QTS Realty – Dilution does not alter outlook

Analyzing QTS Realty Trust (NYSE: QTS) is challenging given the brief history. A small market capitalization company in the data center REIT space, QTS was listed on the New York Stock Exchange in October 2013. A potentially larger obstacle is to build a great future, which is not an issue for QTS’s management, despite bumps in the middle of the road.

Q1 15 Performance

In their Q1 2015 earnings report released Monday, April 27, QTS announced that the March issuance of an additional 5 million shares diluted FFO. The midpoint 2015 Alternate FFO guidance was reduced from $2.29 per share to $2.12 per share. The total fully diluted shares and limited partnership units outstanding increased from 37.5 million to 42.8 million.

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However, this event did not alter much the price target for 2015. Price-to-FFO has been approximately 17 which is in between year-end price-to-FFO for 2013 and 2014 and close to its peers’ median. The company’s dividend yield of 3.5 percent is also on par with their peers’ median.

Based on the above information, QTS has been an average performer in the data center REIT sector.

Summary

2013 2014 2015P
Dividends declared per common share, $ 0.24 1.16 1.28
Q1 Dividend, $ N/A 0.29 0.32
Listed on the NYSE 10/9/2013
Dividend payout ratio, in percent 74.5 62.2
Weighted average shares – diluted (CS&OP) 36,794,215 37,133,584 42,812,502
Dividend yield, in percent 3.9 3.4 3.4
FFO, $ ‘000s 45,964 70,958
FFO per share, $ 1.25 1.91
Alternate FFO (Operating), $ 000s 49,512 74,145 89,200
Alternate FFO per share (Operating), $ 1.35 2.00 2.12
AFFO, $ ‘000s 47,408 69,236
AFFO per share, $ 1.29 1.86
Debt to Implied Enterprise Value, in percent 27.6 33.4
Revenues – Q1, $ 000’s N/A 48,943 61,386
Revenues – Q1, in percent N/A N/A 25
Share Price on 31 December, $ 24.78 33.84 37.48
P/FFO on 31 December (Alternate) 18.4 16.9 17.7
 2015P=2015 Projections

Source: QTS Realty Financials and Q1 2015 Presentation


Written by Heli Brecailo

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.​

Public Storage – King of Self-Storage (Series 5 of 5)

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As the world’s largest owner and operator of self-storage facilities, Public Storage (NYSE: PSA) is the de-facto leader of the industry. Structured as a REIT, PSA boasts an extensive network of 2,300 facilities across 38 states in the US. This presence has created a very strong and recognized brand. PSA wisely leverages their size to maximize economies of scale and gain access to capital. In a fragmented market where creating a new location is fairly straightforward, these benefits facilitate the company’s continued expansion.

Overall, PSA’s stock has been a solid investment. As a large, well established company, PSA’s growth rate has predictably lagged its smaller cap peers. However, the dividend payout has never been decreased since its IPO in 1996. As a sign of PSA’s strength, the dividend has increased an average of 21 percent per year over the past five years. Investors have also benefited from a lower beta coefficient enabling the stock to weather down markets.

Leaders of their sector and industry earn privileges few companies in the US can boast. In examining PSA’s financials, the company has an impressive debt-to-enterprise ratio of less than one percent. Unlike most REITs, the company chooses to issue preferred shares as a method of financing. Although this comes at a higher cost, PSA justifies the strategy with the following points:

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  1. REITs, by law, must distribute a significant portion of operating income. Subsequently, conventional debt can become difficult to repay with operating income
  2. Refinancing risks do not exist since sinking fund requirements, maturity date and redemption issues are eliminated
  3. PSA retains the option of redeeming preferred shares at a specified future date.
  4. Preferred shares are not subject to covenants
  5. Dividends on the preferred shares can be applied to satisfy our REIT distribution requirements.

The credit ratings on their preferred shares are “A3” by Moody’s, “BBB+” by Standard & Poor’s and “A” by Fitch Ratings.

Regarding valuation, PSA’s has been on par with previous years. Over the past three years, the Price-to-FFO multiple has fluctuated between 20.0 and 23.7. Although historically high, PSA’s current Price-to-FFO multiple is within its historical range. In addition, historical yield has been hovering around 3.0.

Takeaway

PSA can be a solid addition to balance a portfolio.

Summary

2011 2012 2013 2014 2015P*
Dividends declared per common share, $ 3.65 4.40 5.15 5.60 5.60
Q4 Dividend, $ 0.95 1.10 1.40 1.40
Dividend payout ratio, in percent 65 69 72 72
Dividend yield, in percent 2.7 3.0 3.4 3.0
FFO per share, $ 5.67 6.31 7.53 7.98 8.68
FFO per share (Q4 only), $ 1.50 1.86 2.13 2.17
Alternate FFO per share (Core), $ 6.68 7.44 8.09
AFFO per share, $ 5.65 6.41 7.18 7.73
Revenues – Total, in percent 6.5 5.2 7.6 10.8
Revenues – Same Store, in percent 4.6 4.9 5.3 5.4
NOI – Same Store, in percent 6.6 7.9 8.2 6.7
Year-end Occupancy – Same Store, in percent 89.6 91.4 91.8 92.5
Share Price on 31 December, $ 134.46 144.96 150.52 184.85 200.24
P/FFO on 31 December 23.7 23.0 20.0 23.2 23.1
 *2015 Projection

Next week I’ll post the closing remarks for the self-storage REIT sector.


Written by Heli Brecailo

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.​

Does CubeSmart suffer from middle child syndrome with reason? (Series 4 of 5)

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As a middle child, it can often be difficult to get attention, especially as the third in a family of four children. The first typically gets more attention as there were not any siblings around vying for attention and the last gets coddling.

Does it get better if it changes its name to a tricky one?

That’s how I feel about CubeSmart (NYSE:CUBE). As of March 31, 2015, the Company’s market capitalization is US$3.9 billion. This is slightly higher than Sovran Self Storage, but not as high as Extra Space’s and Public Storage’s. However, that doesn’t mean CubeSmart’s not a quality company. It is a solid company that has strategically grown, which is ideal for a dividend growth investor.

