SPDR® Dow Jones REIT ETF
Real Estate Stocks: Look beyond Buying Property
Real estate stocks have outperformed this year, and there’s room for growth in a particular subsector. Here’s why investors should look beyond property.
Is Simon Property’s Premium Valuation Justified?
Simon Property Group (SPG) can be best evaluated by its price-to-FFO (price-to-funds from operations) multiple.
Simon Property to Gain from Improving Economy, Trump’s Policies
The favorable consumer environment should boost the hopes of retailers, the benefits of which are likely to pass on to operators such as Simon Property Group.
Welltower’s Dividend Yield Falls despite Higher Dividend
Revenue and earnings In this part, we’ll look at Welltower (HCN), a US healthcare REIT. Welltower’s revenue growth slowed from 15% in 2015 to 11% in 2016. The growth was driven by all of its segments, through rental income, resident fees and services, interest income, and other income. Its operating costs and other expenses (including interest expenses) […]
What Industrial REITs Analysts Think after 2Q17
Prologis (PLD) has been assigned a target price of $62.75, which is 0.8% higher than its current price level.
How Capital Deployment Strategies Helped Boost Industrial REIT Sales in 2Q17
Industrial REITs (real estate investment trusts) tend to carry on many development and redevelopment projects simultaneously in order to maintain leadership.
Industrial REITs and the Year Ahead
Industrial REITs (real estate investment trusts) appear to have a bright future backed by a growing economy and industrial growth.
Inside 3 Key Industrial REITs in 2Q17: Top- and Bottom-Line Results
Industrial REITs (real estate investment trusts) reported robust top-line and bottom-line results in 2Q17 backed by industrial growth,
Top 3 Industrial REITs: An Overview of the 2Q17 Results
Industrial REITs (real estate investment trusts) are currently experiencing a boom, and many investors and analysts anticipate future growth.
How AvalonBay Compares after 2Q17
Price-to-funds from operations multiple AvalonBay Communities’ (AVB) performance in 2Q17 can be best evaluated by looking at its price-to-FFO (funds from operations) multiple. The multiple, widely used for REITs, gives an idea of how much an investor pays for a particular stock per unit of its profit. The multiple, which has the same implications as the price-to-earnings […]
Financing Activities Leverage AvalonBay’s Balance Sheet in 2Q17
Performance in 2Q17 AvalonBay Communities (AVB) has undertaken several development, redevelopment, and expansion projects to maintain its share in the market. It invested $400 million in new developments during the quarter. REITs such as UDR (UDR), Essex Property Trust (ESS), and Equity Residential (EQR) fund these activities with the help of debt and equity. Therefore, […]
Income Rises in 2Q17, AvalonBay Expects Higher Expenses
Income generated in 2Q17 AvalonBay Communities (AVB) reported NOI (net operating income) of $367.1 million, compared with $339.6 million in 2Q16. The Northern California region reported the highest NOI of $64.6 million, followed by the New York metropolitan area, which reported NOI of $61.5 million. Development and redevelopment communities reported NOI growth of $40.1 million, […]
How Geography Affected AvalonBay’s 2Q17 Results
Wide geographical diversity AvalonBay Communities (AVB) has its assets well placed in high-demand Class A cities. These cities have soaring job growth, a high barrier to entry for competitors, and proximity to premium infrastructure. REIT peers UDR (UDR), Equity Residential (EQR), and Essex Property Trust (ESS) are repositioning their properties to Class A cities and […]
AvalonBay Maintains Profit with Strategic Capital Deployment
Demographic shift American demographics are shifting towards Class A cities with high-income growth and demand for residential apartments. These cities offer job prospects and proximity to offices, schools, and other necessities for premium social living. Although these cities also have high barriers to entry, more residential apartment owners are repositioning their properties in these areas. […]
AvalonBay Revenue Climbs in 2Q17, Backed by Rent Growth
Robust 2Q17 driven by rent growth AvalonBay Communities’ (AVB) total revenue of $530.5 million marginally surpassed Wall Street estimates by 0.3%. However, revenue rose by almost 6% from the year prior. Upbeat top-line growth reflected growth in development communities and stabilized operating communities. Same-store revenue rose 2.5% year-over-year. Including revenue from redeveloped communities, same-store revenue […]
What Lies Ahead for AvalonBay
Robust 2Q17 results AvalonBay Communities’ (AVB) top and bottom lines exceeded expectations, backed by higher net operating income growth of 8.1%. Factors affecting profit during 2Q17 Higher occupancy and rent growth in development communities and stabilized operating communities led to upbeat results during the quarter. Higher funds from operations expected for 3Q17 AvalonBay expects […]
Where AvalonBay Stands after Its 2Q17 Earnings Release
AvalonBay Communities (AVB) reported core FFO (funds from operations) of $2.09 per share, in line with Wall Street estimates.
What Investors Should Consider before Investing in REITs
A REIT (or real estate investment trust) is a company that owns and manages income-producing real estate.
