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  • Reality Check On REITs And Rising Rates [View article]
    Ok, so when exactly do REITs take a hit? Every asset class has a weakness, so REITs do well when interest rates are low, they do better when rates are increasing. At what point, do REITs actually underperform? I have been hearing a ton of commentary of how REITs are like fortresses that are unstoppable. Even Sears is spinning off a REIT, and there are several other IPOs in the works. It's almost like REITs are never going to go down.
    Apr 4, 2015. 09:55 AM | 1 Like Like |Link to Comment
  • Reality Check On REITs And Rising Rates [View article]
    Ok, so based on what you said REITs will get affected by rising rates, but only ones in certain asset classes. As you mentioned, leases that are long-term will get hit the hardest and this is expected to occur. So when rates rise, anything with a lease of more 10 years will take a hit. So pretty much most NNN assets out there and several shopping centers with long-term tenants. Industrial facilities tend to have long-term leases as well, some are nearly 20 years, so they will take a hit too. I know some office buildings where the average lease term is more than 10 years will get hit as well. I mean pretty much most of the real estate assets out there will see some sort of hit.
    Apr 2, 2015. 11:32 AM | 1 Like Like |Link to Comment
  • When Good News Is Bad News For The Markets And Great News For REIT Buyers [View article]
    We have a significant advisory business for REITs. We have worked with management of a few REITs mentioned here and plenty of others not mentioned. I just wanted to disclose this. I have no positions, long or short in either.

    Here is what I will say, REITs, in my opinion are likely to see their stocks hit depending on how much rates rise. Here is why:

    REITs have been the most competitive buyers in any asset class. They can afford to overpay and often have. The point of a REIT is to grow assets. The fact that REITs have to overpay causes cap rate compression. Keep in mind, REITs are pretty conservative in leverage, which means they get some good floating and fixed terms. This allows them to bid competitively.

    When rates rise, the REITs that overpaid for assets will have to refinance their debt and be in a position where they cannot get the same terms they had before. Its even worse with floating debt as the impact is immediate.

    Many cap rates are at all-time lows. So its a complicated situation. Anyways these are my thoughts. Obviously, a mild rise in rates won't be nothing, but when rates rise over a course, the REITs will get impacted, some more than others. This is my opinion. Take it with a grain of salt.
    Mar 8, 2015. 08:06 PM | 5 Likes Like |Link to Comment
  • Hersha Hospitality Has All Of The Ingredients For Something Special [View article]
    Brad,

    What are your thoughts on the supply? I know you address it, but having worked with developers and funds, these metrics are always lagging. Its concerning when the CEO of Hilton says that the NYC hotel market is in for challenges this year. Supply is not stopping either and its only ramping up. Cap rates are still 6%-7% for NYC properties, which is still attractive, and by the time the RevPar declines, it will be too late. You have to be careful with supply and demand numbers, none of it is real time.

    I just noticed that for the first time ever, the top 25 markets saw less growth than those not in it. This is because every developer pounced on an opportunity to build in these areas, with the bulk of it happening in NYC.
    Feb 27, 2015. 02:13 PM | 1 Like Like |Link to Comment
  • Hersha Hospitality Has All Of The Ingredients For Something Special [View article]
    Brad,

    Can you address this?
    Feb 24, 2015. 03:38 PM | 1 Like Like |Link to Comment
  • Frontier's Acquisition Will Support A Growing Dividend [View article]
    Maggie,