Previously known as U-Store-It Trust, it changed its name to CubeSmart in 2011 to enjoy the branding benefits of joining the “big names” club, especially in a highly fragmented industry where customer service is a big differentiator. Furthermore, it takes pride for having re-positioned the portfolio, moving away from slow growth and less population, into high growth and more populated core markets such as New York, Washington DC, and Philadelphia. The result is a high quality, urban-oriented portfolio, which tends towards millennials who live in tight blocks and boomers who downsize to smaller homes.

As the portfolio changed, average occupancy increased from mid-seventy to ninety percent. Currently it is at an all-time high. Additionally, it has positioned itself in the highest income household neighborhoods versus its peers.

Since 2011, CubeSmart has checked all the following boxes:

  • 2-digit total revenue growth
  • 2-digit FFO growth rate
  • 2-digit dividend growth
  • Conservative dividend payout ratio
  • 6 percent average same store revenue growth
  • 8 percent average net operating income growth

2015 Projected Growth Rates 

  • 7 percent net operating income growth
  • 6 percent same store revenue growth
  • 4 percent FFO growth
  • 6 percent dividend

CubeSmart’s debt profile has improved over time and is currently on par with its peers. Nonetheless, the average interest rate of 4.0 percent is relatively high; Sovran’s is 3.7 and Extra Storage’s is 3.4 percent. Public Storage’s debt is less than one percent of its total market capitalization. The average maturity is six years. Most debt is fixed-rate and unsecured. The Company has mid-tier, investment-grade credit ratings from both Standard & Poor’s and Moody’s.

Although CubeSmart has seen capitalization rates of quality acquisitions decrease to approximately five percent, it has kept a good pace of acquisitions. Over the last three years, it has added 3.9, 1.5, and 2.6 million square feet to existing properties (2014, 2013 and 2012 respectively). As of December 31, 2014, the 421 owned self-storage facilities encompassed an aggregate of approximately 28.6 million rentable square feet.

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Valuation wise, price-to-FFO is on par with the last four year’s year-end price-to-FFO mean, as well as the sector’s mean. The dividend yield is acceptable at 2.8 percent.

The Company will release Q1 2015 financials after the market close on Thursday, April 30, 2015.

Takeaway

Although I like the growth story, there doesn’t seem to be much appreciation upside and the dividend yield is just okay. The middle child will have to do more to excel.

Summary

2011 2012 2013 2014 2015P*
Dividends declared per common share, $ 0.29 0.35 0.46 0.55 0.64
Q4 Dividend, $ 0.08 0.11 0.13 0.16
Dividend payout ratio, in percent 45 47 51 51
Dividend yield, in percent 2.7 2.4 2.9 2.5
FFO per share, $ 0.56 0.71 0.87 1.03 1.17
FFO per share (Q4 only), $ 0.09 0.21 0.21 0.26
AFFO per share, $ 0.65 0.74 0.91 1.08
Debt to total capitalization, in percent 37.3 33.3 32.8 23.8
Revenues – Total, $ 000s 227,245 266,322 318,395 376,963
Revenues – Same Store, in percent 3.6 3.8 7.4 7.2 5.5
NOI – Same Store, in percent 5.7 6.0 9.3 9.6 6.5
Year End Occupancy – Same Store, in percent 79.1 85.1 88.8 90.0
Share Price on 31 December, $ 10.64 14.57 15.94 22.07 23.12
P/FFO on 31 December 19.0 20.5 18.3 21.4 19.8
 *2015P=2015 Projection

Written by Heli Brecailo

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.​

Extra Space Storage reaches high marks (Series 3 of 5)

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Second largest self-storage REIT, Extra Space Storage (NYSE: EXR) reaches high marks when it comes to cleanliness and employee satisfaction. However, do not take that as a sign that you can move in with your TV and sofa to live and work from your storage box. Some store managers live on-site, but the same ability is not extended to renters. Besides, you are not allowed to plug in appliances.

Extra Space Storage was founded in 1977 and enjoys ownership interest in 828 stores spread across 35 states as well as Puerto Rico and Washington, DC. Of those, 557 are wholly owned while 271 are joint venture partnerships. Add in 260 units owned by third parties, but operated by Extra Space Storage in return for a management fee and the entirety of this storage enterprise is just plain massive. It should be noted that 86 percent of the company’s revenues is derived from the rental side of business.

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Additional high marks:

  • Dividends have compounded at an annual growth rate of 18% since going public in 2004. The company has experienced only one reduction and that was in 2009 when just surviving the Great Recession intact could be taken as a good sign. An even better sign is that current dividend distribution levels have actually surpassed those from the pre-recession era.

EXR Q4 14 Revenues

  • Funds from operation (FFO) per share have increased at a compounded annual growth rate of 28 percent over the past three years, but management forecasts at least a 15 percent rate of growth in 2015. The company’s double digit rate of growth in revenue over the past three years has far surpassed expectations while at the same time enjoying same store revenue and net operating income growth in the high single digits. Occupancy rates have increased by over a hundred of basis points.

EXR Q4 14 AFFO

  • Extra Space Storage has consistently aimed at deleverage of its debt and current debt to enterprise figure stand at around 25 percent. That figure is more than reasonable in comparison to the figures reported by Sovran Storage and CubeSmart. In addition, 36% of the debt of Extra Space Storage is subject to variable interest rates. The combined weighted average interest rate is 3.4% with a weighted average maturity of approximately 4.6 years. As for the bad news: 84% of the loan is secured.
WANT TO SEE EXTRA SPACE’S METRICS AGAINST ITS PEERS? DOWNLOAD FREE FILE.

Extra Space Storage has been trading at a median year-end price-to-FFO figure of 22.2x. The projected FFO per share for the current year (2015) is $2.90 which translates into a fair price somewhere in the $64 range. That figure is just slightly below the $66.85 per share price the stock hit on April 21, 2015.

Out of the thirteen sell-side analysts covering the stock, six favor Extra Space Storage while seven have placed it on hold. The six “buy” ratings should at a minimum be taken as a sign that the stock should be moved to your watchlist.

Who knows, maybe they will allow self-storage living.

