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Brad Thomas

 
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  • 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.
  • Solid Quarter For This Life Science REIT
    Thu, May. 8 BMR 24 Comments

    Summary

    • Capital raising was spectacular in the first quarter with more than $23 billion of biotech financing and partnering transactions, again ahead of what was a very strong 2013 level.
    • Since going public almost ten years ago (August 4, 2004), BioMed has been able to carve out a growing niche and now the company has evolved into a highly innovative landlord.
    • I moved out of all of my shares in Medical Properties Trust due to under performance and increased competition in the hospital sector.
  • WPT Industrial Is A High-Paying Canadian REIT That Pays Monthly
       • Wed, May. 7 WPTIF 19 Comments

    Summary

    • One of the reasons that WPT listed on the Canadian exchange was the fact that the company could achieve more "shelf space" in Canada than in the US.
    • Based on US standards, WPT is a highly leveraged REIT.
    • WPT is trading at cheap valuation of 9.8x Price-to-Funds from Operations (P/FFO).
  • Why Should You Maintain A Balanced Diet Of REITs?
    Tue, May. 6 ARCP 40 Comments

    Summary

    • Great salsa is all about diversification. Only by adding diverse ingredients together can we achieve the desired outcome.
    • REITs have been around long enough (5 decades) and generated solid enough returns that I don't view REITs as an alternative class.
    • Since the emergence of the modern REIT structure, dividends have been a large factor in the outperformance of REITs relative to the broad equity market.
  • Healthcare Trust Of America Is As Pure As The Driven Snow
    Editors' Pick • Mon, May. 5 HTA 25 Comments

    Summary

    • As a "pure play" REIT, HTA is a dedicated owner of medical office buildings, with a portfolio of 114 buildings (and over 14.1 million square feet) in the 27 states.
    • HTA ended the quarter with excellent credit metrics, with debt-to-enterprise value of 31%, one of the lowest in our peer group, and debt-to-proforma EBITDA of 5.3 times.
    • This is a "pure play" bet that's paying off, and I believe the price could hit $13.00 – especially "when there's a dividend increase.".
  • What Is Your Risk Tolerance With American Realty Capital Properties?
    Thu, May. 1 ARCP 132 Comments

    Summary

    • If you're unwilling to take the chance that an investment that might drop in price, you have little or no risk tolerance.
    • Risk tolerance simply describes whether you invest in real estate, stocks, the quarter slot machine, high stakes blackjack, or stay at home with a piggy bank – or maybe a.
    • I believe that the market has demonstrated that ARCP has a high degree of risk and as we saw this week, a simple acquisition rumor caused shares to slide.
  • Why It's Important To Own Predictable REIT Stocks
    Editors' Pick • Tue, Apr. 29 AL, HCP, O 82 Comments

    Summary

    • The dividends that REIT investors receive out of earnings haven't been reduced by taxes at the corporate level, making REITs tax-efficient conduits for real estate income.
    • Over the past 20-plus years, listed equity REITs have provided 30% more dividend income than small-cap value stocks in the Russell 2000V, with 43% less variability.
    • Many REITs are now increasing dividend payouts, and that’s the best possible evidence that the security is safe and management has an alignment of interests.
  • The Smallest Health Care REIT That Pays The Highest Dividend
    Mon, Apr. 28 DOC 35 Comments

    Summary

    • When it comes to health care investing, DOC is a like a “kid in a candy shop.”.
    • DOC targets unleveraged investment returns between 7% and 10% and the company has in excess of $300 million of investment properties under review.
    • DOC's current dividend yield is 6.72% - the highest yield in the Health Care sector.
    • DOC’s IPO and secondary offering (in December) were oversubscribed by a significant amount and over 60% of the company’s shareholders are Institutional Investors.
  • Ventas Posts Another Solid Quarter And Enters The United Kingdom
    Mon, Apr. 28 VTR 21 Comments