The Real Estate Reaction: Gauging the Impact of the Fed’s Rate Hikes
The rising interest rate is expected to boost the economy in the long run, but it could severely impact sectors like real estate.
Why Look to REITs for Opportunities?
HEDGING AGAINST INFLATION Property stocks and REITs have often been viewed as inflation hedges because expected inflation will affect prices of real estate, and rental income tends to rise along with generalized inflation. However, other factors may mitigate the impact of inflationary forces. Some of these additional factors may include real estate supply and demand […]
Why REITs Tend to Offer High Dividend Yield
COMPARING DIVIDEND YIELDS ACROSS ASSET CLASSES Since 1999, approximately half of the total return of the Dow Jones U.S. Select REIT Index has come from dividends. During periods of heightened volatility, this income could act as a buffer and may mitigate negative price movements. Historically, the Dow Jones U.S. Select REIT Index has produced higher […]
The REIT Advantage: High Return, Low Correlation
RETURNS AND RISKS OF REITS REIT and property stock performance has been relatively strong over the long term, especially when compared with traditional bond and equity indices. Since 1992, the Dow Jones Global Ex-U.S. Select RESI has had an average total return close to 9%, while the Dow Jones U.S. Select REIT Index has had […]
The Evolution of the REIT
The Evolution of REITs The basic concept of REITs originated with the business trusts that were formed in Massachusetts in the mid-19th century, when the wealth created by the industrial revolution led to a demand for real estate investment. The first REIT was set up in 1961, but it took several decades before REITs were […]
REITs 101: Understanding this Vehicle
By Michael Orzano, Director, Global Equity Indices Publicly traded property stocks, including real estate investment trusts (or REITs) and real estate operating companies (or REOCs), allow investors to gain exposure to real estate, which is generally an illiquid asset class, without sacrificing the liquidity benefits of listed equities. They also typically offer higher yields than […]
Why Look to the REIT Sector for Opportunities?
Not only do REITs (RWR)(ICF) help diversify a portfolio, but they also bolster portfolio income with their steady dividends and their long-term capital appreciation.
Why REITs Tend to Offer High Dividend Yields
REITs (IYR)(VNQ) are known for their high dividend yields, outclassing almost all other broad market indices.
The REIT Advantage: High Returns, Low Correlation
Not only do REITs tend to provide steady and stable returns over the long term, but they also help in diversifying investor portfolios effectively.
The Evolution of REITs
The REITs (IYR) sector has shown phenomenal growth over the years. In the past five decades, REITs have grown to a market cap of nearly $1 trillion.
REITs 101: Understanding this Investment Vehicle
In this series, we’ll get down to the brass tacks of investing in the REIT sector, the market’s current landscape, and the benefits you can expect from this type of investment.
How Would Negative Interest Rates Impact REITs?
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.
What Is Housing Affordability?
HUD considers a house to be affordable if the cost of the total rent or mortgage plus utilities are ~30% or lower of the household’s annual income. This relates to a family of four earning at or below 80% of the area median income.
Higher Demand Likely to Drive BioMed Realty’s Occupancy in 2016
The improving economy, favorable business fundamentals, and a focus on life science companies have led to strong demand for BioMed Realty’s properties.
So Why Is Blackstone Acquiring BioMed Realty?
In October 2015, Blackstone agreed to acquire all BioMed Realty’s outstanding shares of common stock for $23.75 per share—an $8 billion transaction.
BioMed Realty’s Other Strategy: Generating Sustainable Growth
BioMed Realty’s growth strategy aims to meet demands for specialized office and laboratory space by leveraging its local knowledge and management expertise.
BioMed Realty’s Strategy: Adding Value through Property Development and Redevelopment
BioMed Realty focuses on value creation through development and redevelopment of old and new properties, aiming to develop space on all land it acquires.
An Overview of BioMed Realty’s Specialized Property Portfolio
BioMed Realty’s total property portfolio witnessed increased from 12.2 million square feet in 2010 to 17.5 million square feet in 2014.
An Investor’s Introduction to BioMed Realty Trust
BioMed Realty is now the fifth-largest publicly traded office REIT in the United States and is a part of the S&P 400 Index.
Alexandria: Earnings Margin to Remain at an Elevated Level
Alexandria (ARE) recorded an EBITDA margin of 62.5% in 2014, the lowest earnings margin recorded by the company in the last five years.
Alexandria: Flying High with Higher Occupancy Levels
Occupancy rate is the number of units that are rented out to residents by a company in proportion to the total number of units in the building or community.
Alexandria’s Strategy to Generate Sustainable Growth
Alexandria’s strategy is to acquire, develop, and redevelop properties in target cluster markets.
An Overview of Alexandria’s Property Portfolio
Alexandria Real Estate Equities’ total property portfolio has witnessed healthy growth during the past five years.
Kilroy Realty: Standing Tall with Highest Earnings Margin
Kilroy Realty’s earnings margin is much higher than the industry average of 52.3% and those recorded by its peers.
