Columbia Property Trust Transition Brings Opportunity to Investors

chart03With Columbia Property Trust’s transition underway, there are numerous positive plans being made and carried out. Some of the more notable including the recent sales of property on the outskirts of Washington D.C. (property situated near Dulles International Airport), the company’s transition into areas like gateway cities’ high barrier office markets, and its share price that’s down almost 20% from March of last year’s peak.

The company has also made great strides in making itself more visible and attractive. One of the more significant noteworthy ambitious moves includes the transition from external management into a self-managed platform and the change in name from Wells Real Estate Investment Trust II to Columbia Property Trust.

chart01Along with the change in brand, the company was also listed as CXP on the New York Stock Exchange in 2013, while also changing the face of their business by transitioning its portfolio to infill markets in central business district (CBD).

With this new quality portfolio, the company has since been upgraded in ratings from BBB- to BBB. Due to all of the changes being made, investors can also see that the company is also clearly capitalizing on the investment concept that the suburban office is on the decline.

Though the trend against suburban office markets can be considered one of those urban myths, there’s a generational behavior change that explains this transitional period. For instance, the younger generation prefers living near places that provide public transportation and they see no need to have a driver’s license.

It is important to note the great recession contributed to these new trends since central business districts have recovered faster than suburban office markets. However, people should also realize that the majority of the jobs are still located in suburban markets and many are performing well.

chart02To that end, Columbia is left in a position to prove that they can handle the acquired assets in central business markets as well as the impending expiring leases that are coming up soon.

With all of this being said, investors should see Columbia as a long term bet, specifically if they believe in CBD portfolios. Also, because of all of their efforts, they are placing themselves in a good entry point for investors to consider.

Source: Columbia Property Trust, Inc.(NYSE:CXP), Fast Graphs, Yahoo!Finance

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Disclosure: The author has no positions in any shares mentioned, and no plans to initiate any positions within the next 72 hours.

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