    Summary

    • After the broad REIT sell-off last May, it seems that Mr. Market has finally begun to recognize Ventas for its "blue chip" credentials.
    • In the latest quarter, Ventas increased its cash flow by over 23% (since last year).
    • I would recommend buying Ventas shares on market weakness (under $60).
    • For an investor looking for "big 3" health care REIT exposure today, I believe that HCP represents the best opportunity.
  • Don't Follow The Herd, Consider STAG Instead
    Editors' Pick • Mon, Apr. 28 STAG 48 Comments

    Summary

    • In the world of investing there is a natural tendency to "follow the herd" and become fixated on the irrational exuberance of the market.
    • Given STAG's strong growth prospects and having switched to a monthly distribution, it seems likely that the company’s dividend expansion will grow in frequency.
    • By following the herd, some market timers may look at the one-time slide last week as weakness.
    • I believe STAG represents a strong buying opportunity and I'm moving my TARGET price to $25.00.
  • Ramco-Gershenson Is A REIT That Could Bounce Or Be Bought
    Editors' Pick • Thu, Apr. 24 RPT 10 Comments

    Summary

    • Ramco-Gershenson is trading at $16.16 a share with a Price to Funds from Operations (P/FFO) multiple of 13x. That’s around 15% below the peer average of 15.5x.
    • What’s even more interesting to me is the fact that Ramco-Gershenson is what I call a “tweener.”.
    • In REIT-dom the shopping center sector is getting crowded.
    • This REIT is “ripe” for a “combination” and the shares are somewhat attractive.
  • The REIT Way To Invest In A Wide Moat Of Dividend Repeatability
    Editors' Pick • Wed, Apr. 23 ESS, FRT, HCP 59 Comments

    Summary

    • The larger moats could enhance the defensive strategies and allow the royal families to remain competitive in battle.
    • Warren Buffett has used the term "wide moat" at least 20 times since 1986 to describe his investment process in annual letters to Berkshire Hathaway shareholders.
    • Companies with wide economic moats have a better chance of long-term survival, and they also help to protect revenue streams, profitability, and market share.
    • Much like the evolution of fortresses, REITs have also evolved (over 5 decades) into an asset class with wider economic moats that enjoy a better chance of long-term survival.
  • What's The Probability That This Dark Horse REIT Wins?
    Editors' Pick • Tue, Apr. 22 LXP 46 Comments

    Summary

    • In any “dark horse” race, the odds for Lexington to outperform were high, but I was convinced that there were “probability distributions” that could lead Lexington to grow.
    • I was predicting that Lexington would be ahead of the game by now.
    • Clearly Lexington has the cash flow to pay out a higher dividend but instead the company has opted to prudently retain cash to reinvest and pay down debt.
    • It’s an endurance contest where the winners and losers are separated because they pick stocks with above-average appreciation potential and safe and growing dividends, and buy them at attractive prices.
  • It Seems Like Groundhog Day: Omega Bumps The Dividend Again
    Editors' Pick • Mon, Apr. 21 OHI 26 Comments

    Summary

    • In early January Mr. Market gave me the opportunity. I pounced on Omega shares at $29.80, just a few nickels below my target price.
    • Last week Omega announced that it was increasing its common dividend by $.01 per share over the previous quarter.
    • That’s beginning to sound like “groundhog day” for Omega since this makes the seventh consecutive quarterly dividend increase - raising the dividend from $0.49 per share to $0.50.
    • So although some might consider 7 quarterly dividend increases boring, I find it quite satisfying.
  • Is There Adequate Bench Strength For Digital Realty?
    Editors' Pick • Thu, Apr. 17 DLR 35 Comments

    Summary

    • When it comes down to succession planning, it’s critical that each company has “bench strength.”.
    • With no CEO, I feel kind of like the cruise ship passenger.
    • The key question for me is making sure that the ship sails smoothly until the new CEO is steering the vessel.
    • So I suppose I could jump off and redeploy the capital into a safer boat, one that has a captain.
  • HCP Is Climbing Back Up, Should I Get Back In The Game?
    Editors' Pick • Wed, Apr. 16 HCP 51 Comments

