much easier to predict the future value of a REIT due to the contractual make-up of the revenue streams.
    • Most high-income investments provide only income with little or no capital appreciation, but equity REITs produce both.
    • The companies that survive will be the fittest and most durable operators that have proven to be the most consistent over time.
  • A Net Lease REIT Differentiated By Discipline
    Editors' Pick • Mon, Jun. 16 NNN 26 Comments

    Summary

    • Somewhere National Retail Properties seems to get lost in the shuffle.
    • Unlike several of the larger net lease REITs, NNN focuses exclusively on "small-box retail" and the company maintains a consistent strategy of owning relatively smaller transactions.
    • Part of NNN's differentiated net lease approach is the higher cap rates that the company generates.
    • The most recent bit of good news for NNN has been the announcement by Susser to merge with Energy Transfer Partners.
  • I Found A Nice Margin Of Safety In Omega Healthcare Investors
    Editors' Pick • Wed, Jun. 11 OHI 64 Comments

    Summary

    • Following the principles of value investing, I look for stocks that are cheap, as I know that's the most reliable way to grow my nest egg.
    • My research and instinctive greed told me that there was added security in knowing that Omega had attractive long-term characteristics.
    • The dependability of the dividend is the primary reason that I own this stock, and I'm satisfied the shares will appreciate and provide me with a long-term winner.
  • Is Monmouth Ready To Run?
    Tue, Jun. 10 MNR 81 Comments

    Summary

    • The purpose for this more recent update on Monmouth is to determine whether or not this REIT could be a candidate in my investment stable.
    • So Monmouth has plenty of spark but is this horse ready to run?
    • As acquisition velocity continues, Monmouth’s recurring income (or AFFO) should provide more clarity as to whether a dividend increase is coming.
  • Healthcare Trust Of America's Selective Acquisition Strategy Pays Dividends
    Mon, Jun. 9 HTA 14 Comments

    Summary

    • It’s clear that without leveraging the portfolio HTA has not been in a position to raise its dividend; however, by adding more high-quality revenue, I suspect that HTA will soon.
    • HTA’s latest acquisition validates my thesis and I’m satisfied that the focused health care REIT will continue to seek high-quality MOB assets that will provide meaningful earnings power.
    • HTA shares should hit $13.00 soon (and keep climbing).
  • Ventas Is A Sleep Well At Night REIT That Lays Golden Eggs
    Editors' Pick • Mon, Jun. 9 VTR 74 Comments

    Summary

    • The man was never satisfied with his daily profit so he decided to foolishly slaughter the hen in hopes that there would be a treasury inside the hen.
    • By aggregating retail investors in the non-traded REIT space, Nicholas Schorsh has built an incredible machine that incubates REITs until they are ready to go public.
    • Dividends represent the “golden eggs” whereby investors can look for valuable clues that provide insight into future performance.
    • Given the company’s low cost of capital, any new investment (by Ventas) with a cash yield of 5.5% or higher should be accretive.
  • A Brand New Mortgage REIT That May Deliver Something Special
    Editors' Pick • Fri, Jun. 6 UDF 97 Comments

    Summary

    • UDF is a mortgage REIT with a differentiated model that provides debt and equity capital solutions to leading developers and home-builders.
    • UDF provides an investment alternative to regional banks and home-builders for investors to participate in the continuing U.S. housing recovery.
    • UDF raised around $615 million utilizing the RCS Capital (Nick Schorsch platform) model and during that time the company was able to aggregate loans that averaged around 13%.
    • I intend to monitor the shares to establish an entry price at around $19.00.
  • What's The Magic That Moves ARCP?
    Editors' Pick • Wed, Jun. 4 ARCP 281 Comments

    Summary

    • Given the extraordinary pace in which ARCP has announced these transactions, it clear that the market is confused.
    • Most investors don’t see the value in Cole Capital and it seems that is one of the reasons that the market is placing a lower value on ARCP shares.
    • No smoke and mirrors, just plain old dividend magic.
  • Is CyrusOne A Serious One For My REIT Portfolio?
    Tue, Jun. 3 CONE 12 Comments

    Summary

    • In terms of ownership, data centers are particularly unique in that they are one of the few sectors within real estate that really have a diverse investor base.
    • Admittedly, my skill set is real estate, and as much as I've tried to educate myself on the ever-expanding cloud-based platform, the business model is highly complicated and seems to make me drowsy.
    • So, as the title suggests, is CyrusOne a "serious one" for my REIT portfolio?
  • Gramercy Property Trust Leaves Them All In The Dust
    Editors' Pick • Mon, Jun. 2 GPT 35 Comments

    Summary

    • In September 2013 I decided it was time to “put some skin in the game” and I purchased shares at $4.19.
    • Gramercy is not only my best REIT pick but my best stock, period.
    • After a hiatus of more than five years, GPT announced (in March 2014) that the company was resuming its dividend payment to common stockholders.
    • Gordon Dugan and his team are hitting all cylinders and with a gas tank full of capital, I expect to see continued success.
  • Is American Realty Capital Properties' 8% Dividend Yield Built To Last?
    Editors' Pick • Fri, May. 30 ARCP 261 Comments

