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Brad Thomas  

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  • Bob Evans May Soon Be 'Delivering Farm Fresh' REIT Revenue
    Editors' Pick • Sep. 29, 2014 BOBE 20 Comments

    Summary

    • Last week, The Wall Street Journal reported that several REITs had expressed an interest in buying the real estate owned by Bob Evans.
    • "The company's stock price does not reflect the significant embedded value of the owned real estate." - Sandell Asset Management.
    • Sandell's arguments are solid, and while owning real estate is an important ingredient for wealth creation, the most efficient structure for Bob Evans is to explore a strategic sale/leaseback transaction.
  • The Shorts Are Winding Down But I Own Digital Realty For The Long Haul
    Editors' Pick • Sep. 29, 2014 DLR 38 Comments

    Summary

    • REITs have a much better methodology for assessing the predictability of earnings.
    • Just like any security that I’m researching, I pay close attention to the reliability of the company’s profit margins.
    • I could just walk away from Digital Realty now and wait for the next big hedge fund hiccup.
    • Forget the noise and take advantage of stocks on sale.
  • Let's Make Some REIT Hay While The Sun Is Shining
    Editors' Pick • Sep. 26, 2014 CSG, LXP, O 97 Comments

    Summary

    • “Always make hay while the sun is shining.” Farmer Ed.
    • Buying stocks when they are cheap is the best way to grow money, and stocks of good companies on sale reap the highest returns.
    • By utilizing these hard-and-fast rules, you can be just like Farmer Ed and find yourself napping each day right after lunch.
  • Remember, It Was The Great Recession, Charlie Brown
    Sep. 25, 2014 AVB, DLR, ELS 52 Comments

    Summary

    • My biggest memory of pumpkins was in the movie 'It's the Great Pumpkin, Charlie Brown'.
    • Linus truly believed that the Great Pumpkin would appear again next year, and I do too!
    • “It’s the investor’s job to intelligently beat risk for profit. Doing it well is what separates the best from the rest.” - Howard Marks.
  • Omega Healthcare Is A Blue Chip Model Of Predictability
    Editors' Pick • Sep. 24, 2014 OHI 60 Comments

    Summary

    • Due to a very weak financial profile with a majority of Omega’s operators, the company was forced to cut its dividend and preserve equity to meet its near-term debt obligations.
    • I believe that this article lays out some important attributes that make Omega Healthcare Investors a Blue-Chip REIT.
    • Some may argue that Omega needs another ten years of dividend increases before it can be labeled a “blue chip”.
    • As I sum up my definition of “blue chip” it simply means that I “sleep well at night”.
  • I Want To Buy Boardwalk For The Price Of Connecticut Avenue
    Editors' Pick • Sep. 23, 2014 FRT 20 Comments

    Summary

    • Although I’m by no means an expert at “market timing” (nor do I intend to be) the technical analysts would acknowledge that Federal Realty is not a BUY today.
    • A fundamental analysis of Federal Realty would provide a completely different picture – one in which a stock is evaluated based on past performance.
    • Boardwalk is the best property to own in Monopoly, but always negotiate.
  • What I See With This High-Paying REIT That Mr. Market Doesn't
    Editors' Pick • Sep. 22, 2014 CSG 87 Comments

    Summary

    • Chambers Street has not moved and shares are down over 19% from the original listing price of $10.00.
    • Mr. Market has his reasons for the sleepy share price appreciation but owning shares in a REIT when I’m losing capital doesn't necessarily mean I’m sleeping well at night.
    • I see the overhang in the shares primarily as a “tug of war” of sorts.
    • I see something different that Mr. Market doesn’t see and that is that I view Chambers Street as highly attractive REIT that has been overlooked, at least for now.
  • The 'Up And Coming' Blue-Chip REITs
    Sep. 19, 2014 HTA, ROIC, STAG 87 Comments

    Summary

    • My wife gets mad at me since I control my car like a race car driver would: one foot on the gas and one foot on the brake.
    • That’s kind of like Mr. Market has been with REITs – pumping the gas enough to get moving and then tapping the brakes waiting for the deer to jump out.
    • Rule #1: Never recommend a blue-chip stock for the sake of owning a blue chip.
  • How Critical Is This Hospital REIT To My Investment Portfolio?
    Editors' Pick • Sep. 18, 2014 MPW 35 Comments

