Seeking Alpha
View as an RSS Feed

Joseph Ori, CFA  

View Joseph Ori, CFA's Comments BY TICKER:
Latest  |  Highest rated
  • REIT Focus: Liberty Property Trust [View article]
    Thanks for the comments and answers are below:
    1. Institutional share ownership is from Yahoo.finance and a percentage greater than 100% is probably due to either double counting large investment manager funds, like Vanguard and/or short sales.
    2. Agree that LPT has been repositioning the assets from low return suburban office to higher return urban office and industrial.
    3. Agree on the slow growth of LPT, but I think with the portfolio repositioning, higher job growth and 5.3% yield, the 12 mo. total return will be in the low to mid teens.
    4. I don't think they need to split into two REITs with their repositioning program.
    5. LPT is self managed.
    6. CEO is on a lot of boards, but most are non-profits and shouldn't conflict with his responsibilities.
    Apr 24, 2015. 05:57 PM | Likes Like |Link to Comment
  • REIT Focus: Corporate Office Properties Trust [View article]
    I agree not to own OFC, but all investors should have a 10%-20% of their overall portfolio allocation to REITs via an ETF. I would split it 50%/50% between US REITs and Global REITs.

    You are correct that many REITs are in bubble territory, primarily from the search for yield in a zero interest rate economy. If rates do rise, REIT stocks will certainly decline. If you remember in 2013, the 10 Yr Note went from 1.6% in May to 3% in September and the average REIT stock was down 22%.
    Feb 20, 2015. 11:31 AM | Likes Like |Link to Comment
  • REIT Focus: AvalonBay Communities, Inc. [View article]
    Those ownership percent's are from Yahoo finance and yes, there should be a small percentage for individual ownership.

    AVB is good REIT, but is way overpriced on a real estate value basis. I would expect all the apartment REITs to underperform in 2015, due to the large amount of supply coming to market.
    Jan 22, 2015. 11:57 AM | Likes Like |Link to Comment
  • REIT Focus: First Industrial Realty Trust, Inc. [View article]
    There is nothing wrong with your income approach to investing. I'm a real estate guy that looks for value and I believe that FR is undervalued and that's why I like the stock even though it doesn't meet your income requirement.
    Jan 21, 2015. 11:49 AM | Likes Like |Link to Comment
  • REIT Focus: First Industrial Realty Trust, Inc. [View article]
    Understand, but one of my recommendations to FR is to raise the dividend which is much less as a % of FFO than its peers. I believe they will do this in the first quarter of 2015.
    Jan 20, 2015. 11:30 AM | Likes Like |Link to Comment
  • REIT Focus: First Industrial Realty Trust, Inc. [View article]
    I like FR because of the valuation and future growth potential if management increases the dividend, refinances debt and sells off their small properties. If the 10 Yr T-Note currently at 2.15% rises 1%, then all REITs will be hurt as this will raise the cost of capital, cap rates and lower values. Even though 1% is not a large nominal rate increase, its a 48% percentage increase.

    Last May, the 10 Yr. was 1.6% and increased to 3% by 9/13 and the average REIT stock was down over 20%.
    Dec 19, 2014. 12:00 PM | Likes Like |Link to Comment
  • REIT Focus: Associated Estates Realty Corporation [View article]
    The stock is still way overpriced like almost all the apartment REITs. Most are selling at 4%-5% cap rates, which is 20%+ above market values. If you have a good profit in it, I would sell it and reinvest in Home Properties, Weingarten or Brandywine.

    Everybody thought Yahoo was great deal at $240/sh. back in 2000.
    Dec 11, 2014. 12:19 PM | Likes Like |Link to Comment
  • REIT Focus: Essex Properties, Inc. [View article]
    Yes, its a good company, but way overpriced at $199/sh. and 2.6% yield.
    Nov 22, 2014. 11:31 AM | Likes Like |Link to Comment
  • REIT Focus: Parkway Properties, Inc. [View article]
    I'm not worried about $429M is debt coming due in the next four years out of a total debt of $1.3B. PKY has ample cash and credit lines to fund any short term debt needs. If rates rise, as I believe they will then yes, their cost of capital will increase and so will cap rates.

