stc1

REITs: An Update

Thanks for the response Toro. I do a similar analysis, using the entire equity REIT universe (no mortgage REITs, no timber), adding in the small caps and new issues that don't show up in IYR but taking out the special situations, like MPG, MSW and PPS (for now), that do. Also, I don't use market cap weighting like IYR, which obviously skews both the yield and the multiple, just simple equal weights. That said, my FFO multiple calc is much higher, at 13.1x; my yield though is also higher at 5.6%. Where do you get the S&P FFO number? Thanks again for the analysis and response.

P.S. Larry, I'd avoid MPG. It's in serious trouble with the refi of its acquisition debt and will likely be broken up or sold on unattractive terms.

REITs: An Update

Hey Toro -

Can you provide the sources for your info, most pertitently, your FFO estimates for the IYR and S&P 500, as well as your yield calc for the IYR. These don't gibe at all with what I have. I am long SRS as well, but more as a hedge for my REIT longs (DLR, ARE, DDR, OFC, EXR, OHI, EPR, SKT, VTR, PLD, GGP, SLG, AHT, SHO, NRF) than as a bet against REITs in general. It seemed from your earlier posts that you recognized that IYR is a pretty poor proxy for REITs in general (which I agree with), yet you keep referring to it as a benchmark. I understand if what yo uhave is proprietary, just want to get an idea of where your analysis is coming from. Thanks.