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Brad Thomas  

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  • 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.
  • I'm Staying On The Gramercy Property Trust Train
    Editors' Pick • Aug. 14, 2014 GPT 10 Comments

    Summary

    • Since my initial investment my total return in Gramercy is over 55% (since September 3, 2013).
    • In order for Gramercy to “move the needle” it must continue to feed the engine with accretive high-quality net lease investments.
    • So unlike the majority of Gramercy’s peer group, the majority of total return for this security is derived from capital appreciation.
    • It’s clear that Gramercy has had a nice run but based upon the trends unfolding I see more potential.
  • A Few Net Lease REITs To Avoid
    Editors' Pick • Aug. 13, 2014 GPT, SIR, OLP 48 Comments

    Summary

    • It’s important however that investors shouldn’t paint all Net Lease REITs by the same brush, that is, be careful not to purchase a Net Lease REIT without ample due diligence.
    • While I consider the O, NNN, and WPC to be high-quality REITs worthy for most any investor portfolio, the best time to purchase these stocks is when on sale.
    • Most other investors are preoccupied with how much money they can make and not at all with how much they may lose.
  • Here's A Cool Way To Soak Up The Dividends With This Net Lease REIT
    Editors' Pick • Aug. 12, 2014 EPR 36 Comments

    Summary

    • Unlike Windstream who has proposed to convert to a REIT by entering into long-term telephone line leases, EPR Properties has a uniquely-positioned business model that requires knowledge.
    • EPR does not contend directly with most Triple Net REITs and as a result, the company has been able to source new investments with less competition.
    • The 6.29% dividend yield represents an extremely attractive opportunity for yield-hungry investors in today's low interest rate environment.
    • I like EPR’s uniquely-positioned net lease platform and it’s clear that the management team has done an outstanding job recovering from the dividend cut a few years ago.
  • Nobody Does It Better Than Kimco, I Feel Sad For The Rest
    Editors' Pick • Aug. 11, 2014 KIM 21 Comments

    Summary

    • Beyond the desire to have vetted and trusted management working for me, I’m also interested to own a security that assures uniquely-positioned value.
    • In an internet/e-commerce world, I also strongly believe the neighborhood shopping centers will continue to perform well because they are all about essential goods and services.
    • All of the cylinders are clicking for Kimco – leasing spreads up 9.7%, small shop occupancy up 200 bps, and steady acquisitions and pruning.
  • iREIT TV: Avoid the 3 Ts; Nothing But Net-Lease
    Aug. 11, 2014 ARCP, CSG, NLY 10 Comments

    Summary

    • Scroll down to watch this YouTube video featuring veteran Net Lease REIT CEO, Chris Volk.
    • Superior risk-adjusted returns drove investors to well-tenanted net lease assets during the Great Recession.
    • The Triple Net REIT sector is exploding as evidenced by the number of non-listed and publicly-listed entrants including American Realty Capital Properties, Chambers Street Group, and even Annaly Capital.
  • REIT Conversions Offer Valuable Clues As To The Strength Of This Bedrock Asset Class
    Aug. 7, 2014 ARCP, OUT, CORR 26 Comments

    Summary

    • From its beginning, the REIT approach to real estate investment established by Congress contemplated land and the improvements on it.
    • Everything that we’ve been seeing over the last 50+ years, including a fiber-optic cable network, fits in the definition that Congress laid out in 1960.
    • What has changed is that investors who thought REITs were sleepy have realized that they’ve provided stronger returns than other investments for a long, long time.
    • There are more than 200 publicly traded REITs, and the majority of them have come from IPOs of companies that were privately held.
  • IREIT TV: An Exclusive Interview With ARCP's David Kay
    Aug. 6, 2014 ARCP 31 Comments

    Summary

    • Scroll down to watch this 10 minute video with David Kay, President (and CEO-elect) of ARCP.
    • I’ll be brutally honest; it took guts for me to buy shares in ARCP after an onslaught of significant transactions that began to spook Mr. Market.
    • So, the decision I made on June 13th to buy ARCP was a good wager.
    • I bought in at $11.95 and the dividend yield was almost 8.4%.
  • iREIT TV: Exclusive Interview With CEO Of Healthcare Trust Of America
    Aug. 5, 2014 HTA 6 Comments

    Summary

    • Check out this exclusive iREIT TV interview with the CEO of Healthcare Trust of America's CEO, Scott Peters.
    • Since HTA only owns medical office buildings, the investment proposition offers defensive attributes including a growing physician healthcare provider group seeking to locate at or near hospital systems.
    • I was hoping for more than a 1% increase, but at least the dividend is headed in the right direction.
  • Show Me The Money: The Perils Of REIT ETF Investing
    Aug. 4, 2014 ARCP, DLR, O 77 Comments

