Simon Property Group Inc

During 1Q17, General Growth Properties’ (GGP) occupancy rate (same-store leased percentage) fell to 95.9% from 96.6% in 1Q16.

The CCI is one of the oldest consumer surveys, originally started as a mail-in survey in 1967. It asks respondents whether certain conditions are positive, negative, or neutral.

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.

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.

Private sector employment increased by 238,000 in December, while November’s numbers were revised upward from 215,000 to 229,000.

Simon Property Group is by far the biggest shopping center REIT in the U.S., with a market capitalization of $53 billion. The next biggest REITs are less than half Simon’s size.

Simon Property Group, the biggest mall owner, is in talks with Amazon to transform some empty spaces into Amazon fulfillment centers.

American Tower’s (AMT) global expansion strategy, which includes acquisitions and joint ventures in several countries (mainly in developing nations), is likely to continue supporting its top line.

American Tower (AMT) deployed $600 million of capital in 3Q17, bringing its year-to-date amount to $3.6 billion.

In order to qualify as REITs (real estate investment trusts), companies usually have to pay 90% of their profits (excluding capital gains) as dividends.

REITs depend on equity and debt for their working capital.

Although it is a common belief that high interest rates are usually bad for REITs like Boston Properties (BXP), Simon Property (SPG), Prologis (PLD), and Vornado Realty Trust (VNO), we find that REITs have continued in their growth trajectory in the past few months.

REITs have flourished for a considerable period in a record-low-interest-rate environment because they depend on debt and equity for their working capital.

BXP leased properties with a total area of 926,000 square feet in 2Q17.

Boston Properties raised its EPS (earnings per share) outlook for 2017 to a range of $2.72 to $2.77 per share.

The growing economy has acted as a boon to REITs, and with the help of their strategic initiatives, these REITs have been able to take advantage of the opportunity and report higher revenue and profits.

Boston Properties’ recent upbeat results came on the back of higher leasing activity as well as strong occupancy levels, which led to revenue growth.

GGP’s (GGP) debt-to-equity was 1.55x for 2Q17, which was higher than the industrial mean of 1.07x. As of 2Q17, GGP had $2.0 billion of liquidity.

GGP’s estimated price-to-FFO multiple for fiscal 2018 is 14.2x, which is at a premium compared to its peers.

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 maintained a debt-to-equity ratio of 1.55x for 2Q17. That was higher than the industrial mean of 1.07x.

GGP has redeveloped its vacant spaces for non-retail uses such as restaurants, entertainment zones, fitness centers, and grocery stores.

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 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 (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.

AMT’s current price-to-FFO multiple stands at ~22.1x. After 2Q17, American Tower offers a next-12-month dividend yield of 1.9%.

In 2Q17, American Tower distributed cash worth $275 million among its common stockholders and paid preferred stock dividends totaling $27 million.

American Tower has paid dividends to its shareholders in every quarter since it became a public company. On June 1, AMT hiked its quarterly dividend by 3.2%.

Analysts expect wireless tower operator American Tower (AMT) to report revenue of $1.6 billion in its 2Q17 earnings call on July 27, 2017.

Vornado Realty Trust (VNO) invested in developing a high-demand office property in Highline at 512 West 22nd Street in Manhattan, which covers 173,000 square feet.

AMT’s current price-to-FFO multiple is ~20.1x.

AMT reported a debt-to-equity ratio of ~2.8x in 1Q17. The industry median debt-to-equity ratio is ~1.1x.

AMT has maintained a consistent dividend yield over the last two years. Its dividend yield was ~1.8% in 2015 and ~2.0% in 2016.

More than 95% of AMT’s towers are located in suburban and rural areas, where the majority of the US population resides.

AMT maintains non-cancellable long-term leases with an initial term of ten years. Almost 50% of the company’s leases have a renewal date of 2022 or beyond.

American Tower’s (AMT) revenues rose ~26% in 1Q17, driven by 22% growth in its Tenant Billings business and 8.6% growth in its Organic Tenant Billings business.

For fiscal 2017, American Tower (AMT) expects to report adjusted funds from operations exceeding $2.8 billion. This figure is $55 million, or ~2%, higher than expected by the company.

Simon Property Group’s current price-to-FFO multiple is ~14.1x.

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

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 is a self-managed REIT headquartered in Santa Monica, California. The company was founded in New York in 1964.

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

The malls in GGP’s portfolio receive a smaller percentage of their operating income from anchor tenants than from specialty retailers who lease space.

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.

Headquartered in Indianapolis, Simon Property Group formed in 1993 when the shopping center division of Melvin Simon & Associates became publicly-traded.

The most common way of calculating the relative value of a REIT is the price-to-FFO multiple. FFO is widely used because it’s the main earnings metric for REITs.

The capitalization rate, or cap rate, is an important concept in the commercial real estate industry. It’s defined as an initial yield on a real estate investment.