Personal consumption jumps in August: We are spending money again!
Personal income is the income a person receives from all sources. This includes wages and salaries, government transfer payments, other labor income, proprietor’s income, and rental income.
Simon Property Sends a Bear Hug Letter to Macerich
Simon Property (SPG) has proposed to buy Macerich (MAC) for $91 a share, half of which will be cash and half of which will be SPG stock at a fixed ratio.
Mortgage Applications Rose, Volatility Continued in January
According to the MBA (Mortgage Bankers Association) survey, mortgage applications rose by 8.8% for the week ending January 22.
Background on Macerich
Macerich is in the second tier of large retail REITs. It’s a player in the community or power shopping center segment, along with Kimco Realty (KIM).
Consumer Sentiment Lifts In December
The performance of tenants is a critical driver of vacancy rates and returns. While mall REITs aren’t directly exposed to consumer spending, consumer spending is still a critical driver.
Will Simon Property Group Repeat Its Stellar 3Q15 Performance?
Simon Property Group’s healthy revenue growth in 3Q15 was primarily driven by the rise in total sales per square foot and the base minimum rent.
Simon Property increases funds from operations and keeps dividend
Occupancy percentage increased to 96.5% from 95.1% a year ago—an increase of 140 basis points.
GGP and Other Retail REITs Struggle to Exist in Digital Era
During 1Q17, General Growth Properties’ (GGP) occupancy rate (same-store leased percentage) fell to 95.9% from 96.6% in 1Q16.
Personal incomes increase, but look beyond the headline number
Personal income increased $47.7 billion, or 0.3%, to reach $14.4 trillion in February 2014. Disposable personal income (or DPI) increased $40.3 billion, or 0.3%, from January.
How Does GGP Manage Its Balance Sheet?
GGP reached a debt-to-equity ratio 2.2x in 2014, its highest in the last five years.
How GGP Managed Its Expenses in 2Q17
In 2Q17, GGP (GGP) reported NOI (net operating income) of $551.0 million, which came in higher than the previous year at $554.0 million.
An Informative Glance at Macerich’s Top Tenants
Macerich’s centers derived approximately 74% of their total rent for fiscal 2014 from mall stores and freestanding stores under 10,000 square feet.
Background on Simon Property Group
Simon Property Group also has a large international presence. It owns premium outlets in Japan, South Korea, Malaysia, and Mexico.
How to Invest in General Growth Properties through ETFs
General Growth Properties has a market cap of $22.1 billion, is part of S&P 500 index, and sees allocation in the major REIT-specific ETFs like ICF.
Ackman increased Pershing’s stake in Howard Hughes Corporation
An amended 13D filing earlier this month revealed that activist investor Bill Ackman’s hedge fund, Pershing Square Capital, increased its stake in Howard Hughes Corporation.
Must-know: Simon Property Group continues to build its portfolio
The U.S. malls and shopping centers account for roughly 80% of Simon Property Group’s net operating income. During the fourth quarter, the company saw a number of important developments.
Assessing Macerich’s Robust Revenue Growth in Fiscal 2014
Macerich reported a consolidated revenue of $1.1 billion in 2014—a figure up by 7.4% over 2013. In 2013, its revenue growth was a whopping 29.1% over 2012.
How Rising Interest Rates Could Affect Equity Residential
The Fed indicated that it could implement two more rate hikes in 2017. The market speculates one of the rate hikes could occur in June, and the other one is expected to occur around December 2017.
Why personal income growth of 0.3% isn’t enough for REITs like CBL
Increases in personal income drive consumption, which accounts for roughly 70% of the U.S. economy. Personal incomes dropped precipitously during the Great Recession.
Does Falling Gas Mean A Merry Christmas For Retailers?
At the end of the day, consumers don’t start spending after recessions because they want to. They do it because they have to.
Simon Property to Continue with Expansion Plan to Drive Growth
In its second-quarter 2018 earnings conference call, Simon Property (SPG) stated that it will continue investing in the redevelopment and expansion of its properties.