What Is Kilroy Realty’s Value Creation Strategy?
Kilroy Realty expects its strategy to generate higher rental income and higher occupancy levels in the years to come.
A Look at Kilroy Realty’s Property Portfolio
The increase in Kilroy Realty’s office property portfolio was due to the acquisition of properties to create long-term value.
Boston Properties’ Cost Structure, EBITDA Margin, and Other Must-Knows
Boston Properties (BXP) consolidated costs were $1.6 billion for fiscal 2014—up by 12.1% over 2013—on the heels of a 25.7% total cost rise in 2013.
Breaking Down Boston Properties’ Value Creation Strategy
Boston Properties aims for high growth by managing properties, recycling capital, and operating in supply-constrained markets with high entry barriers.
How Would a Rate Hike Impact REITs?
If rates do rise in December, as most experts are expecting, a mass selloff in REITs will likely occur.
Comparing Post Properties’ EBITDA Margin with Industry Average
Post Properties recorded an EBITDA margin of 51.3% in 2014, which is lower than the industry average of 57.7%.
Property Acquisitions Add Value to American Campus Communities
American Campus Communities believes in generating consistent earnings growth through property development and acquisitions.
MAA’s EBITDA Margin: Lower than Industry Average
MAA’s EBITDA margin is lower than the industry average of 57.7%, as well as the margins reported by some of the company’s peers.
Investing in MAA: A Must-Know Company Overview
MAA is the sixth largest apartment REIT company in the United States, with a market capitalization of $6.4 billion.
What Does AIMCO’s Lower EV-EBITDA Multiple Mean to Investors?
AIMCO’s (AIV) EV-EBITDA multiple shows that it’s in line with its historical valuation. Over the last seven years, its EV-EBITDA was 10.5 to 18.2x, with a current EV-EBITDA multiple of 16.9x.
AIMCO Reported Highest Funds from Operations in 2014
AIMCO’s (AIV) funds from operations have increased consistently over the past five years, from $177 million in fiscal 2010 to $301.8 million in fiscal 2014. That’s the highest FFO in seven years.
A Look at AIMCO’s Diversified Renter Base
AIMCO has a diversified renter base. The average age of AIMCO’s residents is 36 years. Around 38% of AIMCO’s renters are between the ages of 18 and 30 years.
An Overview of AIMCO’s Geographic Coverage
AIMCO’s main aim of its geographic coverage strategy is to maintain diversification while moving to a higher average price point.
Investing in Apartment Investment & Management Company
Apartment Investment & Management Company (or AIMCO) (AIV) is a self-administered, self-managed REIT. It’s one of the largest owners and operators of apartment communities in the United States.
Essex Property Trust Stock Fell despite Robust 3Q15 Earnings
The market reacted negatively to Essex Property Trust’s 3Q15 earnings. Soon after the earnings release, the stock dipped by 3.6% over the previous day’s close.
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.
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%.
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 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.
Equity Residential Plans to Sell Apartment Units to Starwood Capital
On October 26, Equity Residential announced its plans to sell 72 properties in five markets to Starwood Capital. This includes 23,262 apartment units.
Equity Residential’s 3Q15 Earnings Boost the Stock Performance
Equity Residential (EQR) is the largest US residential REIT. It reported its 3Q15 earnings on October 26. The company’s EPS was $0.53 for 3Q15.
CBL versus Peers: Price-to-Funds from Operations Multiples
The most common way to calculate the relative value of an REIT is the price-to-funds from operations multiple.
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.
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.
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.
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.
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.
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.
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.
Investing in Essex Property Trust through ETFs
ETFs are a convenient way for portfolio diversification across a number of asset classes. ETFs mirror the performance of an entire market in a single trade.
How Essex Property Trust Benefited from Portfolio Restructuring
Acquisitions and dispositions are an important component of Essex Property Trust’s (ESS) business plan.
AvalonBay Communities Offers Steady Dividend to Shareholders
REITs such as AvalonBay Communities must pay at least 90% of taxable income to investors as dividends. Dividends come from relatively stable rents paid by tenants.
Equity Residential Offers Steady Dividends to Shareholders
REITs must pay at least 90% of the taxable income to investors as dividends. REIT dividends are protected from the long-term effects of rising prices.
What Was Equity Residential’s Cost Structure?
Equity Residential’s (EQR) consolidated cost was $1.69 billion for fiscal 2014—down by 9.70% over 2013. This came after a 52% rise in the total cost in 2013.
The Rise in Commercial Property Rent Is Beneficial to REITs
Rent increased 0.4% for industrial properties in 2Q15, which was unchanged from the previous quarter, but lower than the 0.5% 2Q14 growth.
Falling Vacancy Rates Bode Well for REITs
According to the data from NAR (National Association of Realtors), the office vacancy rate declined to 15.9% in Q2 of fiscal 2015 compared to 16.5% in the same period year ago.
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’ 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.