    Summary

    • I adhere to a disciplined approach since I know that it takes only a few large losses to destroy my portfolio's overall performance.
    • Assume MPW was trading at the peer P/FFO multiple of 15x, then shares would be worth $17 to $18. Is there justification for the discount?
    • While MPW cut its dividend in 2009, most of my other Healthcare REITs managed to maintain and grow their dividend.
    • I believe there’s greater opportunity with the REITs that are steadily increasing their dividend payouts.
  • Get Paid While You Sleep: REITs That Pay Monthly
    Sep. 17, 2014 ARCP, ARR, CLDT 122 Comments

    Summary

    • The wonder of compounding transforms your investable money into a highly powerful income-generating tool.
    • I'm at the stage in my life where I want my cake and eat it too.
    • As some point, I will turn off the compounding button and open up the spigot of dividend income.
  • How Can You Invest In An Irreplaceable Island That Pays A 4.44% Dividend Yield?
    Editors' Pick • Sep. 15, 2014 NYRT 34 Comments

    Summary

    • Like most non-traded REITs, equity is generated in a blind pool format, so investors really don't know what they're buying.
    • NYRT and ARC New York REIT have the same external manager, and they also have many of the same officers and board members.
    • Knowing that ARC New York REIT is well on its way to becoming a replica of NYRT, is it possible that the NYRT mergers with the twin?
    • "It's hard to go wrong owning real estate on this island" - Mike Happel of NYRT.
  • Now Is The Time To Maintain A Tactical Approach To Buying Blue Chip REITs
    Sep. 15, 2014 DLR, HCN, HCP 56 Comments

    Summary

    • The secret to winning at Monopoly as in Value Investing is the same: Buy when things are cheap and focus on good companies (or properties) that reap the highest returns.
    • I’m suggesting that you should take a hard look at your portfolio and BE PREPARED to take advantage of opportunities when and if they’re presented.
    • So instead of worrying about how REITs will be affected (by rising rates), focus on fundamentals.
    • “You are neither right nor wrong because the crowd disagrees with you. You are right because the data and reasoning are right.” Benjamin Graham.
  • Mr. Market Provides Some Early Fall Color For REIT Investors
    Sep. 13, 2014 AGNC, AMG, BDN 157 Comments

    Summary

    • Yesterday Mr. Market decided that the REIT market was getting a little overheated so he decided to cast a chill on REIT shares.
    • It’s clear that interest rates have settled since a sharp upward spike in mid-2013 so rate risk may not be foremost in investors' minds.
    • "What you want is to invest in a company that's going to continue to increase its earnings by having higher occupancy levels and higher rent growth" - Brad Case.
  • 'High Cotton' For Highwoods Properties
    Editors' Pick • Sep. 10, 2014 HIW 29 Comments

    Summary

    • One of the key differentiators separating the “wheat from the chaff” with Highwoods has been the very consistent revenue stream.
    • Highwoods has demonstrated that prudent capital management and disciplined risk control deliver durable earnings results.
    • I’m recommending Highwoods (at the current price of $42.55) as I believe the margin of safety (as defined by dividend coverage) is exceptionally strong.
  • Will This Mortgage REIT Become A Dividend Raising Machine?
    Editors' Pick • Sep. 9, 2014 BXMT 34 Comments

    Summary

    • Given the continued economic recovery that we’re seeing today, I have been seriously considering another investment in the mREIT sector.
    • Economic conditions are sustaining a favorable commercial real estate market as liquidity and fundamentals in the commercial real estate sector are generally in balance.
    • I’m initiating a BUY rating on Blackstone Mortgage and I plan to begin a position within the next 30 days.
  • Why I Consider Extra Space The 'Mac-Daddy' Of Self-Storage
    Editors' Pick • Sep. 8, 2014 EXR 30 Comments

    Summary

    • I liken Extra Space to the growth engine of McDonald's back when the chain had just a few stores in the 1950's.
    • The favorable industry fundamentals make Extra Space a more attractive investment thesis.
    • I like a company that owns real estate and turns its most valuable asset (data) into dividends. That's also why I own the Mac-Daddy of Self Storage, because everyone needs EXTRA SPACE.
  • You're Not A Sucker, But We All Should Be Better Second-Level Thinkers
    Editors' Pick • Sep. 8, 2014 SIR 77 Comments