    Summary

    • It seems that Mr. Market may have found a bottom for HCP, and now, maybe it's time to get back in the game?
    • There aren't too many REITs with that track record, especially HCP that boasts a record of 29 years of consecutive dividends paid.
    • When selecting sound securities, one needs some kind of buffer to protect against market fluctuations – a margin of safety.
    • Last year, we saw HCP's price rising, and as we often recognize, greed leads investors to speculate, to make substantial, high-risk bets based upon optimistic predictions.
  • Oh, Ho, Ho, It's New York REIT, You Know
    Tue, Apr. 15 NYRT 63 Comments

    Summary

    • Today, Nick Schorsch takes the stage again in his 6th liquidity event, and this magic is close to home in New York City.
    • NYRT offers a compelling value proposition in that this REIT is the only "pure play" REIT focused exclusively on New York City real estate.
    • This is one of the few times that I have recommended a BUY price on the first day of listing.
  • I'm Buying W.P. Carey For The Long Haul
       • Tue, Apr. 15 WPC 83 Comments

    Summary

    • S&P recently provided WPC with a strong credit rating.
    • WPC increased its quarterly cash dividend to $0.895 per share, which equates to an annualized rate of $3.58.
    • Carey’s 15-year track record for dividend performance “seals the deal.”.
  • Why I'm Strongly Considering A Position In Extra Space Storage
    Editors' Pick • Mon, Apr. 14 EXR 19 Comments

    Summary

    • I often voice my disfavor for analysts, authors and investors who try to pitch some confusing thesis for a stock that is predicted to achieve high returns with short-term trades.
    • Some of you may remember the 1982 new wave hit song (by Thomas Dolby), She Blinded Me With Science.
    • I intend to establish a position in Extra Space at $45.00, although I have no confidence when I’ll be afforded that opportunity.
  • The REIT Way To Master The Art Of Dividend Repeatability
    Thu, Apr. 10 EXR, FRT, NNN 18 Comments

    Summary

    • In order to score at Golden Bell, a player must catapult his tee shot high in the air, pray that winds are down, and ski-dittle the ball.
    • Although I can’t attest to having a terrific scorecard, most pro golfers believe that distance is a much better indicator than accuracy.
    • The Great Recession reshaped the roster of dividend champions, especially in the financial sector.
    • When you see the history of "repeatability" forming, you must then look at the dividend growth prospects and pinpoint this with the fastest expected Funds from Operations (or FFO) growth.
  • Campus Crest Looks Cheap, Should I Hit The Buy Button?
       • Tue, Apr. 8 CCG 22 Comments

    Summary

    • Since my article in February 2013 it’s clear to see that Mr. Market saw no “zest” for Campus Crest.
    • I believe there’s more value in owning the common shares today that are priced at $8.62.
    • Considering that this REIT pays out over 90% of its FFO, I’m not calling this a table pounding BUY.
  • Schorsch Creates More Magic, This Time It's Health Care
    Editors' Pick • Tue, Apr. 8 VTR, HCP 25 Comments

    Summary

    • I have often referred to Nick Schorsch as the Houdini of REIT listings for incubating Non-Traded REITs.
    • Companies like VTR and HCP are almost forced to grow in order to feed the engine. It would seem logical that HCT would be a strong candidate for Ventas’s feeding.
    • Pound for pound, I believe that Ventas is the BEST Health Care REIT today and I don’t believe the risk premium of HCT warrants the return.
    • It’s clear that Nick Schorsch has more magic to come and I can’t wait for the next act.
  • Weingarten Has Evolved Into A More Lasting Model Of Differentiation
    Editors' Pick • Mon, Apr. 7 WRI 11 Comments