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Summary

 EXR
Metrics 2011 2012 2013 2014 2015P*
Dividends declared per common share, $ 0.56 0.85 1.45 1.81 1.88
Q4 Dividend, $ 0.14 0.25 0.40 0.62
Dividend payout ratio, in percent 46 52 68 69
Dividend yield, in percent 2.3 2.3 3.4 3.1
FFO per share, $ 1.20 1.59 1.96 2.52 2.90
FFO per share (Q4 only), $ 0.35 0.43 0.52 0.62
AFFO per share, $ 1.23 1.64 2.12 2.61 2.94
Debt to total capitalization, in percent 36.2 27.4 27.5 24.7
Net Debt to EBITDA 6.94 6.03 5.50 5.61
Revenues – Total, in percent 17.1 24.1 27.2 24.3
Revenues – Same Store, in percent 5.8 6.6 7.4 7.5 6.3
NOI – Same Store, in percent 9.3 10.2 10.0 9.5 7.0
Occupancy – Same Store, in percent 86.9 87.9 89.2 91.4
Share Price on 31 December, $ 24.23 36.39 42.13 58.64 64.24
P/FFO on 31 December 20.2 22.9 21.5 23.3 22.2
 *2015P – 2015 Projections

Written by Heli Brecailo

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.​

U.S. – Top Yield Equity REITs – Find Price-To-FFO

Dividend yield is one of the main reasons why investors buy REIT stocks. Do not fall into the trap that higher yield means better stock. Funds from operations (FFO) is an important metric that measures cash generation. For REITs, FFO is a better indicator of performance than earnings.

Equity REITs Ranked by Dividend Yield

Total 169 Equity REITs

Share Price, Price-to-FFO, Dividend Yield – As of 10 April 2015

Sector’s Price-to-FFO – Median Price-to-FFO by sector

FFO in accordance with NAREIT definition from last available quarter (Mostly Q4-2014).

Some companies have not published FFO (That explains blank spaces).

