Public Storage

The rising interest rate is expected to boost the economy in the long run, but it could severely impact sectors like real estate.

Simon Property is the only REIT in the S&P 100 Index and has heavy asset concentration on the US east coast and in the central US.

Boston Property (BXP) has strong business momentum and has been maintaining a decent growth trajectory for the past few years.

Public Storage (PSA) trades at an EV-to-EBITDA multiple of ~21.5x.

Analysts have assigned PSA a mean price target of $217.67, which is 4.9% higher than its current price level.

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 (PSA) is expected to witness a higher cost of debt in 2Q17, mainly due to the Fed’s rate hikes in 2017.

Public Storage (PSA) is expected to post flat top-line and bottom-line results in 2Q17.

Wall Street expects PSA to report adjusted FFO (funds from operation) of $2.40, compared with $2.54 in 2Q16.

Wall Street analysts expect Public Storage (PSA) to report NOI (net operating income) of $483.7 million for 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.

Analysts expect PSA to report adjusted FFO (funds from operation) of $2.40, compared with $2.54 in 2Q16.

The real estate sector’s (VNQ) (IYR) performance was subdued in 2016 due to its supply-demand dynamics.

A fall in interest rates makes REITs more attractive dividend-yielding investments compared to bonds. This is because REITs have been traditionally viewed as dividend-yielding investments.

With the growing economy and global investment horizons, investments have shifted beyond the traditional options to specialized REITs.

Average capitalization rates in 2Q15 fell to 7.5% across all the property types compared to 8.35% in 2Q14.

Only 1.2% of Simon Property’s gross annual revenues from inline or freestanding stores comes from month-to-month leases. 6.5% of leases will expire in 2015.

Simon Property has a strong track record of aggressive acquisitions. Since its IPO in 1993, the company has completed acquisitions worth $40 billion.

Simon Property’s US properties consist of malls, premium outlets, community centers, and retail properties that make up ~182 million square feet of GLA.

US REITs came into existence in 1960 when President Eisenhower signed the REIT Act contained in the Cigar Excise Tax Extension.