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Brad Thomas
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Brad Thomas has over 25 years of experience in the commercial real estate brokerage, development and investment sectors and the majority of his experience has been research and consulting. Over the years, Thomas has provided nationwide real estate brokerage, construction services, development... More
My company:
The Intelligent REIT Investor
My blog:
The Intelligent REIT Investor
My book:
Coming Soon
  • What Would You Like To Know About Your Favorite REIT? 9 comments
    Nov 6, 2012 6:40 AM | about stocks: O, NNN, CPT, ESS, SPG, ARCT, FRT, WSR, REG, VNO, KIM, CBL, EXL, EXR, WPC, ACC, CDR, TCO, SRC, SKT, LSE, MNR, HTA, WRI, GGP, STAG, AMRE, CUZ, ROIC, WRE, ELS, LXP, VTR, CUBE, OHI, EPR, EGP, UMH

    Towards the end of the 2011 Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) Letter to the Shareholders, the Chairman, Warren Buffett, wrote:

    My own preference - and you knew this was coming - is our third category: investment in productive assets, whether businesses, farms, or real estate. Ideally, these assets should have the ability in inflationary times to deliver output that will retain its purchasing-power value while requiring a minimum of new capital investment. Farms, real estate, and many businesses such as Coca-Cola (NYSE:KO), IBM (NYSE:IBM) and our own See's Candy meet that double-barreled test. Certain other companies - think of our regulated utilities, for example - fail it because inflation places heavy capital requirements on them. To earn more, their owners must invest more. Even so, these investments will remain superior to nonproductive or currency-based assets.

    And in the 2010 annual letter, the legendary investor wrote:

    Unquestionably, some people have become very rich through the use of borrowed money. However, that's also been a way to get very poor. When leverage works, it magnifies your gains. Your spouse thinks you're clever, and your neighbors get envious. But leverage is addictive. Once having profited from its wonders, very few people retreat to more conservative practices. And as we all learned in third grade - and some relearned in 2008 - any series of positive numbers, however impressive the numbers may be, evaporates when multiplied by a single zero. History tells us that leverage all too often produces zeroes, even when it is employed by very smart people.

    And finally, in the Oracle for Omaha's 2009 letter, Buffett wrote

    To build a compatible shareholder population, we try to communicate with our owners directly and informatively. Our goal is to tell you what we would like to know if our positions were reversed. Additionally, we try to post our quarterly and annual financial information on the Internet early on weekends, thereby giving you and other investors plenty of time during a non-trading period to digest just what has happened at our multi-faceted enterprise. (Occasionally, SEC deadlines force a non-Friday disclosure.) These matters simply can't be adequately summarized in a few paragraphs, nor do they lend themselves to the kind of catchy headline that journalists sometimes seek.

    Real Estate, Dividends, and Communicating with Owners

    Next week (November 13-15) I will be attending REITWorld 2012®: NAREIT's Annual Convention for All Things REIT® (in San Diego this year) to take advantage of the many opportunities to hear first-hand from REIT executives, engage your peers, learn from experts in the real estate investment community, and forge new relationships through the many networking opportunities available. REITWorld brings together investors, commercial real estate executives, and service providers to create an extraordinary opportunity to build your business.

    For those of you "seeking the most alpha" in REIT-dom, I welcome anyone interested to submit a question or comment and I will try to provide answers when I return. I plan to meet over 25 REIT CEO's and attend several group discussions. As you know, I have written on numerous REITs this year including:

    Camden Property Trust (NYSE:CPT), Essex Property Trust (NYSE:ESS), Simon Property Group (NYSE:SPG), Realty Income (NYSE:O), American Realty Capital Trust (NASDAQ:ARCT), American Realty Capital Properties (NASDAQ:ARCP). Macerich Co. (NYSE:MAC), Federal Realty (NYSE:FRT), National Retail Properties (NYSE:NNN), Whitestone REIT (NYSE:WSR), Regency Centers (NYSE:REG), Vornado Realty (NYSE:VNO), Kimco Realty (NYSE:KIM), CBL Properties (NYSE:CBL), Excel Trust (NYSE:EXL), Extra Space Storage (NYSE:EXR), W.P. Carey (NYSE:WPC), American Campus Communities (NYSE:ACC), Cedar Realty Trust (NYSE:CDR), Taubman Centers (NYSE:TCO), Sprit Realty Capital (NYSE:SRC), Tanger Factory Outlets (NYSE:SKT), CapLease (NYSE:LSE), Monmouth REIT (NYSE:MNR), Campus Crest (NYSE:CCG), Healthcare Trust of America (NYSE:HTA), Weingarten Realty Investors (NYSE:WRI), General Growth (NYSE:GGP), STAG Industrial (NYSE:STAG), AmREIT (NYSE:AMRE), Cousins Properties (NYSE:CUZ), Retail Opportunity Investment Corp. (NASDAQ:ROIC), Washington REIT (NYSE:WRE), Equity Lifestyle (NYSE:ELS), Lexington Realty Trust (NYSE:LXP), Ventas Inc (NYSE:VTR), CubeSmart (NYSE:CUBE), Omega Healthcare (NYSE:OHI), Entertainment Properties Trust (NYSE:EPR), EastGroup (NYSE:EGP), and UMH Properties (NYSE:UMH).