# COMPANY TICKER PROPERTY SECTOR SHARE PRICE PRICE-TO-FFO SECTOR’S PRICE-TO-FFO DIV. YIELD
1 NorthStar Realty Finance Corp. NRF Diversified 18.31 8.7
2 Bluerock Residential Growth REIT, Inc. Class A BRG Residential 13.4 8.7
3 Gladstone Commercial Corporation GOOD Industrial/Office 18.5 7.1 16.1 8.1
4 Select Income REIT SIR Diversified 24.44 9.7 16.9 7.9
5 Government Properties Income Trust GOV Industrial/Office 22.49 10.0 16.1 7.6
6 Independence Realty Trust, Inc. IRT Residential 9.55 17.1 19.1 7.5
7 CorEnergy Infrastructure Trust, Inc. CORR Infrastructure 6.92 21.6 21.6 7.5
8 Senior Housing Properties Trust SNH Health Care 21.45 11.2 17.6 7.3
9 Whitestone REIT WSR Diversified 15.76 17.9 16.9 7.2
10 Investors Real Estate Trust IRET Diversified 7.33 10.8 16.9 7.1
11 City Office REIT, Inc. CIO Industrial/Office 13.27 18.4 16.1 7.1
12 Lexington Realty Trust LXP Diversified 9.68 9.7 16.9 7.0
13 UMH Properties, Inc. UMH Residential 10.44 16.3 19.1 6.9
14 One Liberty Properties, Inc. OLP Diversified 23.55 17.8 16.9 6.6
15 Chambers Street Properties CSG Industrial/Office 7.79 13.9 16.1 6.5
16 Armada Hoffler Properties, Inc. AHH Diversified 10.52 13.2 16.9 6.5
17 Preferred Apartment Communities, Inc. APTS Residential 11.14 11.1 19.1 6.3
18 EPR Properties EPR Diversified 58.5 13.3 16.9 6.2
19 Hospitality Properties Trust HPT Lodging/Resorts 31.97 9.2 16.3 6.1
20 Franklin Street Properties Corp. FSP Industrial/Office 12.55 11.6 16.1 6.1
21 STAG Industrial, Inc. STAG Industrial/Office 22.33 16.4 16.1 6.0
22 Gaming and Leisure Properties, Inc. WI GLPI Diversified 36.7 16.1 16.9 5.9
23 Medical Properties Trust, Inc. MPW Health Care 14.93 24.9 17.6 5.9
24 GEO Group Inc GEO Diversified 43.07 15.4 16.9 5.8
25 Spirit Realty Capital, Inc. SRC Retail 11.84 14.8 18.6 5.7
26 W.P. Carey Inc. WPC Diversified 66.92 16.9 16.9 5.7
27 Omega Healthcare Investors, Inc. OHI Health Care 38.86 14.3 17.6 5.6
28 CBL & Associates Properties, Inc. CBL Retail 19.1 5.8 18.6 5.5
29 Monmouth Real Estate Investment Corporation Class A MNR Industrial/Office 10.83 19.3 16.1 5.5
30 New Senior Investment Group Inc SNR Health Care 16.62 18.1 17.6 5.5
31 Agree Realty Corporation ADC Retail 32.65 14.3 18.6 5.5
32 Inland Real Estate Corporation IRC Retail 10.57 10.6 18.6 5.4
33 Corrections Corporation of America CXW Diversified 40.08 15.0 16.9 5.4
34 Liberty Property Trust LPT Industrial/Office 35.41 13.2 16.1 5.4
35 HCP, Inc. HCP Health Care 42.64 15.2 17.6 5.3
36 Trade Street Residential, Inc. TSRE Residential 7.18 35.9 19.1 5.3
37 First Potomac Realty Trust FPO Industrial/Office 11.34 10.5 16.1 5.3
38 Digital Realty Trust, Inc. DLR Diversified 65.22 11.6 16.9 5.2
39 DuPont Fabros Technology, Inc. DFT Diversified 32.43 14.0 16.9 5.2
40 Physicians Realty Trust DOC Health Care 17.53 23.1 17.6 5.1
41 Iron Mountain, Inc. IRM Diversified 37.17 33.2 16.9 5.1
42 Ashford Hospitality Trust, Inc. AHT Lodging/Resorts 9.59 15.0 16.3 5.0
43 Getty Realty Corp. GTY Retail 17.72 11.7 18.6 5.0
44 Sabra Health Care REIT, Inc. SBRA Health Care 31.78 14.7 17.6 4.9
45 BioMed Realty Trust, Inc. BMR Industrial/Office 21.24 15.2 16.1 4.9
46 National Health Investors, Inc. NHI Health Care 69.8 16.3 17.6 4.9
47 CareTrust REIT Inc CTRE Health Care 13.47 14.0 17.6 4.8
48 Universal Health Realty Income Trust UHT Health Care 53.81 18.4 17.6 4.7
49 Urstadt Biddle Properties Inc. Class A UBA Retail 21.76 22.7 18.6 4.7
50 Piedmont Office Realty Trust, Inc. Class A PDM Industrial/Office 18.25 11.4 16.1 4.6
51 Washington Real Estate Investment Trust WRE Diversified 26.11 16.3 16.9 4.6
52 Realty Income Corporation O Retail 49.51 19.3 18.6 4.6
53 OUTFRONT Media Inc. OUT Diversified 29.63 13.0 16.9 4.6
54 Excel Trust, Inc EXL Retail 15.82 26.4 18.6 4.6
55 Lamar Advertising Company Class A LAMR Diversified 60 10.5 16.9 4.5
56 LTC Properties, Inc. LTC Health Care 45.21 17.7 17.6 4.5
57 Columbia Property Trust, Inc. CXP Industrial/Office 26.62 13.6 16.1 4.5
58 Home Properties, Inc. HME Residential 67.68 14.6 19.1 4.5
59 New York REIT, Inc. NYRT Industrial/Office 10.27 11.2 16.1 4.5
60 Healthcare Realty Trust Incorporated HR Health Care 26.82 17.6 17.6 4.5
61 CatchMark Timber Trust, Inc. Class A CTT Timber 11.36 56.8 27.3 4.4
62 Chesapeake Lodging Trust CHSP Lodging/Resorts 31.88 21.0 16.3 4.4
63 Parkway Properties, Inc. PKY Industrial/Office 17.1 13.8 16.1 4.4
64 Ramco-Gershenson Properties Trust RPT Retail 18.34 91.7 18.6 4.4
65 Health Care REIT, Inc. HCN Health Care 76.19 22.1 17.6 4.3
66 Hersha Hospitality Trust Class A HT Lodging/Resorts 6.48 13.5 16.3 4.3
67 Ryman Hospitality Properties, Inc. RHP Lodging/Resorts 60.52 8.6 16.3 4.3
68 Healthcare Trust of America, Inc. Class A HTA Health Care 27.08 20.5 17.6 4.3
69 STORE Capital Corporation STOR Retail 23.36 18.3 18.6 4.3
70 RLJ Lodging Trust RLJ Lodging/Resorts 30.93 14.6 16.3 4.3
71 Retail Properties of America, Inc. Class A RPAI Retail 15.85 15.2 18.6 4.2
72 Education Realty Trust, Inc. EDR Residential 34.48 16.6 19.1 4.2
73 National Retail Properties, Inc. NNN Retail 40.68 18.2 18.6 4.1
74 Plum Creek Timber Company, Inc. PCL Timber 42.63 27.3 27.3 4.1
75 Sun Communities, Inc. SUI Residential 63.28 31.6 19.1 4.1
76 Chatham Lodging Trust CLDT Lodging/Resorts 29.4 32.0 16.3 4.1
77 Mid-America Apartment Communities, Inc. MAA Residential 75.67 14.0 19.1 4.1
78 Xenia Hotels & Resorts, Inc. XHR Lodging/Resorts 22.84 4.0
79 Host Hotels & Resorts, Inc. HST Lodging/Resorts 19.93 12.5 16.3 4.0
80 Winthrop Realty Trust FUR Diversified 16.24 4.0
81 CyrusOne, Inc. CONE Diversified 31.62 29.3 16.9 4.0
82 LaSalle Hotel Properties LHO Lodging/Resorts 37.83 16.3 16.3 4.0
83 Weingarten Realty Investors WRI Retail 34.86 17.1 18.6 4.0