Rental and Leasing Activity Drove Simon Property’s Q2 Revenues
Simon Property (SPG) has reported five consecutive quarters of upbeat top-line performances.
Industrial Demand, Diversified Tenants to Aid Realty Income’s Q2
Realty Income (O) is scheduled to report its Q2 results on August 1. Analysts expect AFFO (adjusted funds from operations) of $0.79.
Will Expansion Plans Help Simon Property Drive Mall Traffic?
Simon Property Group (SPG) has been putting a lot of focus on the redevelopment and expansion of its properties.
Will Sales-Boosting Initiatives Drive Simon Property’s Q2 2018?
Simon Property Group is undertaking omni-channel retailing and portfolio-restructuring initiatives to maintain traffic amid the retail crisis.
What Do Wall Street Analysts Think of SPG?
Analysts gave SPG a mean price target of $188.10, implying an ~16.0% rise from its current level of $162.26.
Why SPG Is Commanding a Premium in Comparison to Its Peers
A higher price-to-FFO multiple for Simon Property means that it has the capacity to give a predictable return as well as consistent dividend yields to investors.
SPG’s Stable Dividend Policy
During 2016, SPG repurchased 1,409,197 shares at an average price of $181.14 per share.
SPG Investments, US Portfolio Built Up in Upcoming Quarters
As of 3Q17, Simon Property Group had liquidity of more than $6.5 billion of cash on hand, which includes cash from its joint ventures and revolving credit facilities.
Key Drivers Contributing to SPG’s Evolution
Simon Property Group’s capital expenditure increased ~15.0% in 2Q17 while it decreased ~1.2% in 3Q17.
How GGP Stacks Up against Its Peers after 2Q17
GGP’s estimated price-to-FFO multiple for fiscal 2018 is 14.2x, which is at a premium compared to its peers.
GGP’s Generous Return to Stockholders in 2Q17
In 2Q17, GGP (GGP) paid $17.5 million in dividends to its shareholders. That was higher than $13.3 million paid a year ago.
GGP Has High Debt-to-Equity Ratio as of 2Q17: Can It Be Lowered?
GGP maintained a debt-to-equity ratio of 1.55x for 2Q17. That was higher than the industrial mean of 1.07x.
GGP Grew in 2Q17 Due to Development and Redevelopment
GGP has redeveloped its vacant spaces for non-retail uses such as restaurants, entertainment zones, fitness centers, and grocery stores.
What Caused GGP’s Soft Rent Growth in 2Q17?
GGP’s (GGP) minimum rent fell by $17.0 million in 2Q17, mainly because of dilution resulting from the sale of an interest in the Fashion Show Mall in Las Vegas n 2016.
GGP’s Revenue Rode High in 2Q17, Backed by New Leases
GGP’s minimum rent fell 3.9% to $349.2 million, and tenant recoveries fell 4.6% to $161.9 million. Overage rent fell 25.0% to $3.3 million.
GGP’s 2Q17 Results from an Investor’s Perspective
GGP (GGP) reported funds from operations (or FFO) of $0.35 per share, which was in line with Wall Street estimates. Adjusted FFO remained flat year-over-year.
How Analysts View Public Storage
Analysts have assigned PSA a mean price target of $217.67, which is 4.9% higher than its current price level.
Where Public Storage Stands among Other Major Players
Public Storage has consistently been able to return capital value as well as shareholder returns in the form of dividends and share buybacks.
Public Storage and the Growing US Economy
Public Storage (PSA) is expected to witness a higher cost of debt in 2Q17, mainly due to the Fed’s rate hikes in 2017.
Inside Public Storage’s 2Q17 Battle with Macro Headwinds
Public Storage (PSA) is expected to post flat top-line and bottom-line results in 2Q17.