    As Buffet said "leverage all too often produces zeroes, even when it is employed by very smart people". After having witnessed one of the worst financial disasters in the history of REIT-dom, most of the equity REITs are now experiencing a dramatic comeback - making the case that REITs are slowly recovering, corporate profits are healthy, and some of the worst offenders are assiduously moving to repair the damage of the past.

    I would love to hear what you think. I will attempt not to offer the "catchy headlines that journalists sometimes seek" but instead provide valuable and sound research aimed to benefit the most "intelligent REIT investors".

    For more information on REITWorld click here.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: REITs, NAREIT Stocks: O, NNN, CPT, ESS, SPG, ARCT, FRT, WSR, REG, VNO, KIM, CBL, EXL, EXR, WPC, ACC, CDR, TCO, SRC, SKT, LSE, MNR, HTA, WRI, GGP, STAG, AMRE, CUZ, ROIC, WRE, ELS, LXP, VTR, CUBE, OHI, EPR, EGP, UMH
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Comments (9)
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  • Iwant2fly
    , contributor
    Comments (338) | Send Message
     
    Brad,
    Does anyone publish an easy to follow listing of REITs divided by type (mortgage, retail, equity, etc)? I've been on the NAREIT site but find it not so user friendly.
    Thanks in advance.
    Bob
    6 Nov 2012, 07:11 AM Reply Like
  • Brad Thomas
    , contributor
    Comments (8850) | Send Message
     
    Author’s reply » Bob - I am writing a newsletter with Forbes that should be available this year. I will post this on Seeking Alpha in a few days. Thanks, Brad
    6 Nov 2012, 08:03 AM Reply Like
  • Ocean Man
    , contributor
    Comments (537) | Send Message
     
    I would like to hear your thoughts on how EFC compares to mREITs like NLY and AGNC. Thanks.
    6 Nov 2012, 03:05 PM Reply Like
  • Philipsonh
    , contributor
    Comments (665) | Send Message
     
    Yahoo Finance breaks down Reits by category. Just key in any Reit symbol, and then go to ' industry' , on left hand site. Then click on 'sector' . All reit categories will be displayed.
    6 Nov 2012, 07:39 PM Reply Like
  • Iwant2fly
    , contributor
    Comments (338) | Send Message
     
    Thanks!
    6 Nov 2012, 08:33 PM Reply Like
  • stlharbers
    , contributor
    Comment (1) | Send Message
     
    Do you like DCT going forward?
    7 Nov 2012, 11:18 PM Reply Like
  • Brad Thomas
    , contributor
    Comments (8850) | Send Message
     
    Author’s reply » 4.44 dividend = ok
    27.46% total return (ytd) = good
    89.5% occupancy = ok
    38% debt to market cap = ok

     

    Based on these metrics, I would say average. I prefer MNR or STAG in the industrial sector.....much better dividend yield (MNR = 5.56% and STAG = 6.31%). STAG has more risk (new company) and MNR has NEVER cut a dividend in around 2 decades....Let me know if I can help. Thanks, Brad
    7 Nov 2012, 11:36 PM Reply Like
  • regissoti
    , contributor
    Comment (1) | Send Message
     
    Brad,

     

    Any thoughts on GOV???
    24 Jun 2013, 08:27 AM Reply Like
  • Brad Thomas
    , contributor
    Comments (8850) | Send Message
     
    Author’s reply » regissoti - I have not researched GOV in detail....I saw this article on The Street yesterday:

     

    In This Government REIT, Investors Can Trust
    Government Properties - as the name suggests - has a lot of government tenants, a stable business. You can profit for this high-yielding REIT.http://bit.ly/14kzKk7

     

    Check out my newsletter: http://bit.ly/Z6Rh1J
    24 Jun 2013, 08:36 AM Reply Like
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