84 Brandywine Realty Trust BDN Industrial/Office 15.21 12.7 16.1 3.9
85 Rouse Properties, Inc. RSE Retail 18.36 12.8 18.6 3.9
86 Kite Realty Group Trust KRG Retail 27.87 13.9 18.6 3.9
87 Crown Castle International Corp CCI Infrastructure 84.69 18.1 21.6 3.9
88 Retail Opportunity Investments Corp. ROIC Retail 17.71 21.1 18.6 3.8
89 Potlatch Corporation PCH Timber 39.14 20.0 27.3 3.8
90 Corporate Office Properties Trust OFC Industrial/Office 28.92 21.3 16.1 3.8
91 Pennsylvania Real Estate Investment Trust PEI Retail 22.12 9.4 18.6 3.8
92 Rayonier Inc. RYN Timber 26.35 94.1 27.3 3.8
93 EastGroup Properties, Inc. EGP Industrial/Office 60.13 16.5 16.1 3.8
94 DDR Corp. DDR Retail 18.3 20.8 18.6 3.8
95 Highwoods Properties, Inc. HIW Industrial/Office 45.32 15.3 16.1 3.8
96 Kimco Realty Corporation KIM Retail 25.91 17.0 18.6 3.7
97 Sotherly Hotels Inc. SOHO Lodging/Resorts 7.63 10.6 16.3 3.7
98 Camden Property Trust CPT Residential 76.63 19.4 19.1 3.7
99 American Campus Communities, Inc. ACC Residential 41.83 14.3 19.1 3.6
100 Weyerhaeuser Company WY Timber 32.25 26.0 27.3 3.6
101 DiamondRock Hospitality Company DRH Lodging/Resorts 13.95 18.4 16.3 3.6
102 Brixmor Property Group, Inc. BRX Retail 25.22 14.7 18.6 3.6
103 QTS Realty Trust, Inc. Class A QTS Diversified 36.5 16.9 16.9 3.5
104 Summit Hotel Properties, Inc., INN Lodging/Resorts 13.52 17.8 16.3 3.5
105 Gladstone Land Corp. LAND Diversified 12.16 32.3 16.9 3.5
106 Associated Estates Realty Corporation AEC Residential 24.37 18.5 19.1 3.4
107 Prologis, Inc. PLD Industrial/Office 42.49 20.8 16.1 3.4
108 Equity One, Inc. EQY Retail 26.09 26.1 18.6 3.4
109 UDR, Inc. UDR Residential 32.99 20.6 19.1 3.4
110 Urban Edge Properties UE Retail 23.99 3.3
111 CoreSite Realty Corporation COR Diversified 50.52 20.7 16.9 3.3
112 DCT Industrial Trust Inc. DCT Industrial/Office 33.76 18.3 16.1 3.3
113 Duke Realty Corporation DRE Industrial/Office 20.54 25.7 16.1 3.3
114 Tanger Factory Outlet Centers, Inc. SKT Retail 34.73 21.7 18.6 3.3
115 Sovran Self Storage, Inc. SSS Self Storage 91.95 21.3 22.4 3.3
116 Saul Centers, Inc. BFS Retail 53.79 21.7 18.6 3.2
117 Mack-Cali Realty Corporation CLI Industrial/Office 18.77 13.8 16.1 3.2
118 Macerich Company MAC Retail 81.35 20.5 18.6 3.2
119 Monogram Residential Trust Inc MORE Residential 9.4 39.2 19.1 3.2
120 Cousins Properties Incorporated CUZ Industrial/Office 10.1 10.5 16.1 3.2
121 Ventas, Inc. VTR Health Care 74.05 16.0 17.6 3.1
122 Alexandria Real Estate Equities, Inc. ARE Industrial/Office 95.01 27.6 16.1 3.1
123 Alexander’s, Inc. ALX Diversified 451.98 22.6 16.9 3.1
124 Rexford Industrial Realty, Inc. REXR Industrial/Office 15.91 20.9 16.1 3.0
125 Taubman Centers, Inc. TCO Retail 74.93 34.7 18.6 3.0
126 AvalonBay Communities, Inc. AVB Residential 168.31 23.9 19.1 3.0
127 Apartment Investment and Management Company Class A AIV Residential 37.83 17.5 19.1 3.0
128 Simon Property Group, Inc. SPG Retail 191.27 19.4 18.6 2.9
129 Regency Centers Corporation REG Retail 66.35 21.3 18.6 2.9
130 Equity Residential EQR Residential 75.62 21.7 19.1 2.9
131 Public Storage PSA Self Storage 193.69 22.3 22.4 2.9
132 Acadia Realty Trust AKR Retail 33.47 27.9 18.6 2.9
133 Post Properties, Inc. PPS Residential 55.87 19.1 19.1 2.9
134 Gramercy Property Trust Inc. GPT Diversified 28.14 35.2 16.9 2.8
135 Equity LifeStyle Properties, Inc. ELS Residential 52.89 20.0 19.1 2.8
136 Equinix, Inc. EQIX Diversified 239.65 2.8
137 Douglas Emmett, Inc DEI Industrial/Office 29.85 19.1 16.1 2.8
138 Terreno Realty Corporation TRNO Industrial/Office 22.76 28.5 16.1 2.8
139 Extra Space Storage Inc. EXR Self Storage 67.08 27.0 22.4 2.8
140 Pebblebrook Hotel Trust PEB Lodging/Resorts 44.78 26.0 16.3 2.8
141 WP GLIMCHER, Inc WPG Retail 16.01 8.7 18.6 2.7
142 CubeSmart CUBE Self Storage 23.41 22.5 22.4 2.7
143 Cedar Realty Trust, Inc. CDR Retail 7.54 15.7 18.6 2.7
144 Essex Property Trust, Inc. ESS Residential 222.19 24.3 19.1 2.6
145 First Industrial Realty Trust, Inc. FR Industrial/Office 20.25 15.8 16.1 2.5
146 PS Business Parks, Inc. PSB Industrial/Office 80.81 17.7 16.1 2.5
147 Federal Realty Investment Trust FRT Retail 142.42 31.5 18.6 2.4
148 General Growth Properties, Inc. GGP Retail 28.81 19.0 18.6 2.4
149 Vornado Realty Trust VNO Diversified 107.42 22.0 16.9 2.3
150 Silver Bay Realty Trust Corp. SBY Diversified 15.91 33.1 16.9 2.3
151 American Assets Trust, Inc. AAT Diversified 42.1 25.1 16.9 2.2
152 Starwood Waypoint Residential Trust SWAY Diversified 25.98 24.1 16.9 2.2
153 Paramount Group, Inc. PGRE Industrial/Office 18.67 12.0 16.1 2.0
154 Boston Properties, Inc. BXP Industrial/Office 137.58 27.3 16.1 1.9
155 SL Green Realty Corp. SLG Industrial/Office 127.85 22.4 16.1 1.9
156 Kilroy Realty Corporation KRC Industrial/Office 75.06 24.1 16.1 1.9
157 Empire State Realty Trust, Inc. Class A ESRT Industrial/Office 18.59 21.1 16.1 1.8
158 American Tower Corporation AMT Infrastructure 95.07 23.8 21.6 1.8
159 Hudson Pacific Properties, Inc. HPP Industrial/Office 31.97 33.3 16.1 1.6
160 FelCor Lodging Trust Incorporated FCH Lodging/Resorts 11.33 25.8 16.3 1.4
161 Ashford Hospitality Prime, Inc. AHP Lodging/Resorts 16.2 19.3 16.3 1.2
162 Sunstone Hotel Investors, Inc. SHO Lodging/Resorts 16.31 15.7 16.3 1.2
163 American Homes 4 Rent Class A AMH Diversified 17.23 39.2 16.9 1.2
164 American Residential Properties, Inc. ARPI Diversified 18.5 115.6 16.9
165 Easterly Government Properties, Inc. DEA Industrial/Office 16.22
166 Equity Commonwealth EQC Industrial/Office 26.2 13.9 16.1
167 Strategic Hotels & Resorts, Inc. BEE Lodging/Resorts 12.2 21.8 16.3
168 Campus Crest Communities, Inc. CCG Residential 6.85
169 American Realty Capital Properties, Inc. Class A ARCP Retail 9.73