What’s Really Driving Public Storage’s Expected 2Q17 Upbeat Results
Wall Street expects PSA to report adjusted FFO (funds from operation) of $2.40, compared with $2.54 in 2Q16.
Will Public Storage’s Cost-Reduction Initiatives Drive Higher NOI in 2Q17?
Wall Street analysts expect Public Storage (PSA) to report NOI (net operating income) of $483.7 million for 2Q17.
Will Public Storage Ride High on Top Line in 2Q17?
Wall Street expects Public Storage (PSA) to report revenue of $667.9 million for 2Q17. Its earnings call will be on July 27, 2017.
What Lies Ahead for Public Storage in 2Q17
Analysts expect PSA to report adjusted FFO (funds from operation) of $2.40, compared with $2.54 in 2Q16.
Where Public Storage Stands Compared to Its Peers
The value of an REIT such as Public Storage (PSA) is commonly measured by using its price-to-FFO (funds from operations) multiple.
How Public Storage Maintains Its Balance Sheet
REITs such as Public Storage (PSA) distribute at least 90% of their taxable incomes to shareholders in the form of dividends and share repurchases.
Public Storage: A Rewarding Stock for Shareholders
Public Storage (PSA) has regularly rewarded its shareholders in the form of quarterly dividends. The company has paid a dividend in every quarter since 1981.
How the Pro-American Environment Boosts Self-Storage
In a higher household income scenario, people tend to spend more on acquiring properties and need more storage space. This need boosts demand for self-storage facilities.
Can Public Storage Survive the Interest Rate Hike?
REITs will likely be significantly affected by rising interest rates. Rising mortgage rates will increase the cost of purchasing investment properties.
Focus on Quality Helps Public Storage Maintain Occupancy
Public Storage (PSA) puts a great deal of focus on the development and redevelopment of its existing facilities. Recently, there’s been a trend of rising rent for self-storage facilities.
Acquisitions, Diversification Help Public Storage Keep Momentum
Self-storage facility owners such as Public Storage are expected to ride high backed by higher demand for storage, mainly due to demographic changes and higher rent.
Public Storage Is Expected to Ride High on Robust Revenue Growth
Macroeconomic factors such as high rent and demographic changes have resulted in high demand for self-storage facilities.
Public Storage: A Self-Storage REIT with Room to Grow
Rent growth has moderated, but it remains at record highs. In such a scenario, consumers prefer apartments whose rents are affordable. This is where self-storage REITs come in.
How Rising Interest Rates Impact AVB and Residential REITs
There is wide anticipation in the market that the Federal Reserve could raise interest rates again during its upcoming meeting on June 14, 2017.
GGP and Retail REITs: Malls Are Winning the Fight against Depletion
President Trump doesn’t appear to be inclined to support a higher minimum wage for workers. This could help retail REITs control their operating expenses, boosting their margins.
GGP Inc.—A Growth Story amid Struggling Retail REITs
Despite the belief that US malls are giving way to e-commerce, malls are adapting to consumers’ changing needs. Mall owner GGP (GGP) has been able to maintain its earnings streak since 2012.
How Wall Street Analysts View Simon Property Group
Analysts gave SPG a mean price target of $202.45, implying an ~25.1% rise from its current level of $161.78.
Investing in Simon Property Group: Relative Valuation
Simon Property Group’s current price-to-FFO multiple is ~14.1x.
Can REITs Like Simon Property Group Survive the Fed’s Interest Rate Hikes?
The hawkish interest rate environment has added to the woes of mall owners like Simon Property (SPG), as well as the REIT industry.
Simon Property Group: A Growth Story amid Tremors in REITs
On April 27, Simon Property Group (SPG) reported 1Q17 earnings per share of $1.53, a 2% beat of the consensus estimate of $1.50.
US MBA Mortgage Applications Fell on a Weekly Basis
According to the Mortgage Bankers Association of America, the US (IVV) (SPY) (VOO) MBA index fell 3.3% in the week ending on March 18, 2016.
