REIT repurchase plans soar

• REITs are capital-intensive businesses, and - needing constant access to equity and debt markets to raise capital - it's usually silly to buy back stock only to have to turn around and issue it ... That's in normal times though. With the median discount to NAV for the overall equity REIT market at 17.37% as of Sept. 15, repurchase plans are flying out of boardrooms.
• Four of the recent announcements - from Starwood Waypoint (SWAY), Altisource Residential (NYSE:RESI), CBL & Associates (NYSE:CBL), and Investors Real Estate Trust (NYSE:IRET) - are from companies trading at a 30% or more discount to NAV.
• "A management team once told me that when your shares are cheap and your real estate is expensive, you sell your real estate and you buy back shares," says Stifel's Simon Yarmak.
• Brandywine Realty Trust (NYSE:BDN) - its stock selling at a 24.55% discount to NAV - can buy back shares at an implied cap rate of 8.8%, figures Mizuho's Rich Anderson ... Try buying any decent property at anywhere near that cap rate today.
• Source: SNL Financial
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