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REITs- Why are they priced so low?


DavidVY
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My family owns rental (commercial) property in Los Angeles and cap rates are been squeezed down to nothing (2-4%)

 

By contrast you can buy 5-7% out of state but in little podunk towns w/triple net leases.

 

Then the stock market multiple REITs selling at 10-11x AFFO and around 5-7% dividend.

 

I've been holding VER (ARCP formerly. All properties verified and 99% occupancy. It sells abt 10-11x AFFO and has a 7% dividend. This stock i understand why its low (Nick Schorsh legacy, lawsuit hanging over company etc)

 

Then you have KIM (kimco) selling at 11x AFFO, 7% dividend. 95%+ occupancy. Has positioned itself as Amazon resistant.

 

What is contributing to such a big pricing/yield gap between private transactions and public REIT transactions?

 

REITS historical undeperformance against sp500 index?

Hot money flying toward tech stocks?

REITs too boring?

Amazon?

 

Curious to see what the board thinks....

 

 

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I've been wondering this too...

 

In my area...prices & cap rates for commercial real estate is all over the board.  One trend is very clear, prices are going UP, cap rates are going DOWN.

 

HOWEVER, when I look at some properties and discuss them with the broker, I'll query as to why I should pay the asking price when I can get 7-8-9-10 in REIT's.  The REIT's are almost 100% passive investments on top of that.  Why should I buy your listed property for a 4.5% cap rate?

 

The broker then kind of gets of gets silent, shuffles their feet, looks at the floor, "yea, I know"...Almost like a kid that has been caught cheating on a test or homework assignment.  They then suggest that the owner is "open to reasonable offers".

 

I think that LISTED properties will have the broker pressuring the owner to list it at "top dollar" and see if they can get it.  The brokers are always trying to push prices higher.  There is a LOT of stupid money out there.  If they get top dollar, GREAT!  If not, they can always lower the price in a few months?

 

HOWEVER, if you list the property just too high...nobody might not even make an offer on it, AND you've wasted MONTHS of your time.

 

 

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A wealthy, private individual who NEEDS to invest $20-50-100m in RE might prefer a private investment over a public one. The beauty of being a private investor is that there's no mark-to-market. So while the adviser for that wealthy, private individual might get anxious with public share prices declining, it's all smooth sailing with the "absolute returns" of a private RE investment (that is, until they need to sell it at lower prices).

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Guest Cameron

I've been looking at the space  the last 2 days because of their drop recently. mREITS have been hit hard because of the flattening of the yield curve. I have no idea why the apartment REITS have dropped so much considering the tax bill is anti homeownership. The only thing I can think of is that, as has already been said, higher interest rates mean higher cap rates and thus lower property values so the market is adjusting to potentially lower book values and TBV for some of these, but by the looks of it some are already trading as if we get to 4% this year.

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Tax changes - there is an interest rate cap (30% of EBITDA is delectable) that REITs are able to use for a tax shield..... The rule changes their business model quite a bit since they have to return income to shareholders and typically use debt to grow. 

 

I don't really invest in REITs, so there may be other factors.... This is likely one though. 

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Guest Cameron

Tax changes - there is an interest rate cap (30% of EBITDA is delectable) that REITs are able to use for a tax shield..... The rule changes their business model quite a bit since they have to return income to shareholders and typically use debt to grow. 

 

I don't really invest in REITs, so there may be other factors.... This is likely one though.

 

I'm not sure I follow? REITS don't pay taxes at the corp level.

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I've been wondering this too...

 

In my area...prices & cap rates for commercial real estate is all over the board.  One trend is very clear, prices are going UP, cap rates are going DOWN.

 

HOWEVER, when I look at some properties and discuss them with the broker, I'll query as to why I should pay the asking price when I can get 7-8-9-10 in REIT's.  The REIT's are almost 100% passive investments on top of that.  Why should I buy your listed property for a 4.5% cap rate?

 

The broker then kind of gets of gets silent, shuffles their feet, looks at the floor, "yea, I know"...Almost like a kid that has been caught cheating on a test or homework assignment.  They then suggest that the owner is "open to reasonable offers".

 

I think that LISTED properties will have the broker pressuring the owner to list it at "top dollar" and see if they can get it.  The brokers are always trying to push prices higher.  There is a LOT of stupid money out there.  If they get top dollar, GREAT!  If not, they can always lower the price in a few months?