US Mortgage Applications Fell on a Weekly Basis
The US (IVV) (SPY) (VOO) MBA Index fell 3.3% in the week ending on March 11. MBA mortgage applications gained by 0.2% in the previous week.
General Growth Properties: Less Borrowing Bodes Well
To lower its effective borrowing costs and extend its maturity profile, GGP was active in unsecured and secured credit markets in fiscal 2015.
Simon’s Valuation Is Unlikely to Expand Further
Among the 25 analysts following Simon Property stock, 20 have assigned a “buy” rating. The company received no “sell” ratings from any analysts while five brokerages have assigned a “hold” rating.
General Growth Properties’ Revenue Fell in 4Q15
Minimum rent contributed to 60.1% of General Growth Properties’ total revenue in 4Q15.
Simon’s 4Q15 Earnings: Borrowing Cost Should Remain at Same Level
The total debt of Simon Property Group (SPG) increased from $20.8 billion as of the end of 4Q14 to $22.5 billion as of the end of 4Q15.
SPG’s 4Q15 Operating Metrics: Occupancy under Pressure
Simon Property Group (SPG) had 179 properties under US malls and premium outlets as of the end of 4Q15 compared to 177 as of the end of 4Q14.
Simon Property’s EBITDA Margin Likely to Improve in 4Q15
Wall Street analysts expect Simon Property’s EBITDA to be $1.1 billion in 4Q15 compared to $967.4 million in 4Q14. That would be a growth of 15.4%.
Simon Property Is Poised for a Strong 4Q15 Release
Simon Property Group (SPG) is set to release its 4Q15 and full year 2015 earnings on January 29, 2016. In 2015, it returned 4.9%. The stock was trading at $186.40 on January 19, 2016.
Impact of Consumer Spending on Retail REITs
Consumer spending and the overall health of the economy are the main drivers of retail REITs. The Fed’s decision to increase the interest rate could have a positive or negative impact on spending.
Will Macerich’s Value Creation Efforts Take Its Stock Higher?
Though Macerich’s management is trying its best to create value, it is yet to be determined how far this will translate into higher stock movement.
Why CBL’s Managemnet Was Optimisitc in 3Q15 Earnings Call
CBL & Associates’ management scheduled a conference call to discuss its 3Q15 earnings. The company’s FFO per share was below analyst estimates.
Macerich’s Q3: Funds from Operations Growth Likely to Continue
Macerich’s funds from operations per diluted share rose to $1.01 in 3Q15, compared with $0.88 in 3Q14, representing a growth of 14.8%.
Macerich: Why Healthy Base Rent Growth Bodes Well for the Company
Macerich’s base rent PSF (per square foot) for all regional shopping centers improved from $43.80 in 3Q14 to $48.97 in 3Q15.
CBL & Associates’ Stock Fell After Weak 3Q15 Earnings
Markets didn’t react positively to CBL & Associates’ 3Q15 earnings. The stock price fell 3.8% soon after the earnings release. Eventually, the stock closed at $14.7.
Simon Property Group Reported Higher FFO and NOI Growth in 3Q15
Simon Property Group’s (SPG) FFO (funds from operations) per diluted share increased to $2.54 in 3Q15 compared to $1.90 in 3Q14, representing a huge growth of 33.7%.
Simon Property Group in 3Q15: Healthy Earnings Boost Stock
Simon Property Group (SPG), the largest US retail REIT, reported its 3Q15 earnings on October 27, 2015. The company’s EPS for 3Q15 was $1.36, much higher than the consensus estimate of $1.20.
How Has Taubman Centers Performed in a Competitive Market?
The price-to-sales ratios of Taubman Centers, Simon Property Group, General Growth, and Macerich are 7.95x, 12.35x, 10.30x, and 10.89x, respectively.
Macerich’s Highest EV-to-EBITDA Multiple Compared to Peers
Over the past eight years, Macerich’s EV-to-EBITDA has ranged between 11.9x–27.2x, with a current EV-to-EBITDA multiple of around 21.8x.
