"A dilutive portfolio transition and lease expirations drive our Street-low FFO estimates," says analyst Brad Burke, starting Columbia Property Trust (NYSE:CXP) with a Sell and $22 price target. "Exposure to soft suburban and second-tier CBD office markets (Cleveland, Baltimore, Newark) would further appear to limit upside."
Burke acknowledges the stock's apparent cheap valuation, but says the stock looks a lot more expensive if one assumes - which he does - two years of little or no FFO growth.
"We are steadfastly working toward the goal of One AIG," says new CEO Peter Hancock. "We have learned that a federated business model exposes us to the weakest link in the chain."
Exiting AIG after a 25-year career is Jay Wintrob, president and CEO of AIG LIfe & Retirement, and once thought to be the heir apparent to Bob Benmosche. Out after five years with the insurer is Michael Cowan, EVP and Chief Administrative Officer.
Among those serving on the newly established Operating Committee is just-hired Chief Information Officer Philip Fasano. Hancock has made clear his belief that investments in technology will yield a big payoff for the company.
Following meetings with management, Sandler O'Neill analyst Richard Repetto says Interactive Brokers (NASDAQ:IBKR) will name a new president during its Q3 earnings call in October. The new president will be "heir apparent" to current Chairman, President, and CEO Thomas Peterffy, though Peterffy - appearing to still enjoy his role, says Repetto - has no immediate plans to step down.
Looking for more firepower with which to originate and purchase commercial loans and other targeted assets, Blackstone Mortgage Trust (NYSE:BXMT) is selling 8M shares in a secondary offering, with an underwriter greenshoe of 1.2M shares.
Although all three - American Campus Communities (ACC -1.3%), Campus Crest Communities (CCG -1.2%), and Education Realty Trust (EDR -1.1%) - have performed broadly in line with the broad REIT universe, the trio consistently score low in the Markit REIT model.
Said model ranks REITs on things like balance sheet strength, operational strategy, and price momentum, and those ranking near the bottom have underperformed the REIT sector by more than 25% over the past five years. CCG and EDR have typically been in the worst-ranked group, and ACC has recently joined them, mostly thanks to the stock price's premium to NAV.
Another red flag (or buying signal depending on how you look at it): The shorts are circling, with short interest up 41% YTD, particularly at EDR, where the ratio of shares on loan has jumped six-fold this year as of the end of July.
In addition to the 90/10 joint venture with Northstar Realty on the purchase of a $3.2B hotel portfolio (Chatham's investment will be $29M), Chatham Lodging Trust (CLDT -0.7%) announces the purchase of the recently re-opened 194-room Hyatt Place Denver/Cherry Creek for $32M, or $165K per room.
Back to the NorthStar deal - Chatham is also in talks with NorthStar for the outright purchase of four hotels comprising 575 rooms from that portfolio.
The entire sector is in the red, but the biggest declines are being seen in the industry giants, about the only spots large investors can move a lot of shares quickly: Annaly Capital (NLY -1.6%), American Capital Agency (AGNC -1.6%).
Yesterday's FOMC statement may have left in the "considerable period" language, but the committee remains on course to begin a rate hike cycle in less than a year.
Further, the selloff on the long end of the curve can has reached the sizable stage - the 10-year yield is up 32 basis points in a month, and has now erased about all of the summer's decline. Book values could take a hit (though hedging is likely to ease the pain).
Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
Calpers' decision to pull $4B it's invested in hedge funds isn't necessarily a bell-ringer for the industry, according to eVestment, which says fund flows were positive again in August, lifting AUM to a record-high $3.068T.
Much of asset growth comes from performance gains, but investors added an estimated $12.6B of new money, bringing inflows to $114.7B YTD.
Watching flows with interest is Och-Ziff Capital (OZM +0.2%).
In related Calpers news, the pension fund promotes from within, naming Ted Eliopoulos to the CIO post after a 7-month search. As with the yanking of $4B from hedge funds, the hiring signals a move to a simpler, more conservative investment approach.
At issue was a $0.15 per share dividend paid in May by Santander Consumer USA (SC +0.1%) despite the fact that the capital plan submitted by Santander Holdings - the U.S. unit of Santander (SAN +1.2%) - had not been approved by the Fed.
Santander quickly mitigated the violation by injecting $20.8M into its U.S. operation, and today agrees to strengthen its board oversight of management regarding any capital returns.
Institutional Shareholder Services recommends Saratoga Investment (SAR) owners vote for all proposals scheduled for the upcoming annual meeting, including one which would allow the company to issue shares below net asset value.
Saratoga reminds it has no imminent plans to issue shares below NAV, and that the authority granted under the proposal expires in one year. The company also notes insiders own more than 34% of the float and are their shares will not be included in the vote tally.
The portfolio comprises 52 upscale extended stay and select service hotels with roughly 7K rooms. NorthStar Realty (NYSE:NRF) is buying the package along with Chatham Lodging Trust (NYSE:CLDT), and NorthStar will have about a 90% interest in the joint venture.
NorthStar expects to obtain non-recourse financing for about 70-75% of the purchase price, and earn an initial cash-on-cash yield in the mid-teens.
Following the closing of this deal and another one for $700M this month, NorthStar will have about a $3.2B hotel portfolio consisting of 159 hotels and more than 20K rooms.
National Bank of Greece (NYSE:NBG) plans to sell 40% of Finansbank by the end of 2015, Deputy CEO Paula Hadjisotiriou said last month, hoping to raise about $1.5B.
NBG is a "reluctant" seller of the profitable unit, but is forced to do so as part of its restructuring plan agreed to with the EU Commission.
“Being the eighth-largest bank in Turkey with a higher-than-average retail-geared loan portfolio, it could be an interesting asset, offering an almost non-existing exposure to the mid-cap space,” says BGC Partners analyst Cagdas Dogan.
MSCI will being paying a dividend at an annual rate of $0.72 per share for a 1.55% yield based on last night's close. The board also boosts the existing share repurchase plan to $850M from $300M, including a $300M accelerated share repurchase agreement to go into force today.
The ASR is expected to cut the float (currently 116M shares) by about 4.5M shares, and the remaining $550M is forecast to be utilized by the end of 2016.