    Summary

    • An unstated, though fundamental, element to purchasing many of the widely held equity index ETFs: Buying the good, the mediocre and the bad equities.
    • Peter Lynch, one of the greatest investors of all time, calls this "di-worse-ification.".
    • The investment relationship with ETFs is complicated. Investors shouldn’t get lulled into accepting consistent, slight underperformance, because of a desire to avoid large deviations from index returns.
    • I can’t provide you with specific details because I owe my dedicated subscribers the content; however, I can tell you that my tactically-weighted portfolio has returned over 21% year-to-date.
  • Pebblebrook Hotel Trust - A Luxury Brand To Consider
    Editors' Pick • Aug. 4, 2014 PEB 19 Comments

    Summary

    • In other words, the word luxury is synonymous with the Trump brand and if I did not know any better, I would have thought that Donald Trump created it.
    • When it comes to luxury-based products, loyal patrons will buy beyond traditional purchases, almost immune to price – kind of the complete opposite of a value investor, eh?
    • Although the P/FFO multiple denotes opulence, the durable growth prospects and strong balance sheet provide comfort with the contemplated entry price.
    • There are just a handful of REITs that I would consider buying with P/FFO multiples above 18x and Pebblebrook is one of them.
  • Digital Realty Has A Powerful Moat Of Dividend Repeatability
    Editors' Pick • Jul. 31, 2014 DLR 55 Comments

    Summary

    • Although Mr. Market oftentimes ignores the true long-term profits that are the basis for a wide moat, he eventually becomes more rational in nature and provides a more accurate representation.
    • A wide moat business, purchased at the right price, is the ultimate “sleep well at night” investment, and I recognized that opportunity in December 2013.
    • "This mutual attraction and our interconnected global portfolio essentially act as a wide moat that is extremely difficult for competitors to replicate." - Bill Stein of Digital Realty.
  • I'm Happy To See This Healthcare REIT Spreading The Love
    Jul. 30, 2014 HTA 24 Comments

    Summary

    • Today, HTA’s board of directors sent me an early Valentine’s Day gift by declaring a cash dividend for the third quarter of $0.145 per share.
    • Although I was hoping to see a more substantial boost, the recent dividend news gives me a better feeling that management at HTA is committed to shareholders.
    • My latest purchase was on December 3, 2014 and my total return is up 24%.
  • Will The Lobster Deal Be A Tipping Point For This Net Lease REIT?
    Jul. 30, 2014 ARCP 39 Comments

    Summary

    • "In the end, Tipping Points are a reaffirmation of the potential for change and the power of intelligent action. - Malcolm Gladwell, The Tipping Point.
    • "The name given to that one dramatic moment in an epidemic when everything can change all at once is the Tipping Point." - Gladwell, The Tipping Point.
    • I believe the Red Lobster deal is a "tipping point" for ARCP and with over $2 trillion of opportunities in the highly fragmented Net Lease sector.
  • The Day I Was Surrounded By Market Timers
    Jul. 29, 2014 HCP, O, OHI 50 Comments

    Summary

    • As soon as the first stock chart went on the screen I knew that I was not in Kansas anymore.
    • To put it bluntly, I was witnessing a form of gambling in which there was no valuation analysis whatsoever – just plain and simple speculation.
    • Many ordinary investors all too often act on inflection sentiments when they buy and sell stocks, always looking for instant gratification.
  • Be Prepared For Mid-Year REIT Results, Part 3
    Jul. 28, 2014 DOC, GPT, HCT 11 Comments

    Summary

    • I currently own 19 REIT securities and in this third edition, I will provide the final forecast that includes 5 of the REITs that I own.
    • Maybe Gramercy (GPT) won’t be Babe Ruth (714 HR’s) in 2014 but I’ll settle for Sammy Sosa (609 HR’s).
    • It takes only a few large losses to decimate overall investment performance, even if many other investments prove successful.
  • Can Red Lobster Claw Back Its Once Loyal Customers?
    Editors' Pick • Jul. 28, 2014 ARCP 101 Comments

    Summary

    • Over the century brands have become less about trust and more about certainty, instead becoming advertising catchphrases designed to appeal to customers.
    • People often seek out the closest Starbucks location in a cult-like ritual where the brands trademark is only recognizable by a text-less logo of the mythological Norse Queen.
    • It’s clear that there are lessons learned from the Starbucks transformation and hopefully Golden Gate and Red Lobster can learn from the coffee king.
    • Red Lobster has an uphill battle and the key to predicting the success of the fading brand is to claw back loyal customers.