    Summary

    • My intent was to provide investors with a harbinger – or warning – that chasing yield – for the sake of yield – can be dangerous.
    • For the record, consider yourself warned, not insulted, and if anyone was offended by my use of the word “sucker,” I was not aiming the message at YOU.
    • It’s just a matter of keeping risk under control and making sure that the returns you realistically expect are worth the risk you are taking.
  • Sucker Yield REITs: Does Annaly Capital Management Qualify?
    Sep. 5, 2014 NLY 173 Comments

    Summary

    • Annaly does well in a falling rate environment, but not so well in a rising rate environment.
    • The consistency of funds available for distribution (and therefore dividends) will be adversely affected by the expected move in rates.
    • It's important to recognize that because Annaly doesn’t enjoy a highly predictable dividend history, the successful investor must advocate time and resources on understanding the more complex hedging strategies.
    • There is absolutely no margin of safety that I would accept to invest in a business model that has no relevant method of producing consistent earnings over time.
  • It's Payday: These REITs Yield At Least 5% And Grow Dividends By At Least 5%
    Sep. 4, 2014 DLR, OHI, ARCP 26 Comments

    Summary

    • It’s important to recognize that rising interest rates will further bolster the real estate recovery while strengthening underlying operating earnings.
    • I tell people, almost daily, the most important metric for me, when it comes to REIT investing, is dividend safety.
    • When you examine the two ways of getting paid to invest – capital gains and dividends – it’s natural that dividends have special appeal.
  • Why Will This New Net Lease REIT Be A Game Changer?
    Editors' Pick • Sep. 3, 2014 STOR 74 Comments

    Summary

    • Most of the Triple Net REITs are focused on credit underwriting and few of them are in the trenches looking at unit-level economics.
    • While the Triple Net industry has enormous size, STORE focuses on the highly fragmented sub-sector with few participants addressing the long-term capital needs of middle-market and larger unrated companies.
    • STORE is more of bank than a REIT. The company underwrites its investments based more on contract risk than credit risk.
  • Has Campus Crest Hit Bottom?
    Editors' Pick • Sep. 2, 2014 CCG 84 Comments

    Summary

    • Campus Crest appears to be floating at the bottom of the ocean floor.
    • The catalysts offer good upside although the dividend payout ratio is tight.
    • I’m going to start to nibble on a few shares later in the week.
  • ClubCorp Is A Consolidator That Could Add Distance To Your Game
    Sep. 2, 2014 MYCC 23 Comments

    Summary

    • "Considering that my properties come with the success ratio now referred to as “the Trump Factor,” I would say that the value is significant.” Donald Trump.
    • The purpose of this article is to provide you with an alternative to invest like Trump.
    • I believe the inexpensive ClubCorp shares could be a nice "sand wedge" for your investment portfolio.
  • The Pathway To Creating Wealth With REIT Diversification
    Editors' Pick • Aug. 29, 2014 EXR, GGP, OHI 91 Comments

    Summary

    • One key part of the diversification benefits of owning REITs has to do with the longer-term market cycles.
    • Why go home early when you can take advantage of the diversification benefits and contrasting market cycles?
    • Real estate has an average 18-year cycle so the bull markets for the real estate sector is much longer than the stock market business cycle.
  • If STAG Industrial Was A Car It Would Be A Mustang
    Editors' Pick • Aug. 28, 2014 STAG 69 Comments

    Summary

    • Triple Net REITs hold their value extremely well and because of the long-term nature of the leases, there is considerably less volatility in cash flows.
    • Although the Triple Net REITs do pay the highest dividends in the equity REIT sector, I own shares in these REITs because of the dependability of the dividend income.
    • STAG Industrial is the All-American muscle car in my REIT portfolio.
    • I’m very confident with the management team and the disciplined risk management practices that make-up the “muscle-like” investment thesis.
  • I'm Waiting Patiently For This Blue Chip REIT To Go On Sale
    Editors' Pick • Aug. 27, 2014 NNN 50 Comments