    Summary

    • Weingarten has transformed its investment model by focusing on markets with strong demographics including solid rent growth, educated employment, and high density locations.
    • As part of the focused reinvestment strategy, Weingarten has substantially increased its shop occupancy from 85.6% in 2010 to 89% in 2013.
    • Weingarten has returned 11.3% to shareholders over the last 90 days and I believe that the stock will see more momentum this year.
  • Realty Income: One Heck Of An Ark That's Prepared For The Storms Ahead
    Editors' Pick • Fri, Apr. 4 O 168 Comments

    Summary

    • The Noah Rule: "It is not enough to know it is going to rain, you have to actually build the ark!”.
    • One essential element for Realty Income’s battleship blueprint has been to match fund its investments with its long-term liabilities.
    • You cannot escape risk. All you can do is prepare and manage for it.
  • Will Chambers Street Benefit From This Historic BMW Announcement?
    Editors' Pick • Tue, Apr. 1 CSG 63 Comments

    Summary

    • The Spartanburg-based plant expansion is set to overtake BMW's largest plant, which is currently outside of Munich and builds about 340,000 cars a year.
    • As BMW expands its operations in the area, Chambers is likely to benefit from the expansion needs of many of the company's current tenants.
    • Chambers Street's current dividend yield is 6.49%. That's an attractive yield, and based upon the peer group, I believe that this REIT is one of the best Net Lease opportunities.
  • Can Healthcare Trust Of America Withstand A Lickin' And Keep On Tickin'?
       • Tue, Apr. 1 HTA 32 Comments

    Summary

    • Since I started accumulating shares (August 21st), HTA has returned 14.73%, beating the S&P 500 (14.5%) and most other REIT peers.
    • As healthcare utilization increases, there will be an increase in the need for all types of providers, including doctors and on-physician workers.
    • HTA has demonstrated a growing track record of consistency and a dividend increase to me implies that the earnings stream (and dividends) can withstand a “lickin' and keep on tickin'."
  • Finally, A Pay Day For Gramercy Shareholders
    Mon, Mar. 31 GPT 11 Comments

    Summary

    • After a hiatus of more than five years, Gramercy announced that the company was resuming its dividend payment to common stockholders (beginning with the first quarter of 2014).
    • I was hoping to see more “meat on the bone” for Gramercy’s new dividend; however, it’s plain to see that this Triple Net REIT is in a strong growth mode.
    • Gramercy looks like a small cap REIT that can continue to grow its footprint, possibly doubling in size in one year.
  • EPR Is A Unique Net Lease Brand I Would Like To Own
    Editors' Pick • Mon, Mar. 31 EPR 39 Comments

    Summary

    • It seems that many of the Triple Net REITs are chasing down the same properties and the lines are beginning to get blurred as it relates to brand differentiation.
    • 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.
    • ARCP's overhang has definitely impacted my decision to buy EPR and I would like to see some movement in ARCP’s share price before I gain more Net Lease exposure.
  • Intelligent REIT Investors Must Stay Focused On Dividend Dependability
    Editors' Pick • Mon, Mar. 31 CMO, DLR, ELS 33 Comments

    Summary

    • It's important to recognize that many investors purchase REIT shares for dependable and reliable income - a durable revenue stream that can be relied upon over a series of years.
    • Capstead has had to endure a highly unpredictable dividend history, and investors have had to tolerate a very inconsistent revenue model.
    • Reinvesting dividends can allow you to "super-size" your portfolio - something like owning shares in a free ATM machine.
  • It's A Prime Time To Buy Ashford Prime
    Wed, Mar. 26 AHP 7 Comments

    Summary

    • Ashford Trust continues to hold an approximately 19% interest in Ashford Prime, so growth and positive performance from Ashford Prime will be realized by Trust investors through that ownership position.
    • Ashford Trust investors hold the shares of AHP they received in the spin-off, then they will benefit from any positive performance at Prime.
    • Ashford Prime seems attractive, since listing last November the shares have fallen by around 28% to a close of $15.14.