Notes from the author

This is not a recommendation to buy or sell stocks. The highest-yield stocks are not necessarily the best choice for your portfolio. The purpose of this ranking is to shorten your stock analysis by enabling comparison of stock and sector performance. This is a snapshot of information available on 10 April 2015. Please perform your own due diligence before acting. The equity REITs are constituent companies of the FTSE NAREIT All REITs Index as of 31 March 2015. Companies whose equity market capitalization is lower than $100 million have been disregarded.Button



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Written by Heli Brecailo 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.​

U.S. REIT – First Quarter 2015 Performance

Release Date: 05 April 2015 (Extra Edition)

Total 170 Equity REITs Ranked by First Quarter 2015 Performance

# Q1-15 Ret – Ranking by First Quarter 2015 Return

# Div Yield – Ranking by Dividend Yield

Share Price, Dividend Yield – As of 02 April 2015


Property Sector: Self Storage

Sector’s Median First Quarter 2015 Return: 8.6

Sector’s Median Dividend Yield: 2.8

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 3 Extra Space Storage Inc. EXR 2.7 15.2 67.87 2.8
2 4 CubeSmart CUBE 4.1 9.4 24.01 2.7
3 1 Sovran Self Storage, Inc. SSS 2.1 7.7 93.95 3.2
4 2 Public Storage PSA (0.0) 6.6 197.31 2.8

Property Sector: Residential

Sector’s Median First Quarter 2015 Return: 5.8

Sector’s Median Dividend Yield: 3.5

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 4 Preferred Apartment Communities, Inc. APTS 5.8 18.9 10.68 6.6
2 20 Essex Property Trust, Inc. ESS 3.4 11.3 229.15 2.5
3 13 UDR, Inc. UDR 6.5 10.4 33.98 3.3
4 9 Sun Communities, Inc. SUI (1.3) 10.4 66.40 3.9
5 17 Equity Residential EQR 1.1 8.4 78.31 2.8
6 1 Bluerock Residential Growth REIT, Inc. Class A BRG 1.4 7.2 13.45 8.6
7 16 AvalonBay Communities, Inc. AVB 3.5 6.6 174.74 2.9
8 19 Equity LifeStyle Properties, Inc. ELS 2.0 6.6 55.14 2.7
9 12 Associated Estates Realty Corporation AEC 3.0 6.3 24.78 3.4
10 15 Apartment Investment and Management Company Class A AIV 4.5 5.9 38.96 2.9
11 10 Camden Property Trust CPT 7.3 5.8 78.52 3.6
12 6 Home Properties, Inc. HME 3.8 5.6 69.97 4.3
13 3 UMH Properties, Inc. UMH 6.4 5.4 10.24 7.0
14 11 American Campus Communities, Inc. ACC 3.9 3.7 43.36 3.5
15 8 Mid-America Apartment Communities, Inc. MAA 6.6 3.5 77.97 4.0
16 2 Independence Realty Trust, Inc. IRT 2.0 1.9 9.44 7.6
17 14 Monogram Residential Trust Inc MORE 1.2 0.6 9.42 3.2
18 21 Campus Crest Communities, Inc. CCG (8.1) (2.1) 6.85
19 18 Post Properties, Inc. PPS 0.1 (3.1) 56.90 2.8
20 7 Education Realty Trust, Inc. EDR 0.9 (3.3) 34.94 4.1
21 5 Trade Street Residential, Inc. TSRE (8.4) (6.9) 7.13 5.3

Property Sector: Infrastructure

Sector’s Median First Quarter 2015 Return: 4.9

Sector’s Median Dividend Yield: 3.9

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 1 CorEnergy Infrastructure Trust, Inc. CORR 3.1 6.9 6.98 7.4
2 2 Crown Castle International Corp CCI (4.4) 4.9 84.15 3.9
3 3 American Tower Corporation AMT (5.0) (4.8) 96.78 1.7

Property Sector: Health Care

Sector’s Median First Quarter 2015 Return: 3.6

Sector’s Median Dividend Yield: 4.6

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 9 Universal Health Realty Income Trust UHT 10.7 16.9 55.86 4.5
2 10 CareTrust REIT Inc CTRE 6.7 10.0 14.25 4.5
3 8 Sabra Health Care REIT, Inc. SBRA 1.4 9.2 33.35 4.7
4 2 Medical Properties Trust, Inc. MPW (2.6) 7.0 14.97 5.9
5 11 LTC Properties, Inc. LTC 3.1 6.6 46.09 4.4
6 6 Physicians Realty Trust DOC 7.1 6.1 17.62 5.1
7 15 Aviv REIT, Inc. AVIV 1.4 5.9 36.75 3.9
8 4 Omega Healthcare Investors, Inc. OHI 1.3 3.8 41.48 5.2
9 14 Healthcare Trust of America, Inc. Class A HTA 0.4 3.4 28.18 4.1
10 13 Health Care REIT, Inc. HCN 0.3 2.2 77.83 4.2
11 16 Ventas, Inc. VTR (1.9) 1.8 73.23 4.3
12 12 Healthcare Realty Trust Incorporated HR (2.7) 1.7 27.95 4.3
13 7 National Health Investors, Inc. NHI (0.2) 1.5 71.57 4.8
14 3 New Senior Investment Group Inc SNR (1.2) 1.1 16.72 5.5
15 1 Senior Housing Properties Trust SNH (0.7) 0.4 22.14 7.0
16 5 HCP, Inc. HCP 2.0 (1.9) 43.99 5.1