 

HOWEVER, if you list the property just too high...nobody might not even make an offer on it, AND you've wasted MONTHS of your time.

 

I like your writing style.  Professional wordsmith.  A 4.5 cap rate would imply a very high quality property. With minimal ways to value add. Except pricing power down the road.  A person not in the public domain once told me " In the real estate game you focus on the lowest of the low end or the luxury end. No middle ever!"  That said, its all relative to the market. Low end in LA might be luxury in the heartland. Its either distressed in a good location and having a creative idea to increase earning power or just buy luxury and golf. Why are reits so low? I dont' know. On paper reits seem like a better alternative.

 

 

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Interesting.  I've been looking around but kind of think most of the impacts are due to retail exposure.

 

But I guess VNQ is now yielding 4.5% and like SLG green is trading a like a 15 P/FFO, so I see your point on a 4.5% cap rate.  Maybe you are seeing a lag in pricing adjustments.

 

I own some VER too, but the retail exposure, ton o' red lobsters, history of fraud (granted former management), and looming litigation are going to scare off most.  Even like the WAG and CVS exposures would scare some people with Badmazon thought to be coming.

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I've spent quite a bit of time looking at retail REITS - the largest reason that these are cheap, I believe, is the market believes the internet renders these properties much less valuable.

 

Probably a lot of truth to that - I certainly hate going shopping and have most things delivered today.  However, I'm of the opinion that this spells opportunity.  My local regional mall has several high-end restaurants that are as busy as ever.  They are adding a high end gym.  Who knows how else the space will be used. 

 

REITs in general are also impacted by concerns over rising rates and what that will do to cap rates.  Interestingly, TIAA Cref had a paper you can search for detailing how this isn't as highly correlated as is perceived.  Rising rates will certainly be a headwind, but isn't that the case for all asset classes?  Real estate can readily pass on inflation via rent increases and property value, is that so much of a concern for high quality sites with strong demand?

 

 

 

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While rising rates have been blamed for REITs awful relative performance in 2018 (-10% VNQ versus SPY), I think that there are also more fundamental concerns with respect to the supply / demand picture across other than retail. The manhattan office market is definitely weakening, multi-family has been on a many years construction boom and anecdotally rent growth is stalling there (at least in the yuppy haunts where I and my friends roam), skilled nursing/healthcare seems to be undergoing distress (I don't know much about this, just inferring from securities prices).

 

I like FCE;  it will be sold. News a few months ago that EQC would buy. NEws out today that brookfield will buy, but not for a big premium. I think it gets taken out in the high 20's. Small position w/ costs of $19.40 / share though, not sure if I'd buy it post B-field bump (ya ya I know everyday you aren't selling you're buying).

 

I like EQC. It is not at a discount to intrinsic value (99% of my estimated NAV), 81% of market cap in cash. More or less Sam Zell SPAC. Optionality on negative turn in cycle and/or deal before turn in cycle.

 

I like the 7 1/8% cumulative Colony Northstar preferreds @ 91.63, 9.45% yield to the 2022 call, 7.8% yield on a perpetual basis. I think (but am not so sure) the equity may be very cheap,  but have far more conviction that the equity is not a zero and the prefs are money good. Baupost and Abrams in the common adds some level of comfort as well.

 

I like FRPH as a well run underlevered owner of blah industrial real estate, aggregates reserves royalties, and 1 important building in SE DC w/ some additional development optionality. My cost is significantly lower than current px and don't think it's that cheap from here, but it's a good company. Rhizome knows this company better than anyone so search for his stuff.

 

I think VNO is starting to get interesting. Potential takeout by the likes of Blackstone or sovereign wealth as Mr. Roth ages. Stripped down to NYC (plus merch mart and the san fran bulding) makes for a nice clean pure play NYC company and it's cheapened a fair bit. JBGS spin didn't help.

 

I like the NYRT stub, just as highly levered illiquid beta, to be owned in small size.

 

I am drawn like a moth to a flame to CBL, but hold myself back. wouldn't be surprised if 2-3x, wouldn't be surprised if 0.