    Summary

    • It’s pain to see that Mr. Market isn’t cooperating with me – since January 1st (2014) NNN has been the best performing Triple Net REIT.
    • NNN is better positioned to successfully execute its strategy than many other Triple Net peers in a rising interest rate environment.
    • NNN is executing at ALL CYLINDERS and there are few REITs that I covet and this is one of them.
    • Finding attractive dividend-paying stocks is only one piece of the puzzle. Buying them is another piece.
  • Sucker Yield REITs: Does Whitestone Qualify?
    Editors' Pick • Aug. 26, 2014 WSR 36 Comments

    Summary

    • “A ridiculous yield combined with an inherently vulnerable business model that sends ominous signals of doom.” Josh Peters, author of The Ultimate Dividend Playbook.
    • As a true measure of protection, it’s critical that investors don’t look at the yield until analyzing the safety of the dividend.
    • This article is my first in a series called “Sucker Yield REITs” and I intend to provide a meaningful and quantitative analysis on REITs that appear to be “sucker yields”.
    • I’m not tempted by the “sucker yield”; just show me a REIT with a dividend payment that lasts like an everlasting gobstopper!
  • This REIT CEO Is The 'Real Deal' With Durable Dividend Appeal
    Editors' Pick • Aug. 25, 2014 VTR 18 Comments

    Summary

    • Within my short-list of best CEOs there is one that stands out above the rest.
    • What’s important to recognize is that Debra Cafaro was not a typical CEO when she was hired in 1999, she was somewhat of an underdog.
    • I’m not pulling any punches, Debra Cafaro is the “real deal” and she can trade jabs better than anyone else in REIT-dom.
  • I'm Glad I Have This West Coast Gem In My REIT Portfolio
    Editors' Pick • Aug. 20, 2014 ROIC 25 Comments

    Summary

    • I remember building a shopping center in a rural market around twenty years ago and I had steel in the air before signing the first lease.
    • So now you have it, I’m extraordinarily critical when it comes to Shopping Center REITs.
    • One of my biggest lessons as a real estate developer was to only invest in high-quality markets; that’s where property fundamentals are the strongest.
    • With an expanded institutional base, ROIC shares are becoming harder to pick up “on the cheap” and the high-quality asset mix is highly correlated to the current valuation premium.
  • Should An Intelligent Investor Buy This Cyber-Focused Office REIT?
       • Aug. 19, 2014 OFC 10 Comments

    Summary

    • COPT does not focus on leasing to tenants engaged in weapon system production.
    • COPT has a strategic tenant niche that provides real estate solutions serving a specialized cyber-based platform.
    • The dividend cut in 2012 was substantial, and since that time, the company has generated reduced earnings (FFO per share).
    • I can't justify an investment in this REIT without adequate protection of principal.
  • Sleep Well At Night With These 5 REIT CEOs Behind The Wheel
    Aug. 19, 2014 FRT, NNN, O 32 Comments

    Summary

    • It’s important to think like an owner, not an investor.
    • “It must never be forgotten, that a stockholder is an owner of the business and an employer of its officers.” Ben Graham.
    • “What separates the winners from the losers is how a person reacts to each new twist of fate.” Donald Trump.
    • When a company has a consistent record of paying and increasing its dividend, it prompts me to believe that the management team is committed to investors.
  • A Few REIT Lessons Targeted For Millennial Investors
    Aug. 18, 2014 HTA, O, DLR 47 Comments

    Summary

    • The common denominator for all millennials is that they have all been exposed to the most catastrophic financial event of the century – The Great Recession.
    • It was not only the millennials who were touched by the Great Recession, it was just about everyone.
    • I was not born as a value investor but after experiencing significant losses stemmed by the Great Recession, I have reincarnated as more risk-averse investor seeking one investment objective.
    • It became increasingly clear to me that I could build back my investment portfolio but I first had to tap into my God-gifted intellectual property.
  • Could New York REIT Be A Takeover Target?
    Aug. 15, 2014 NYRT 41 Comments

    Summary

    • According to sources, NYRT is paying an estimated 4.75% cap for the Twitter building and that will basically max out the credit facility.
    • Why wouldn't Empire State Trust acquire NYRT?
    • NYRT’s mastermind, Nicholas Schorsch, has shown a propensity to sell so that he can publicize a "win" and sell more non-traded shares - where his bread is really buttered.