Property Sector: Industrial/Office

Sector’s Median First Quarter 2015 Return: 3.4

Sector’s Median Dividend Yield: 3.3

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 26 Terreno Realty Corporation TRNO 3.4 10.5 22.87 2.8
2 23 Alexandria Real Estate Equities, Inc. ARE 2.2 10.5 96.94 3.1
3 35 Hudson Pacific Properties, Inc. HPP 3.8 10.4 33.62 1.5
4 33 Kilroy Realty Corporation KRC 3.0 10.3 76.66 1.8
5 32 Boston Properties, Inc. BXP 2.2 9.2 140.93 1.8
6 1 Gladstone Commercial Corporation GOOD 2.4 8.4 18.65 8.0
7 31 SL Green Realty Corp. SLG 1.1 7.9 129.88 1.8
8 22 Duke Realty Corporation DRE 1.9 7.8 22.04 3.1
9 34 Empire State Realty Trust, Inc. Class A ESRT 6.3 7.0 18.84 1.8
10 12 Columbia Property Trust, Inc. CXP 4.4 6.6 27.23 4.4
11 10 BioMed Realty Trust, Inc. BMR 1.9 5.2 22.55 4.6
12 27 Douglas Emmett, Inc DEI 3.3 5.0 30.32 2.8
13 5 Franklin Street Properties Corp. FSP 1.5 4.5 12.92 5.9
14 28 PS Business Parks, Inc. PSB (0.2) 4.4 83.27 2.4
15 29 First Industrial Realty Trust, Inc. FR 0.7 4.2 21.38 2.4
16 30 Paramount Group, Inc. PGRE 5.2 3.8 19.32 2.0
17 17 Corporate Office Properties Trust OFC (0.1) 3.6 29.53 3.7
18 36 Equity Commonwealth EQC 0.4 3.4 26.61
19 18 Highwoods Properties, Inc. HIW 0.4 3.4 46.29 3.7
20 19 Prologis, Inc. PLD 2.0 1.2 43.59 3.3
21 21 Mack-Cali Realty Corporation CLI 2.5 1.2 19.30 3.1
22 24 Rexford Industrial Realty, Inc. REXR (1.4) 0.6 15.73 3.1
23 7 Monmouth Real Estate Investment Corporation Class A MNR (1.4) 0.4 11.20 5.4
24 15 Brandywine Realty Trust BDN 0.8 15.92 3.8
25 3 City Office REIT, Inc. CIO 1.3 (0.5) 13.05 7.2
26 2 Government Properties Income Trust GOV (2.3) (0.7) 22.92 7.5
27 13 New York REIT, Inc. NYRT 0.9 (1.0) 10.53 4.4
28 11 Piedmont Office Realty Trust, Inc. Class A PDM 1.5 (1.2) 18.83 4.5
29 37 Easterly Government Properties, Inc. DEA (0.3) (1.2) 16.23
30 4 Chambers Street Properties CSG (3.8) (2.2) 7.92 6.4
31 20 DCT Industrial Trust Inc. DCT (3.9) (2.8) 34.98 3.2
32 9 First Potomac Realty Trust FPO (0.5) (3.8) 11.93 5.0
33 6 STAG Industrial, Inc. STAG (5.7) (4.0) 23.58 5.7
34 16 EastGroup Properties, Inc. EGP (4.5) (5.0) 61.05 3.7
35 8 Liberty Property Trust LPT (4.1) (5.1) 36.27 5.2
36 14 Parkway Properties, Inc. PKY (1.5) (5.7) 17.61 4.3
37 25 Cousins Properties Incorporated CUZ (1.2) (7.2) 10.50 3.0


Property Sector: Diversified

Sector’s Median First Quarter 2015 Return: 3.1

Sector’s Median Dividend Yield: 4.6

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 9 Gaming and Leisure Properties, Inc. WI GLPI 8.9 25.7 37.25 5.9
2 23 CoreSite Realty Corporation COR 2.6 24.7 50.41 3.3
3 20 CyrusOne, Inc. CONE 4.7 13.0 31.61 4.0
4 21 Gladstone Land Corp. LAND 1.2 12.6 12.10 3.5
5 7 Armada Hoffler Properties, Inc. AHH (1.3) 12.3 10.58 6.4
6 16 OUTFRONT Media Inc. OUT (0.1) 11.5 29.75 4.6
7 12 Corrections Corporation of America CXW 0.9 10.8 40.36 5.4
8 17 Lamar Advertising Company Class A LAMR 2.0 10.5 59.58 4.6
9 30 American Assets Trust, Inc. AAT 5.5 8.7 43.24 2.2
10 10 GEO Group Inc GEO 1.4 8.4 44.46 5.6
11 22 QTS Realty Trust, Inc. Class A QTS 1.7 7.6 37.06 3.5
12 3 Whitestone REIT WSR 0.6 5.1 15.96 7.1
13 19 Winthrop Realty Trust FUR 1.4 4.7 16.20 4.0
14 24 Alexander’s, Inc. ALX 3.7 4.4 452.99 3.1
15 8 EPR Properties EPR (1.6) 4.2 60.72 6.0
16 6 One Liberty Properties, Inc. OLP 3.1 3.2 24.21 6.4
17 1 NorthStar Realty Finance Corp. NRF (5.7) 3.1 18.22 8.8
18 25 Equinix, Inc. EQIX 3.9 2.7 235.60 2.9
19 32 American Residential Properties, Inc. ARPI 3.7 2.4 18.42
20 2 Select Income REIT SIR 1.2 2.4 25.04 7.7
21 26 Gramercy Property Trust Inc. GPT (0.5) 1.7 28.45 2.8
22 18 Washington Real Estate Investment Trust WRE (2.5) (0.1) 27.88 4.3
23 13 Digital Realty Trust, Inc. DLR (0.6) (0.5) 65.84 5.2
24 15 DuPont Fabros Technology, Inc. DFT 4.4 (1.7) 32.93 5.1
25 29 Starwood Waypoint Residential Trust SWAY 2.7 (2.0) 25.80 2.2
26 28 Silver Bay Realty Trust Corp. SBY (2.4) 16.16 2.2
27 31 American Homes 4 Rent Class A AMH (0.8) (2.8) 16.69 1.2
28 11 W.P. Carey Inc. WPC (0.8) (3.0) 68.72 5.5
29 27 Vornado Realty Trust VNO 1.8 (4.9) 111.21 2.3
30 14 Iron Mountain, Inc. IRM (0.7) (5.6) 37.15 5.1
31 4 Investors Real Estate Trust IRET (2.1) (8.2) 7.40 7.0
32 5 Lexington Realty Trust LXP (9.2) (10.5) 10.05 6.8