 

I am waiting for ILPT to decrease in price. IPO range was $26-$28, priced at $24.75, trading at $22.60 It trades at a significant discount to intrinsic value (i see it at about a 6.5-7% cap rate when a substantial portion of assets are really nice hawaiin industrial ground leases with high escalators, great occupancy and high barriers to entry), but deserves it because Portnoys suck. At a price, I want to own it. The hawaii ground lease assets are great and the company is virtually unlevered. Capital allocation will suck. Likewise w/ SIR.

 

Brixmor is at an 8 cap and rising for myeh grocery anchored strip centers. I recently took a hard look when stock at $19 and thought "myeh" and now at $16. In doing some google earthing and rilling into where exactly their properties were, I jsut wasn't that impressed. Kimco kind of similar thoughts.

 

In general, I think discounts to private market value are to be had, but there are real risks out there as well in terms of supply/demand imbalance (rent/fundamentals etc.) developing and rising rates, so I limit overall exposure.

 

 

 

 

 

 

 

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@thepupil probably the best post on the board for awhile. Thanks! I agree with you on pretty much all of these, and am long FRPH and NYRT for the same reasons.

 

I wish the Hawaiian ground leases were separate and not run by someone who will do a bad job. Honestly a bank trustee to cash cheques and send dividends would be enough. Under those circumstances I would allocate huge there at anything over 4% cap. That's a generational wealth asset.

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I've been wondering this too...

 

In my area...prices & cap rates for commercial real estate is all over the board.  One trend is very clear, prices are going UP, cap rates are going DOWN.

 

HOWEVER, when I look at some properties and discuss them with the broker, I'll query as to why I should pay the asking price when I can get 7-8-9-10 in REIT's.  The REIT's are almost 100% passive investments on top of that.  Why should I buy your listed property for a 4.5% cap rate?

 

The broker then kind of gets of gets silent, shuffles their feet, looks at the floor, "yea, I know"...Almost like a kid that has been caught cheating on a test or homework assignment.  They then suggest that the owner is "open to reasonable offers".

 

I think that LISTED properties will have the broker pressuring the owner to list it at "top dollar" and see if they can get it.  The brokers are always trying to push prices higher.  There is a LOT of stupid money out there.  If they get top dollar, GREAT!  If not, they can always lower the price in a few months?

 

HOWEVER, if you list the property just too high...nobody might not even make an offer on it, AND you've wasted MONTHS of your time.

 

I like your writing style.  Professional wordsmith.  A 4.5 cap rate would imply a very high quality property. With minimal ways to value add. Except pricing power down the road.  A person not in the public domain once told me " In the real estate game you focus on the lowest of the low end or the luxury end. No middle ever!"  That said, its all relative to the market. Low end in LA might be luxury in the heartland. Its either distressed in a good location and having a creative idea to increase earning power or just buy luxury and golf. Why are reits so low? I dont' know. On paper reits seem like a better alternative.

 

Premfan, I've been called a lot of things over the years, ESPECIALLY by irate ex-girlfriends!  A "professional wordsmith" has never been one of them!  Thank you!  That made my afternoon...

 

I go far & wide and look at all sorts of different and unusual stuff....some things better than others....HOWEVER, I am not generally looking at "A" properties.  Some of them might arguably be "B" properties...but in reality most of them would probably be "C" or even lower yet!  As time passes, I am generally moving "up the food chain" and getting into better quality properties. 

 

One thing I notice is that a lot of realtors do NOT act or conduct business in a very professional manner.  Obviously, some do, and some are true experts...but I think that business tends to attract a lot of part timers...and you can tell who those are pretty quick.

 

Now that I think of it...I have only purchased one property with an agent/broker.  All the other transaction have been seller/buyer.  Also, most of my transactions have been "non-listed" properties.  I go where the bargains are, and they sure ain't on the MLS or LoopNet!

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While we're on the topic... Anyone here follow/like Gramercy (GPT)?  I've been in it since the recovery from the CDO days, so I'm sitting on a big gain.  But I like the space they're in and I've been so impressed by management that I've kind of put it in a corner of the portfolio and not paid much attention for a while.  Currently down substantially from its highs.

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While we're on the topic... Anyone here follow/like Gramercy (GPT)?  I've been in it since the recovery from the CDO days, so I'm sitting on a big gain.  But I like the space they're in and I've been so impressed by management that I've kind of put it in a corner of the portfolio and not paid much attention for a while.  Currently down substantially from its highs.