    Of course wireless is dominating the voice segment, but I honestly have a difficult time believing that the wired business will seize to exist. There will always be a need to have wired lines.
    Feb 16, 2015. 10:21 AM | 1 Like Like |Link to Comment
  • Gilead Sciences Could Be A Dividend Growth Stock [View article]
    Yes, one thing I love about Gilead is that they are very conservative when it comes to projections. I know there is much more potential for growth internationally, but wanted to base my assumptions on what management stated. Thanks for reading.
    Feb 9, 2015. 06:44 PM | 5 Likes Like |Link to Comment
  • Gilead Sciences Could Be A Dividend Growth Stock [View article]
    You may be right. I do believe it has the makings of the potential large cap dividend growth company if Harvoni is successful. The company is clearly committed to returning cash back to shareholders.
    Feb 9, 2015. 06:40 PM | 1 Like Like |Link to Comment
  • A New 8% Yielder Paying Every Month [View article]
    It has to with improvement in the company. LTS had a pretty good 2013, but given that majority of their profit is from IBD, the market seemed to have perceived this negatively. After all, the investment banks are still getting hit in terms of dealflow. However, LTS has focused more on recurring IBD revenue than single deal transactions. They now have a more streamlined and less volatile approach to collecting fees including a newer commission structure. I believe this explains a bulk of what has occurred with the preferred. This switch began to be more noticeable as Q1 was reported.
    Nov 11, 2014. 11:20 AM | Likes Like |Link to Comment
  • A New 8% Yielder Paying Every Month [View article]
    Yes, May 2018. The preferred can't be called. It just has low liquidity and has been hovering in the $25 range for the last few days. The preferred had been rebounding for some time and seems to be just stuck in the $25 range now. This might be due to the fact that the market is not willing to pay a premium over par and is sufficient with the 8% yield the preferred is getting.
    Nov 11, 2014. 08:03 AM | Likes Like |Link to Comment
  • A 6.6% Yield Worth Taking A Look At [View article]
    Most yields like this have small issuances. Only time you might see high liquidity is with bank preferreds. Liquidity is really only a problem if you plan to trade preferreds. Liquidity has rarely impacted my decision to invest. You have to be a buy and hold investor when it comes to preferreds like this.
    Nov 8, 2014. 10:01 PM | Likes Like |Link to Comment
  • A 6.6% Yield Worth Taking A Look At [View article]
    NRF isn't a pure REIT that owns assets. One of the reasons it has a higher yield because the company focuses on originating debt. ARCPP for obvious reasons has a much higher yield now. Yield is based on risk. I could give you a ton more preferreds with better yields, doesn't make them sound investments. If your just looking for maximum yield then this stock isn't for you. I want investors to get a good yield based on safety.
    Nov 8, 2014. 10:19 AM | 2 Likes Like |Link to Comment
  • Box Ships: A 9.5% Yield For Your Income Portfolio [View article]
    So here is what I have gathered from some digging. It seems the shipping industry is continuing to build vessels. This overbuilding of vessels is causing freight rates to decline. A 4%-5% decline is expected in 2015.

    http://bit.ly/1xeXqF4

    Box Ships had previous contracts are going to be expiring soon. These contracts will see massive decline in rates if renewed. Couple this with the fact that the common dividend has been gone for awhile and high leverage, the investment community believes the preferred dividend could be on the chopping block.

    At the time of this article, my thesis was that shipbuilding would decline to balance out the supply equation. Unfortunately, there is just too much building going on and not enough demand to justify it. The only companies that will survive will be large mergers to provide enough synergies to cut costs.

    Given TEU's size, I think it might be time to sell. Either TEU is forced to get bought out or will continue to see decline in rates and be forced to file bankruptcy. The recent spike in the preferred could be due to a variety of reasons, but given the low float, all it takes is a couple big trades to move the stock. It could either be an insider that bought some or just some individual thinking its a bargain. I think this spike is a good exit point.
    Oct 23, 2014. 07:41 PM | Likes Like |Link to Comment
  • Box Ships: A 9.5% Yield For Your Income Portfolio [View article]
    Sorry, I have been extremely busy. My apologies, I will respond soon. Thank you.
    Oct 23, 2014. 10:48 AM | Likes Like |Link to Comment
  • Avoid This 9%+ Yield [View article]
    Its nice to know a major fund is buying, but I try not to blindly follow these individuals when investing. I am a fan of Berkowitz, but I don't know to what level he valued the properties. Has he sought out independent appraisals from 3rd parties to value the real estate? That is really the only way for him to value it, and thats the value the banks lend on, not a number that he believes to be right. Also please read my article, I say the RE has clear value and can be monetized, but most of that payoff will have to be used for the debt thats maturing sooner. Once you monetize the entire real estate portfolio, its hard for there to be anything left when the 2018 debt comes time to mature.
    Aug 23, 2014. 03:07 PM | Likes Like |Link to Comment
COMMENTS STATS
556 Comments
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