Equity Commonwealth: Going From Bad, To Good, To Great
Sep. 11, 2015, 12:57 PM
Jun. 22, 2015, 3:31 PM
- The major averages are having a solid day, with nearly all S&P sectors lit up green, but the REITs - eyeing a ten basis point pop higher in the 10-year Treasury yield - are lower across the board. Boosting rates is good news on Greek debt negotiations and a 4% rally in European stocks.
- The IYR is down 0.6%, bringing its loss YTD to 3%, about 600 basis points worse than the S&P 500.
- National Retail Properties (NNN -1.5%), Omega Healthcare (OHI -1.2%), Healthcare Trust of America (HTA -1.6%), Gramercy Property Trust (GPT -1.9%), W.P. Carey (WPC -1.4%), Simon Property (SPG -1%), Retail Properties of America (RPAI -1%), Public Storage (PSA -1%), Equity Commonwealth (EQC -1.6%), Strategic Hotels (BEE -1.4%), STAG Industrial (STAG -1.4%), Education Realty Trust (EDR -1.5%).
- ETFs: IYR, VNQ, DRN, URE, RQI, SCHH, ICF, SRS, RWR, RNP, JRS, KBWY, RFI, NRO, DRV, RIT, REK, RIF, FRI, FTY, PSR, DRA, FREL, WREI, IARAX
May 7, 2015, 11:58 AM
- Q1 normalized FFO of $72M or $0.55 per share vs. $61M and $0.51 one year ago.
- Portfolio consists of 154 properties and 42.8M square feet.
- Same-property NOI down 1% Y/Y, up 2.5% on a cash basis thanks to property tax refunds. G&A expense of $16.6M down from $24.9M.
- Same-property leasing percentage of 85.9% down 70 bps Y/Y.
- Leases of 1.478M square feet signed, with 720K square feet of new leases and 785K square feet of renewals.
- Cash rental rates on new and renewal leases were flat vs. the prior rates for same space. GAAP rental rate up 5.6%.
- Since quarter's end, company has 52 properties under sales agreements totaling more than 8M square feet and $750M. The plan is sell $2B-$3B of assets through 2017. Another 32 properties are currently on the block.
- Previously: Equity Commonwealth beats by $0.06, beats on revenue (May 6)
- EQC +4%
Apr. 14, 2015, 10:10 AM
Mar. 18, 2015, 3:28 PM
- The Fed earlier cuts its forecasts for GDP growth, inflation, and the pace of rate hikes. Alongside, it also lowered NAIRU - the level at which unemployment threatens accelerating inflation.
- The 10-year Treasury yield is lower by 13 basis points to 1.92% following the news, sending the board averages to near-1.5% gains, but the strongest names are the equity REITs.
- IYR +2.3%
- National Retail Properties (NNN +3%), Spirit Realty (SRC +3.1%), Senior Housing Properties (SNH +2.1%), Healthcare Trust of America (HTA +2.9%), Equity Commonwealth (EQC +2.7%), Gramercy Property (GPT +3.2%), Post Properties (PPS +3.9%), Aimco (AIV +2.6%), Kimco (KIM +2.8%), DDR Corp (DDR +2.4%), Public Storage (PSA +2%), Government Properties (GOV +1.9%), First Potomac Realty (FPO +3%), Digital Realty Trust (DLR +1.5%), Sunstone Hotel (SHO +2%), Liberty Property (LPT +2.4%), American Campus (ACC +2.5%)
- Previously: Day's biggest news: Fed sharply cuts "normal" unemployment rate (March 18)
- Previously: FOMC drops "patient," but sends dovish signal (March 18)
- ETFs: IYR, VNQ, DRN, URE, SRS, ICF, SCHH, RWR, KBWY, DRV, REK, FRI, FTY, PSR, WREI, FREL
Feb. 24, 2015, 3:32 PM
- The 10-year Treasury yield has tumbled back beneath 2% amid Janet Yellen's congressional testimony and some weak economic data, but there's no bid for income favorites like equity REITs.
- The iShares DJ U.S. Real Estate ETF (IYR -1.9%).
- Realty Income (O -2.9%), National Retail Properties (NNN -2.7%), Senior Housing Properties (SNH -2.2%), Ventas (VTR -3.8%), HCP (HCP -3.6%), Equity Commonwealth (EQC -2.3%), Vornado (VNO -1.9%), Equity Residential (EQR -2.5%), AvalonBay (AVB -2.7%), Simon Property (SPG -1.8%), General Growth (GGP -2.1%), Kimco (KIM -3%), Sovran Self Storage (SSS -2%), Boston Properties (BXP -2%), Hospitality Properties (HPT -2.7%), LaSalle Hotel (LHO -2.8%), Liberty Property Trust (LPT -2.7%), American Campus Communities (ACC -1.7%).
- ETFs: IYR, VNQ, DRN, URE, SRS, ICF, SCHH, RWR, KBWY, DRV, REK, FRI, FTY, PSR, WREI
Sep. 3, 2014, 10:49 AM
- Select Income REIT (SIR -1.1%) adds to yesterday's sharp decline as Bank of America downgrades to Underperform following SIR's deal to buy Cole Corporate Income Trust in a deal valued at about $3B.
- Cole shareholders will receive either $10.50 in cash of 0.36 shares of SIR for each share of Cole they own.