 

Yeah, I'm following it.  Seems kind of cheap, so I've been trying to figure out why.  I guess on their last call they said their leverage is a little higher than they want (like almost 1 turn of EBITDA) and they are planning to reduce by selling more Chambers Street properties, right?  But there was some mention of "raising capital."  I guess maybe people don't like having to continue the "transition" from chambers street/office exposure in a deteriorating environment (they are still like 45% exposed to office, I think, and it ain't trophy stuff in manhattan).

 

Also seems like they keep issuing stock either when it pops up or via upreit acquisitions, but I guess most REITs do that.  Hate to get diluted as part of the ongoing business model. That's probably why I'm only long EQC and VER (though VER did dump some stock on us as soon as the equity got to nicely valued).

 

I am charmed by management and they seem to be starting to think about being defensive;  for example, talking about how it is late cycle and there is a lot of supply coming to market in last q call.

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thepupil or anyone else:

 

Any thoughts on iStar?  It's a non-dividend paying REIT that's using NOLs to avoid tax.  There's a decent argument that it's trading for ~50% of asset value, but it has a large amount of "transitional" and "development" assets left over from the crisis that are currently generating costs but little to no NOI.  G&A is also running ~$70-75 million a year, and it's unclear to me how much of that could be cut out once the "transitional" and "development" assets are turned over into real estate finance and triple net lease assets. 

 

Today it's basically cash flow breakeven if you put aside asset sales.  The future is hazy, but you can see an outcome in which the current capital structure produces ~$125-150 million in pre-tax cash flow.  The current market cap is ~$720 million.

 

Much more detailed writeup that's over a year old is here:  http://clarkstreetvalue.blogspot.com/2016/08/istar-non-dividend-paying-reit-with.html

 

I put the basic math behind the ~$125-150 million pre-tax cash flow in one of the comments to the blog post linked to above.

 

One major update to the blog post is that last year iStar IPO'd its ground leases into a dividend-paying vehicle called Safety Income & Growth (SAFE).  It currently has 40% ownership of SAFE and a contract to manage the assets.

 

Finally, I'm not sure about management -- will Sugarman stick to the basic blocking and tackling of running a real estate finance and triple net lease business?  Will he shrink the balance sheet if that's the right thing to do (they have been buying back shares)? Also, is now the right time to be trying to recycle ~$1.5-2 billion in capital into real estate finance and triple net leases?

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thepupil or anyone else:

 

Any thoughts on iStar?  It's a non-dividend paying REIT that's using NOLs to avoid tax.  There's a decent argument that it's trading for ~50% of asset value, but it has a large amount of "transitional" and "development" assets left over from the crisis that are currently generating costs but little to no NOI.  G&A is also running ~$70-75 million a year, and it's unclear to me how much of that could be cut out once the "transitional" and "development" assets are turned over into real estate finance and triple net lease assets. 

 

Today it's basically cash flow breakeven if you put aside asset sales.  The future is hazy, but you can see an outcome in which the current capital structure produces ~$125-150 million in pre-tax cash flow.  The current market cap is ~$720 million.

 

Much more detailed writeup that's over a year old is here:  http://clarkstreetvalue.blogspot.com/2016/08/istar-non-dividend-paying-reit-with.html

 

I put the basic math behind the ~$125-150 million pre-tax cash flow in one of the comments to the blog post linked to above.

 

One major update to the blog post is that last year iStar IPO'd its ground leases into a dividend-paying vehicle called Safety Income & Growth (SAFE).  It currently has 40% ownership of SAFE and a contract to manage the assets.

 

Finally, I'm not sure about management -- will Sugarman stick to the basic blocking and tackling of running a real estate finance and triple net lease business?  Will he shrink the balance sheet if that's the right thing to do (they have been buying back shares)? Also, is now the right time to be trying to recycle ~$1.5-2 billion in capital into real estate finance and triple net leases?

 

I own some shares of iStar... it's an interesting asset recycling idea...

 

My biggest concern is that they've made little/no real progress on winding down these land/development assets ($965m in 2013 and $933m today). The idea is that if they sold all these non-core/non-cash-generating properties and rolled it all into the RE finance/net lease business they could generate some $1-2+ in FFO per share.

 

I plan to give them a bit more time to execute on this but the portfolio hasn't really been simplifying as fast as it could. The timing isn't going to get a whole lot better to start unloading some of these things.