CBL & Associates Properties: Cost Structure Analysis
A look at CBL’s cost structure indicates that its EBITDA margin was lower than that of several close competitors, but higher than Taubman Center’s margin,
Macerich’s Higher Price-to-FFO Multiple Compared to Peers
Over the last five years, Macerich’s price ranged between 13.3x–26.7x of its FFO, with a current price-to-FFO multiple of around 21x.
How CBL Plans to Increase Shareholder Returns
CBL’s (CBL) long-term strategy is to maximize shareholder returns while maintaining prudent risk profile.
A Macerich Must-Know: Steady Dividends to Shareholders
Bolstered by a higher FFO, Macerich increased its dividend by 6.4% to a total of $2.51 per common share in fiscal 2014 compared to $2.36 per share in 2013.
CBL & Associates: Its Development and Redevelopment Projects
Through property redevelopment, companies aim to add incremental square footage or increase the productivity of previously-occupied space.
Macerich’s High Net Operating Income in 2014
Macerich’s portfolio net operating income grew by 9.9% in 2014 to $611 million compared to 32.4% in 2013—the highest NOI reported by the company since 2008.
An Overview of CBL’s Geographic Coverage
As of fiscal 2014, CBL had wide geographic coverage, with properties located in 27 states, primarily in the southeastern and midwestern United States.
A Look Into CBL & Associates’ Retail Mall Business
CBL & Associates’ retail mall business comprises four main property portfolios—shopping malls, associated centers, community centers, and office buildings.
CBL & Associates Properties: A Must-Know Company Overview
CBL & Associates Properties is the fifth-largest retail mall REIT (real estate investment trust) in the United States.
Why Long-Term Anchor Tenant Leases Are Beneficial to Macerich
Approximately 41% of Macerich’s anchor tenant leases are for more than five years. These long-term leases for anchor tenants bode well for retail REITs.
Why Macerich’s Occupancy Rate Is Steadily Improving
The higher the occupancy rate, the higher the rental income for the company. Macerich knows this rule well and continues to acquire more tenants.
Why Macerich Rejected Simon Property’s Acquisition Offer
Macerich rejected Simon Property’s final bid in March 2015, explaining that the offer of $95.50 per share undervalued the company and its growth prospects.
Macerich’s Development and Redevelopment Projects
A major goal an retail REIT’s growth strategy is to redevelop acquired properties. Macerich is focused on identifying these redevelopment opportunities.
A Breakdown of Macerich’s Retail Mall Business
By the end of fiscal 2014, Macerich either owned or had ownership interest in 60 shopping centers consisting of approximately 55 million square feet of GLA.
Investing in Macerich: a Must-Know Company Overview
Macerich is a self-managed REIT headquartered in Santa Monica, California. The company was founded in New York in 1964.
General Growth Properties’ Essential Cost Structure Breakdown
GGP’s consolidated cost was $1.59 billion in 2014, a 3.1% decline over 2013. Depreciation and amortization made up 44.4% of total cost structure in 2014.
General Growth Properties’ Decent Revenue Growth in 2013 and 2014
In fiscal 2014, GGP reported a consolidated revenue of $2.53 billion—up by a mere 2% from 2013. In 2013, revenue grew by 2.5% over 2012.
General Growth Properties’ Crucial Key Operating Metrics
In 2015, General Growth Properties saw 12.3% of its total leases expire. Around 53.5% of the company’s total leases will be expiring in the next five years.
General Growth Properties’ Acquisition Growth Strategy
In 1995, General Growth Properties acquired Homart Development, a subsidiary of Sears, a $1.85 billion acquisition. In 2004, GGP acquired The Rouse Co.
General Growth Properties’ Top Tenants in Retail
The malls in GGP’s portfolio receive a smaller percentage of their operating income from anchor tenants than from specialty retailers who lease space.