- The purchase would more than double Select Income's assets and enterprise value, and the company said the result should be a lower cost of capital and boosted shareholder value.
- Select Income is managed by the Portnoy family's RMR - the same team which was just ousted from CommonWealth REIT (now called Equity Commonwealth, ticker EQC) for maybe being too interested in boosting AUM at the expense of shareholder value.
Jul. 10, 2014, 7:33 AM
- The proceeds from the sale of its 22M shares in Select Income REIT should allow CommonWealth REIT (CWH) to pay down its $735M revolver, says Stifel, upgrading to Buy with $28.50 price target.
- Shares +6.9% premarket
- Previously: CommonWealth sells Select Income stake to Government Properties
Jul. 9, 2014, 4:13 PM
- Now under new management, CommonWealth REIT (CWH) sells its 22M shares of Select Income REIT (SIR) to Government Properties Income Trust (GOV) and Reit Management & Research (the Portnoys' management company) for $705M.
- GOV made the bulk of the purchase with 21.5M shares and RMR purchased the other 500K. Both GOV and SIR continue to be managed by RMR.
- CWH +6.1%, SIR -1.6% AH
Jun. 12, 2014, 10:27 AM
- "During the past five weeks, we have witnessed a sickening series of events unfold whereby the Select Income REIT (SIR +2.3%) trustees have deliberately taken multiple steps to protect their own interests at the expense of shareholders," writes Lakewood Capital, a 5.8% owner of the company. "We have spoken with several other significant SIR shareholders and they share our outrage."
- Lakewood demands an immediate cessation of further equity offerings, an expansion of the board, and the repurchase of stock from CommonWealth REIT (CWH -1.2%), Select Income's largest shareholder (and no longer under Portnoy control).
- The Select Income board and management notes receipt of the letter.
Mar. 19, 2014, 2:49 PM
Mar. 19, 2014, 7:11 AM
- Shareholders representing 81% of CommonWealth REIT (CWH) stock have voted to remove the company's board, according to Corvex and Related - the dissident investors leading the consent solicitation.
- The company, say the two, has five business days to have the consents inspected and results officially declared.
- Keith Meister and Jeff Blau: "The shareholders have exercised their rights and we look forward to working with the trustees in the coming days to arrange for an orderly transition process that best protects the interests of all shareholders."
- Shares gained 4.9% to $28.12 - a multi-year high - in after-hours trade last night.
Feb. 11, 2014, 3:55 PM
- Sam Zell throws his weight behind the move to throw out the management and board of CommonWealth REIT (CWH +2.2%), joining the slate of directors set to be nominated by dissident investors Corvex and Related. Joining alongside Zell is Zell Equity Group co-President David Helfand.
- Zell: "We are fully supportive of Corvex and Related's efforts to maximize value at CommonWealth for all shareholders. We see an attractive opportunity at CommonWealth uniquely suited to our expertise in leading public real estate companies and in turning around underperforming assets ... One of our core operating principals is the alignment of interests between company leadership and shareholders."
- Zell has agreed to become Chairman of the Board and Helfand CEO.
- Neither yet own any CommonWealth stock, but an entity associated with the two has been granted by Corvex and Related an option to buy up to about 4M shares.
Jan. 30, 2014, 11:46 AM
- "The Case For Change Now" is the title of a new Corvex and Related presentation urging the removal of the entire CommonWealth REIT (CWH +3%) board. The dissident investors see NAV of about $35 after the board exits and a stock price of about $40 by the end of 2015.
- "We believe there would be substantial 'low-hanging fruit' easily within the grasp of a properly incentivized management team," they say, and promise measurable progress quickly, but ask for 24-36 months for NOI to reach stabilization.
- "While dramatically different from CWH’s existing plan, these reforms are in our view self-evident to every informed investor and will make CWH look like virtually every other member of the S&P 500."
Nov. 19, 2013, 3:32 PM
- "We were probably a little late to the game on governance issues," says CommonWealth (CWH +3.8%) President Adam Portnoy after an arbitration panel handed dissident shareholders a big victory. "We didn't realize how big a deal it was to investors."
- Portnoy says governance changes made since the battle with Corvex and Related began have solved the issues which led to the dispute in the first place. "They got 70% of shareholders to sign a card. We realized that was a problem. That is what led us to go out and talk to our whole shareholder base ... We've checked a lot of boxes. It's very hard for investors to criticize us anymore on the governance side." Maybe not. "We firmly believe it is a foregone conclusion that shareholders will take back CommonWealth," say Corvex's Keith Meister and Related's Jeff Blau.
Nov. 19, 2013, 9:40 AM
- Commonwealth REIT (CWH +5.5%) has its tail in the air at the open after an arbitration panel rules the consent solicitation by Corvex and Related aiming to boot the board is invalid (bad), but a new effort - under guidelines established by the panel - may move forward (good). "Corvex and Related will expeditiously notify CommonWealth ... of their intent to pursue a new solicitation and promptly file a preliminary consent solicitation statement with the SEC."
- Corvex's Meister and Related's Blau: "With the path cleared by the Panel's decision, we firmly believe it is a foregone conclusion that shareholders will take back CommonWealth."
Equity Commonwealth operates as a real estate investment trust. It engages in the ownership and operation of real estate, including office and industrial buildings and leased industrial land. It operates through the following segments: Central Business District and Suburban Office Properties.... More
Industry: REIT - Office
Country: United States
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