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thepupil or anyone else:

 

Any thoughts on iStar?  It's a non-dividend paying REIT that's using NOLs to avoid tax.  There's a decent argument that it's trading for ~50% of asset value, but it has a large amount of "transitional" and "development" assets left over from the crisis that are currently generating costs but little to no NOI.  G&A is also running ~$70-75 million a year, and it's unclear to me how much of that could be cut out once the "transitional" and "development" assets are turned over into real estate finance and triple net lease assets. 

 

Today it's basically cash flow breakeven if you put aside asset sales.  The future is hazy, but you can see an outcome in which the current capital structure produces ~$125-150 million in pre-tax cash flow.  The current market cap is ~$720 million.

 

Much more detailed writeup that's over a year old is here:  http://clarkstreetvalue.blogspot.com/2016/08/istar-non-dividend-paying-reit-with.html

 

I put the basic math behind the ~$125-150 million pre-tax cash flow in one of the comments to the blog post linked to above.

 

One major update to the blog post is that last year iStar IPO'd its ground leases into a dividend-paying vehicle called Safety Income & Growth (SAFE).  It currently has 40% ownership of SAFE and a contract to manage the assets.

 

Finally, I'm not sure about management -- will Sugarman stick to the basic blocking and tackling of running a real estate finance and triple net lease business?  Will he shrink the balance sheet if that's the right thing to do (they have been buying back shares)? Also, is now the right time to be trying to recycle ~$1.5-2 billion in capital into real estate finance and triple net leases?

 

I own some shares of iStar... it's an interesting asset recycling idea...

 

My biggest concern is that they've made little/no real progress on winding down these land/development assets ($965m in 2013 and $933m today). The idea is that if they sold all these non-core/non-cash-generating properties and rolled it all into the RE finance/net lease business they could generate some $1-2+ in FFO per share.

 

I plan to give them a bit more time to execute on this but the portfolio hasn't really been simplifying as fast as it could. The timing isn't going to get a whole lot better to start unloading some of these things.

 

Yes, I have similar concerns.  I created a thread for iStar in the Investment Ideas section. 

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My family owns rental (commercial) property in Los Angeles and cap rates are been squeezed down to nothing (2-4%)

 

By contrast you can buy 5-7% out of state but in little podunk towns w/triple net leases.

 

Then the stock market multiple REITs selling at 10-11x AFFO and around 5-7% dividend.

 

I've been holding VER (ARCP formerly. All properties verified and 99% occupancy. It sells abt 10-11x AFFO and has a 7% dividend. This stock i understand why its low (Nick Schorsh legacy, lawsuit hanging over company etc)

 

Then you have KIM (kimco) selling at 11x AFFO, 7% dividend. 95%+ occupancy. Has positioned itself as Amazon resistant.

 

What is contributing to such a big pricing/yield gap between private transactions and public REIT transactions?

 

REITS historical undeperformance against sp500 index?

Hot money flying toward tech stocks?

REITs too boring?

Amazon?

 

Curious to see what the board thinks....

 

I've written a bit about my experience in the last 10-15 years about figuring out "paying up for quality".  In short, the NYC and CA assets are higher on the quality spectrum and they rightfully deserve a lower cap rate.  Although, I disagree that you should pay 2% for anything. 4% is on the expensive side of reasonable for CA in my humble opinion.  Often time when you buy a high yield in the middle of lower, you're paying for the long term lease, you're not paying for the dirt and the replacement value.  If the existing tenant leaves upon lease maturity, you oftentimes can't get a similar tenant.  This is especially true in a smaller market where your building maybe 5% of the market. 

 

I personally think that interest rate risk is very real.  Assume you have a REIT that is 50% LTV, due to low interest rates, it trades at a 4% dividend yield.  Bc of higher rates, people demand a 5% yield. Two things will happen, first the cost of debt capital will go up when the debt matures.  Second, people now demand a higher dividend yield.  Third, the bank may want to maintain a 50% LTV but the value of the assets have moved against the REIT.  So, the REIT may have to put up more capital.  All of these factors makes levered REITs a really good investment when interest rates drop but terrible one when rates increase.  I am convince that this applies for companies trading at 20 P/FCF with substantial debt on them as well.  Unless you're a REIT that can grow out of these issues, you're going to have some tough going ahead.  We own FRPH and we know that FRPH will face some cap rate expansion headwind, but the FFO will be minimally impacted due to higher interest rate cost.  We own some LAACOs as well.  It is a severely under followed and under discussed name in Southern California and San Diego trading at 7.5-8.0% cap rate plus a free Downtown LA building.  The amount of debt is roughly $50mm versus a private market value that is in the 6-700mm range. 