    Summary

    • Red Lobster once enjoyed a powerful competitive advantage in the restaurant space, it seems that the brand has significantly eroded and appears to be less sustainable over time.
    • When it comes to investing, those emotional less-than-rational decisions are marketing gold. It’s those that let companies charge a premium for their products, and investors that rake in the profits.
    • I consider the latest sell-off to be a selective buying opportunity. ARCP shares closed at $12.34 with a dividend yield of 8.10%.
    • I consider the latest sell-off to be a selective buying opportunity. ARCP shares closed at $12.34 with a dividend yield of 8.10%.
  • You Can't Trump This REIT
    Editors' Pick • Tue, May. 27 FRT 65 Comments

    Summary

    • A successful brand must be unique, and it must offer a differentiated product or service to be great.
    • It’s quite clear that the way that a REIT produces powerful sources of repeatable income is in the form of dividends.
    • Durability implies that a company can take a financial punch and come back swinging. In order to do that a company must enjoy a predictable earnings stream.
    • It’s important for me to own REITs just like Trump would own towers.
  • Where's The Dividend Growth For UMH Properties?
    Editors' Pick • Mon, May. 26 UMH 25 Comments

    Summary

    • I wasn’t looking for a tortoise as I was betting that UMH would perform more like a rabbit. What could I be missing?
    • UMH management makes a strong case that there is intrinsic value in the investments that are being made and that over the long-term the value of the company could provide investors with substantial appreciation.
    • A dividend cut would be costly and I need to make sure that I don’t fall victim to the temptation of chasing a high-paying REIT that offers modest growth.
    • It’s clear that UMH is not in a position to raise its dividend and that’s one of the primary reasons that the stock has underperformed the peer group.
  • Taubman Is A Time Tested REIT Brand
    Editors' Pick • Mon, May. 26 TCO 8 Comments

    Summary

    • It’s the durability component that makes a REIT brand truly attractive and what makes the underlying value increase substantially.
    • Buying a “blue chip” on sale can be awfully rewarding and I wish I was able to scoop up a number of gems late last year.
    • Taubman is an icon of operational excellence as the mall REIT has successfully orchestrated a showcase of prudent financial management.
    • Taubman would be a complimentary addition to my portfolio; however, I need to shy away from the instant gratification game and wait on a more attractive entry point.
  • An Inside Look At The 'Smoking Hot' Retail Opportunity Investments Corporation
    Thu, May. 22 ROIC 11 Comments

    Summary

    • Check out this video interview with Stuart Tanz, CEO of Retail Opportunity Investments Corporation.
    • This REIT is as hot as a firecracker and given the CEO’s (Stuart Tanz) drive for success, I suspect ROIC will top $20 by year-end.
    • ROIC is a solid REIT that trades at sound value (P/FFO of 18.1x).
  • Tanger Is A Highly Predictable Dividend Machine
    Thu, May. 22 SKT 8 Comments

    Summary

    • As the retail industry has evolved, Tanger was the first to grasp the retail distribution channel in which goods could enjoy a longer life cycle than the traditional clearance concept.
    • Earlier this week, I caught up with Tanger's CEO, Steve Tanger, to discuss his company's first-quarter earnings and its enviable brand of dividend repeatability.
    • Ben Graham has trained me to spot a bargain and although Tanger has a bargain-based model of repeatability, the shares don't indicate there's a sale today.
  • HTA Delivers On Its Dedicated Management Model
    Mon, May. 19 HTA 30 Comments

    Summary

    • As a result of the increased asset management and leasing platform, HTA is doing a majority of leasing and negotiations directly with tenants, reducing the overall cost paid to third-parties.
    • While visiting with members of the company’s executive management team I was able to meet with Amanda Houghton, Executive VP of Asset Management.
    • As further evidence of HTA’s improving circle of competence S&P recently upgraded HTA’s investment grade credit rating to BBB, with a stable outlook.
  • Schorsch Hooks A Big Lobster
    Fri, May. 16 ARCP 332 Comments

    Summary

    • Darden has a lot of real estate on the balance sheet - around 63% of assets - and that seems to be a significant element for the fortress-like brand.
    • The only REIT that could possibly take down Red Lobster's real estate (by itself) is American Realty Capital Properties.
    • Today ARCP announced that it had entered into an approximate $1.5 billion sale-leaseback transaction for over 500 Red Lobster restaurant properties.
  • This REIT 'Had Me At Hello'
    Mon, May. 12 ROIC 33 Comments

    Summary

    • It's rare that I give a rookie REIT the thumbs up on the first date; however, as Jerry Maguire said, "you had me at hello".
    • What impressed me most about ROIC is that the company started as a “blank check” Initial Public Offering, meaning that the REIT commenced with no assets and lots of cash.
    • ROIC’s FFO on a per-share basis also increased, notwithstanding a sizable increase in the shares outstanding due to over 21 million warrants being exercised since the beginning of 2013.
    • Although not a polished jewel then, my impulse told me that ROIC was going to be a big time contender.
  • Why Does Mr. Market Fear American Realty Capital Properties?
    Editors' Pick • Fri, May. 9 ARCP 236 Comments

    Summary

    • This is no fairy tale, especially when we are dealing with real money. This is not monopoly and I have a lot riding on ARCP.
    • ARCP’s latest quarter was significant based upon the fact that the New York-based REIT has demonstrated its synergistic complexities becoming simpler.
    • Since there is no operational risk associated with single-tenant investing, much of the net lease business is more about math than science.
    • Mr. Market does not comprehend the potential for ARCP and it clearly underestimates the rewards for growth.