    I would be more nervous if 70% or more of their long term debt was coming due.
    Jul 24, 2014. 11:59 AM | Likes Like |Link to Comment
  • REIT Focus: Parkway Properties, Inc. [View article]
    We have buy ratings on these REITs due to their discount to NAV and attractive dividend; Weingarten Realty, Brandywine, Home Properties, CBL Associates and Inland Realty.

    Most REITs are overpriced due to the Fed's zero interest rate policy, the low cost of capital and the chase for yield from institutional and momentum investors, however, there are a few like the ones above that we would buy.
    Jul 17, 2014. 11:56 AM | Likes Like |Link to Comment
  • REIT Focus: Spirit Realty Capital, Inc. [View article]
    I agree that the entire Inland Group has a somewhat tarnished reputation, but I like IRC because it has 5.4% dividend yield and trades at a 10% discount to NAV.
    Jul 11, 2014. 11:14 AM | Likes Like |Link to Comment
  • REIT Focus: Spirit Realty Capital, Inc. [View article]
    I used an average 8% cap rate to value the company because that is what net lease deals are and should be trading at and that is the average return SRC is getting today on its deals. They bought Cole at the top of the market in 7/13 at a 6.5% cap rate, which resulted in the $291M in goodwill. A REIT has to really overpay for a company to record goodwill as most of the excess price over the FMV of the targets assets are recorded as lease intangibles

    There is no magic in buying net lease assets as its nothing more than a bond type business with fairly flat income that is subject to high interest rate risk.

    Vornado is a diversified REIT and its valuation would be totally different. The office assets would be capped at 6.5%, the retail assets at 7%, garages at 10%, the toy stores at 6-8 times EBITDA and land and other assets at book value.

    You are correct that many REITs are trading at premiums to NAV and this is due to the search for yield in a zero interest rate environment. There a better REITs to own than SRC and we have buy ratings on Weingarten, Brandywine, Home Properties, Inland Real Estate and CBL.
    Jul 10, 2014. 12:07 PM | Likes Like |Link to Comment
  • REIT Focus: Spirit Realty Capital, Inc. [View article]
    Our analysis reveals that the NAV of SRC is overpriced by 27% at the current price of $11.40/sh.. It will continue to grow, however, the risk in owning the shares is higher interest rates.

    We would not acquire the stock at this price. If you own it, hold until rates begin rising and then sell it.

    Management is questionable as the CEO was part of the senior management team that drove General Growth Properties into bankruptcy in 2009 from overzealous acquisitions and high leverage. The management team also acquired Cole Credit at the top of the market in 7/13 at a 6.5% cap rate which resulted in $291M in Goodwill, which is very rare for a REIT. I therefore question the strategy and capital allocation decisions of this management team.
    Jun 23, 2014. 11:59 AM | Likes Like |Link to Comment
  • REIT Focus: Brandywine Realty Trust [View article]
    I use 3.5% as an average inflation rate for the one year forward NOI. The CPI is less than that but it doesn't reflect the "real" world of rising prices which I think is around 5% or 6% per year.

    I like both of those office projects and the Philly office market. Rents are rising to an average of $27 psf, vacancy is declining to 14% and there is only 272,000 sq. ft. of new space coming into the market.

    I'm bullish on suburban office REITs because of their discount to NAV, higher dividend yield and the increase in office demand due to a better economy.

    I am looking for BDN to finally raise their dividend in the third quarter.
    Jun 18, 2014. 11:54 AM | 1 Like Like |Link to Comment
  • REIT Focus: EastGroup Properties, Inc. [View article]
    EGP has a fine portfolio and the stock has had a good run, but its now way overpriced and I was even being generous valuing their industrial assets at a 7% cap rate. They also have some cash flow issues as they had to use part of the 1Q stock offering to fund the 1Q dividend.
    May 19, 2014. 05:28 PM | Likes Like |Link to Comment
COMMENTS STATS
91 Comments
12 Likes