Wed, Jan. 21, 3:14 PM
- Equity REITs had a nice run after bond yields peaked last year and began declining, but, says a now-cautious John Authers from the FT, that rally has turned into a stampede. And while the U.S. has led the way, U.K., European, and global REIT indexes have also had big gains.
- Since October, the S&P 500 REITs index is up 19% vs. 1.4% for the S&P 500, and a 22.5% loss for the Alerian index of MLPs.
- Valuation has now become a concern, with every REIT sector covered by SNL Securities trading at a premium to NAV (not the mortgage REITs though). Healthcare REITs - HCP, MPW, HTA, UHT, LTC, SBRA, OHI, HCN come to mind - are at a 25% premium.
- SNL's Jason Lail dismissed some concerns, noting REITs trade at a 12.% premium to NAV, well within the 20% above and below NAV they typically range between. Also, fundamentals remain sound, with supply still constricted in many areas.
- JPMorgan's Jason Ko notes pockets of value, particularly office REITs which trade a minimal premium. Boston Properties (BXP -0.1%) is a particular favorite. Others in the sector include: EQC, WRE, CSG, FPO, HIW.
- Simon Property (SPG +0.2%) is Ko's biggest holding as mall bankruptcies and chain closings should leave the survivors stronger. His 2nd-largest holding is industrial player ProLogis (PLD +0.2%).
- ETFs: IYR, VNQ, WPS, VNQI, DRN, RWX, URE, SRS, ICF, SCHH, RWR, RWO, IFGL, KBWY, DRV, DRW, REK, FRI, GRI, IFEU, FTY, FFR, RWXL, PSR, IFNA, WREI, REET
Wed, Jan. 14, 7:04 AM
- Select Income REIT (NYSE:SIR) becomes the next Portnoy vehicle to be targeted by an activist as Lakewood Capital Management - an owner of 6.8% of the company - believes the stock to be conservatively worth 30-70% more than current levels. The current underpricing and dramatic underperformance, says Lakewood, is due to "widely-held concerns around corporate governance."
- Lakewood's presentation
- Equity Commonwealth (NYSE:EQC) shareholders have been through the drill and will also take notice.
Dec. 8, 2014, 1:08 PM| 1 Comment
Nov. 3, 2014, 6:28 PM
- Normalized FFO of $57.3M or $0.44 per share vs. $63.7M and $0.54 one year ago. Normalized FFO excludes the $171.8M or $1.33 per share gain from the sale of Select Income REIT.
- Overall portfolio 85.9% leased vs. 86.7% in Q2, 86.8% a year ago. Cash rental rates on new and renewal leases down 2.8% from prior rates. Same-property NOI up 5.1% Y/Y. Same-property cash NOI up 7% thanks to the settlement of litigation with a former tenant.
- No common dividends expected for the rest of this year as new management focuses on improving the value of the portfolio. The new team assumed total control of company operations from RMR on October 1.
- Shareholders approved maximum payment of $33.5M to Related/Corvex to cover their consent solicitation costs. About $16.7M was paid in Q3, and the remaining payments are contingent on average closing share price of $26 in 2015 and 2016.
- Conference call tomorrow at 10:30 ET
- Previously: Equity Commonwealth misses by $0.12, beats on revenue
- EQC flat after-hours
Nov. 3, 2014, 5:39 PM| Comment!
Nov. 2, 2014, 5:35 PM
- ACXM, AEIS, AGU, AIG, AMTG, ANV, APL, BDE, BKH, CHGG, CKP, CRK, CUTR, CVD, CXW, CYH, DXPE, EGAN, ELNK, ENH, EOX, EPAM, EQC, FN, FTR, GALE, GRT, GTY, HLF, IART, ININ, KAMN, KBR, LCI, MCEP, MDU, MR, MRO, NBIX, NLS, NOR, NTRI, OGS, OTTR, PKT, PL, PLOW, PQ, QLYS, RBC, REG, RKT, RKUS, RLD, RTEC, SALE, SBRA, SGY, SKH, SNHY, SRC, SSW, SUP, TDW, THC, TXRH, VNO, VNR, WTR, Y
Oct. 2, 2014, 12:50 PM| Comment!
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.
Aug. 5, 2014, 6:47 PM
- Equity Commonwealth (NYSE:EQC): Q2 FFO of $0.68 beats by $0.10.
- Revenue of $215.19M (-17.9% Y/Y) misses by $1.29M.
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.
- Source: Press Release
- CWH +6.1%, SIR -1.6% AH
Jul. 8, 2014, 4:32 PM
Jun. 17, 2014, 7:31 AM
- The new board (headed by Sam Zell) at CommonWealth REIT (CWH) gets busy, hiring CBRE (CBG) as sub-manager for each of the company's properties. CBRE will provide customary management services, and additionally provide project management services as needed.
- The two are currently targeting October 1 as CBRE's start date.
- REIT Management & Research (RMR) - run by the no-longer-in-power at CommonWealth Portnoy family - is the current property management provider.
- SEC Form 8-K
Jun. 13, 2014, 7:26 AM
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.
May. 23, 2014, 11:12 AM
- Corvex and Related announce their entire slate of nominees has been elected to serve on the CommonWealth REIT (CWH +0.5%) board, getting about 85% of the votes.
- "Today is a historic milestone for CommonWealth and the REIT industry, and a tremendous victory for shareholder rights," says the two investors.
- Source: Press Release
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