Classic stuff. CommonWealth REIT (CWH) reappoints Joseph Morea to the board after he's forced to resign following his not getting enough votes to stay on at the annual meeting. "Tragicomedy in REIT land," tweets an observer. [View news story]
“In these circumstances, and because the board’s determination that Mr. Morea’s continued service and leadership would be in the trust’s best interest, the board requested that Mr. Morea accept appointment to the vacancy created by his resignation,” CommonWealth said.
Hahahahaha - a model of corporate governance. I have been warning folks forever about these guys.
Lest anyone think HNZ presents such a golden opportunity, at $104, the bonds yield 6.38%, or +317/30yr treasury (+383 to the interpolated curve). The low the '32s hit is today, at $102.34, the spread at the low was +331/30yr. Where you get +900/1000 (price for +900/30yr is $60) is beyond me.
As well, it is worth noting that the 2017s have a $101 change of control and currently trade below that.
Will The Sun Keep Shining On The Cloud Storage REITs? [View article]
See today's news on DLR converting their convertible preferred into common equity. While obviously dillutive, it helps further fortify their balance sheet which should pay off in the long run. Great thoughts Brad.
Why Are REIT Dividends Like Everlasting Gobstoppers? [View article]
Book value on REITs is difficult as the balance sheet carries the assets at depreciated value (unlike Australian and Canadians that mark them to market due to IFRS). P/FFO and P/AFFO, NOI growth, occupancy rates and implied cap rates are still the most useful metrics.
Why Are REIT Dividends Like Everlasting Gobstoppers? [View article]
Couple problems with your comment: 1. REITs must pay out 90% of TAXABLE INCOME, not free cash flow, these are different. Look at payouts relative to FFO and you will see how this is not usually a problem. 2. Management does not always get paid on AUM, there are some that do, most do not. 3. Having followed the sector for years, they are not fearful when others are fearful and greedy when others are greedy. Their capital activities are based on liquidity and balance sheet capacity. You will find, rather, that they were selling toprivate equity when PE guys drove cap rates below 5. They are typically cautious buyers and will take the opportunity to reposition their portfolio when greed enters the market.
There are, obviously, exceptions to this, but most well known and established REITs have shown enviable track records doing the opposite of the concerns you mention.
New Preferred Stock From Public Storage Illustrates Trade-Off Between Risk And Reward [View article]
Another great article Doug, thanks. Always informative.
One might prefer to look at the PSAprS as it has a CY of 5.56%, a stripped yield (taking out the accrued from the price) of 5.61% and a yield to call (1/12/17 call date) of 4.42%. The Ws have a 5.22% CY, a 5.23%. SY and a 5.37% YTC.
Is Simon Property The Most Overvalued Company? [View article]
At 20x est FFO, the company is not terribly overvalued. By dumping underperforming malls on the special servicer or turning them back to the bank, the portfolio becomes higher quality and should increase profitability and the company's metrics. Add to this their expansion abroad and their entry into the outlet space (notably with SKT) and shorting might not work out so well. Compare them to the apartment space (which has begun to show signs of weakness) and AVB at 25x est FFO and the same yield (2.79%) and ask which should really be shorted. The sector has, however, run up pretty well and is now within striking distance of their 52 wk highs. Time to look at preferreds for the income?
4 Intelligent REITs I Adore, But Can't Buy Right Now [View article]
Brad, Very valid points. The REIT market has some lofty valuations, but what drives them is the lack of alternatives. If it is income folks are after, the preferreds still have some value and have decent yields. Just a thought.
American Capital Agency Maintained Its Dividend, Unlike Annaly [View article]
There is a reason the dividend has been maintained - its called leverage. As I wrote back in August (http://seekingalpha.co...) the leverage will help sustain the dividend, but limits the flexibility of the company to respond. AGNC's leverage is still 200bps higher.
As well, consider the admission of a broken bnusiness model (agency only) by NLY as they bought in CXS. Should this be a warning to agency mbs mREITs? I think so.
Finally, it is not Mike O'Farrell - it is Mike Farrell. Getting the name of the person most closely associated with the mREIT sector only serves to reduce the credibility of the article.
Annaly Capital Could Be A Very Risky Investment Now - Stay Away [View article]
RS - right on the money here. NLY's buy in of CXS is a de-facto admission that the agency only model does not work (at least in this environment). AGNC - if it puts its head in the sand - will pay the price for hanging on to hope. If the mREIT sector is still in folks sights, they might want to look at the non-agency/commercial space (TWO, NRF...) for value. Another approach is the preferred stock of the mREITs as the recent sell off has brought them out of the startosphere. Mike
National Retail Properties Is A Slam Dunk REIT That Shoots Nothing But Net [View article]
Brad, another well done article. Of note, NNN also just announced the redemption of their converts - reducing potential dilution to shareholders. I find the pushback on the ARCT deal refreshing as shareholders are not just willing to get rolled over - especially with valuations where they are.
Classic stuff. CommonWealth REIT (CWH) reappoints Joseph Morea to the board after he's forced to resign following his not getting enough votes to stay on at the annual meeting. "Tragicomedy in REIT land," tweets an observer. [View news story]
Hahahahaha - a model of corporate governance. I have been warning folks forever about these guys.
YPF Continues To Look Attractive But Remains High Risk [View article]
The Debt Paradox That Everyone Should Be Aware Of [View article]
Heinz Debt: Worth Its Weight? [View article]
As well, it is worth noting that the 2017s have a $101 change of control and currently trade below that.
Will The Sun Keep Shining On The Cloud Storage REITs? [View article]
Why Are REIT Dividends Like Everlasting Gobstoppers? [View article]
Why Are REIT Dividends Like Everlasting Gobstoppers? [View article]
1. REITs must pay out 90% of TAXABLE INCOME, not free cash flow, these are different. Look at payouts relative to FFO and you will see how this is not usually a problem.
2. Management does not always get paid on AUM, there are some that do, most do not.
3. Having followed the sector for years, they are not fearful when others are fearful and greedy when others are greedy. Their capital activities are based on liquidity and balance sheet capacity. You will find, rather, that they were selling toprivate equity when PE guys drove cap rates below 5. They are typically cautious buyers and will take the opportunity to reposition their portfolio when greed enters the market.
There are, obviously, exceptions to this, but most well known and established REITs have shown enviable track records doing the opposite of the concerns you mention.
New Preferred Stock From Public Storage Illustrates Trade-Off Between Risk And Reward [View article]
One might prefer to look at the PSAprS as it has a CY of 5.56%, a stripped yield (taking out the accrued from the price) of 5.61% and a yield to call (1/12/17 call date) of 4.42%. The Ws have a 5.22% CY, a 5.23%. SY and a 5.37% YTC.
Is Simon Property The Most Overvalued Company? [View article]
4 Intelligent REITs I Adore, But Can't Buy Right Now [View article]
Mike
American Capital Agency Maintained Its Dividend, Unlike Annaly [View article]
As well, consider the admission of a broken bnusiness model (agency only) by NLY as they bought in CXS. Should this be a warning to agency mbs mREITs? I think so.
Finally, it is not Mike O'Farrell - it is Mike Farrell. Getting the name of the person most closely associated with the mREIT sector only serves to reduce the credibility of the article.
Annaly Capital Could Be A Very Risky Investment Now - Stay Away [View article]
Mike
National Retail Properties Is A Slam Dunk REIT That Shoots Nothing But Net [View article]
Mike
Off Line For Now [View instapost]
Off Line For Now [View instapost]