 

Just to walk through that 50% LTV REIT excercise (this exercise applies to privately owned assets as well) - F

$1.0 bn asset with 50% LTV with 6% cap rate

$60mm in NOI less $10mm in G&A equates to $50mm in EBITDA

$500mm of debt at 4% equates to $20mm of interest expense

This equates to roughly $30mm of FFO and we assume 80% payout which equates to $24mm at 4% dividend yields a market cap of $600mm

 

Now that interest rate is 1% higher

Still $50mm of EBITDA because the assets still generate the same cashflow

$500mm of debt at 5% equates to $25mm of interest expenese

This equates to roughly $25mm of FFO and we still assume 80% payout which equates to $20mm at a 5% dividend yields a market cap of $400mm

 

This is how a 50% LTV REIT can logically lose 33% of its value in a 1% movement in interest rate.  This is also the reason why I've avoided RE companies with a lot of leverage.  FRPH and LAACO both have leverage below 10% of their private market value.  FRPH has non-recourse leverage at one of its multi-family building in DC, but that's a 10 year fixed mortgage.  So we view that a little differently. 

 

We've held a lot of cash because in a world where 3-4% interest rate is normal and cap rates in the 3-5% is normal for certain type of assets, a 100 bps movement is seismic.  This applies to both real estate and anything that trades at 20x FCF or higher.         

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  • 1 month later...

I forgot to mention that having control is very real unless you know that the CEO and Chairman have aligned interest.

 

Trying to look at KRG, KIM, BRX, RPT, REG, and STOR this weekend, with a view to tying to figure out who has best combination of shareholder/management alignment of interest, exposure to neighborhood centers and grocers, and lowest leverage. 

 

I have kind of decided to consider a bet that people will still go to neighborhood/convenience/grocery retail and/or that much of the properties can be converted to show-rooming space with attendant warehouse for catalog, I mean e-commerce fulfillment.

 

I bought some GPT @~ $23, but I think I made a mistake after listening to last CC.  They guided for no growth/slight FFO "shrinkage;" spoke with great certainty about what their cost of capital is; said it was high and basically would preclude growth; yet they weren't interested in a buyback; also they were issuing shares at ~$29 a few months back; indicated a plan to de-lever and"recycle capital" by selling higher yielding office and retail (e.g., gyms) and buying more (lower cap rate) warehouse, if any excess proceeds.  Then they talked about how the cycle was getting late in warehouse and it was time to focus on quality (the lowest cap rates in a hot sector).

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Couple of points around REITs

 

Timeframes and interest rates. High quality office buildings, industrial, etc. generally have much longer and more reliable periods of CF generation. We know from duration (bond math) that the longer the period of CF generation, the more impact a change in interest rate has.

 

Malls. Most malls are struggling; highest/best use of the land is to knock them down, & replace with office/apartments/condos. But execution means near term writedown/demolitiion/construction costs, and new supply making it more difficult to raise market rents in the office/apartments/condo markets. The capital will come from banks, but the debt-service until the new asset starts generating - comes from existing near/medium term FCF. Less FCF to PV = lower valuation.

 

Technology. More folks working from home, and the expected advent of blockchain technology, will materially reduce the amount of office space needed to house employees. In the near/medium term it will primarily affect financial services, and the demand for office space in those locations where financial services are concentrated - much of which is preferred REIT investment. A large FI could fairly easily reduce its existing space requirements by 1/3 to 1/2; and FI''s would also have incentive to rapidly follow each other, to force rents on the remaining space as low as possible. Higher vacancy rates = less FCF = lower valuation.

 

Alternatives. For a long time, with the very limited national investment in infrastructure; RE has been the next best alternative. Today, infrastructure opportunities are both competitive and more widely available, diverting some of the capital flow away from the RE sector. Less demand for a REIT unit = a lower price for it.

 

Cap rates. Ultimately the uncertainty/disruption produces a cap rate premium over the market rate, and REIT's end up looking like 'bargains' (relative to comparable bonds) for John and Jane fixed income investor. But not until the current price of REITs drop quite a bit from where they are today.

 

SD

 

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