Now at BTIG from Cowen & Co., analyst James Sullivan starts coverage of Physicians Realty Trust (NYSE:DOC) with a Buy rating and $42 price target. Growing the portfolio to nearly $3B following the $130M IPO, management has earned a reputation as solid capital allocators in the medical office space. New deals should remain a core driver of the business, resulting in outsized earnings growth next year.
STORE Capital (NYSE:STOR) is initiated at Buy with a $35 price target, with Sullivan taking note of the company's combination of the smallest portfolio, differentiated acquisition strategy, and management track record.
A West Coast focus and management's ability to source new investments should deliver excess returns to investors, says Sullivan, starting Retail Opportunity (NASDAQ:ROIC) with a Buy and $25 price target.
Kilroy Realty (NYSE:KRC) has upside from the below-market rents in its portfolio and an extension into life science real estate. He starts it at Buy with $80 price target.
Q1 normalized FFO of $23.7M or $0.22 per share vs. $22.7M and $0.26 in Q4. The per share amount fell thanks to a 21.3M share secondary early in the quarter. There was another 25.9M share sale in Q2 around the $725M deal with Catholic Health Initiatives. This is on track to close this quarter in two or more tranches.
Q1 investments of $202.3M, includes 16 healthcare facilities and two condos totaling 752K leasable square feet, and one mezzanine loan.
The company sold 22.5M shares at a price of $17.85 each vs. the originally planned sale of 18M shares. Gross proceeds were $387.9M, and the underwriters have an option to buy another 3.375M shares at that price.
The company has agreed to purchase 52 medical office facilities from Catholic Health Initiatives for $724.9M. The properties total 3.16M square feet in ten states. The portfolio is 94.4% leased, with total year-one NOI of $43.5M.
CHI is the fifth-largest non-profit healthcare system in the U.S.
To help fund the deal, DOC is selling 18M shares of stock with an underwriter greenshoe of 2.7M shares.
The stock's lower by 2.1% in very thin after hours trading.
Q4 normalized FFO of $22.723M or $0.26 per share vs. $11.162M and $0.22 one year ago. Normalized FAD per share of $0.24 vs. $0.20. Quarterly dividend is $0.225.
$152.8M of investments in Q4 comprising 19 healthcare facilities totaling nearly 500K square feet, and three mezzanine loans. Boosted gross leaseable square footage by 9.3% to 5.8M square feet. Another $105.6M of investments closed since quarter's end.