Property Sector: Retail

Sector’s Median First Quarter 2015 Return: 2.7

Sector’s Median Dividend Yield: 3.6

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 32 Federal Realty Investment Trust FRT 3.6 10.3 148.45 2.3
2 16 Retail Opportunity Investments Corp. ROIC 9.3 9.0 18.21 3.7
3 28 Acadia Realty Trust AKR 2.1 8.9 34.87 2.8
4 34 American Realty Capital Properties, Inc. Class A ARCP 0.4 8.8 9.92
5 8 Realty Income Corporation O 3.1 8.2 52.05 4.4
6 9 STORE Capital Corporation STOR 3.1 8.1 23.50 4.3
7 27 Simon Property Group, Inc. SPG 2.8 7.4 199.36 2.8
8 20 Brixmor Property Group, Inc. BRX 4.5 6.9 26.44 3.4
9 19 Kimco Realty Corporation KIM 2.2 6.8 26.61 3.6
10 26 Regency Centers Corporation REG 3.7 6.7 68.41 2.8
11 2 Agree Realty Corporation ADC 0.4 6.0 33.23 5.4
12 7 Urstadt Biddle Properties Inc. Class A UBA 1.5 5.4 22.70 4.5
13 22 Equity One, Inc. EQY (0.3) 5.2 26.93 3.3
14 33 General Growth Properties, Inc. GGP 1.9 5.0 30.04 2.3
15 5 Excel Trust, Inc EXL 2.3 4.7 14.06 5.1
16 12 National Retail Properties, Inc. NNN 1.8 4.1 41.60 4.0
17 14 Weingarten Realty Investors WRI (0.7) 3.0 36.03 3.8
18 15 Rouse Properties, Inc. RSE 9.7 2.4 19.22 3.7
19 31 Cedar Realty Trust, Inc. CDR 0.1 2.0 7.56 2.6
20 3 CBL & Associates Properties, Inc. CBL (1.1) 2.0 19.79 5.4
21 1 Spirit Realty Capital, Inc. SRC (1.4) 1.6 12.30 5.5
22 17 DDR Corp. DDR (1.7) 1.4 18.85 3.7
23 23 Macerich Company MAC 0.8 1.1 80.66 3.2
24 25 Taubman Centers, Inc. TCO 6.6 0.9 76.95 2.9
25 24 Saul Centers, Inc. BFS 6.2 0.0 56.92 3.0
26 6 Getty Realty Corp. GTY 0.9 (0.1) 18.27 4.8
27 21 Urban Edge Properties UE (1.0) (0.1) 23.64 3.4
28 10 Ramco-Gershenson Properties Trust RPT (0.6) (0.7) 18.84 4.2
29 18 Pennsylvania Real Estate Investment Trust PEI 2.0 (1.0) 23.08 3.6
30 13 Kite Realty Group Trust KRG (0.5) (2.0) 28.18 3.9
31 4 Inland Real Estate Corporation IRC (0.1) (2.4) 10.79 5.3
32 29 WP GLIMCHER, Inc WPG (4.0) (3.4) 16.40 2.7
33 11 Retail Properties of America, Inc. Class A RPAI 1.3 (4.0) 16.10 4.1
34 30 Tanger Factory Outlet Centers, Inc. SKT (0.8) (4.8) 35.85 2.7

Property Sector: Lodging/Resorts

Sector’s Median First Quarter 2015 Return: (0.7)

Sector’s Median Dividend Yield: 3.9

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 4 Ryman Hospitality Properties, Inc. RHP 1.3 15.5 62.32 4.2
2 13 Summit Hotel Properties, Inc., INN 7.2 13.1 13.98 3.4
3 8 Xenia Hotels & Resorts, Inc. XHR 8.0 8.3 23.21 4.0
4 1 Hospitality Properties Trust HPT 7.1 6.4 33.46 5.9
5 15 FelCor Lodging Trust Incorporated FCH 6.7 6.2 11.94 1.3
6 14 Pebblebrook Hotel Trust PEB (4.1) 2.1 46.33 2.7
7 7 Chatham Lodging Trust CLDT 1.3 1.5 29.67 4.0
8 11 Sotherly Hotels Inc. SOHO 0.1 1.5 7.74 3.6
9 16 Sunstone Hotel Investors, Inc. SHO (4.5) 1.0 16.99 1.2
10 17 Ashford Hospitality Prime, Inc. AHP 3.1 (2.3) 17.09 1.2
11 10 LaSalle Hotel Properties LHO (0.2) (4.0) 39.17 3.8
12 12 DiamondRock Hospitality Company DRH (2.4) (5.0) 14.32 3.5
13 18 Strategic Hotels & Resorts, Inc. BEE (5.3) (6.0) 12.54
14 5 RLJ Lodging Trust RLJ (1.6) (6.6) 31.76 4.2
15 3 Hersha Hospitality Trust Class A HT (3.6) (8.0) 6.55 4.3
16 2 Ashford Hospitality Trust, Inc. AHT (9.7) (8.2) 9.86 4.9
17 6 Chesapeake Lodging Trust CHSP (4.9) (9.1) 33.87 4.1
18 9 Host Hotels & Resorts, Inc. HST (3.9) (15.1) 20.49 3.9

Property Sector: Timber

Sector’s Median First Quarter 2015 Return: (3.5)

Sector’s Median Dividend Yield: 3.8

Q1-15 RET # DIV YIELD # COMPANY TICKER RETURN MAR-15 RETURN Q1-15 SHARE PRICE DIV. YIELD
1 1 CatchMark Timber Trust, Inc. Class A CTT (3.4) 3.5 11.67 4.3
2 2 Plum Creek Timber Company, Inc. PCL 0.0 1.5 43.41 4.1
3 3 Rayonier Inc. RYN (1.6) (3.5) 26.45 3.8
4 4 Potlatch Corporation PCH 0.3 (4.4) 39.70 3.8
5 5 Weyerhaeuser Company WY (5.6) (7.6) 32.64 3.6

Notes from the author This is not a recommendation to buy or sell stocks. The highest-performing stocks are not necessarily the best choice for your portfolio. The purpose of this ranking is to shorten your stock analysis by enabling comparison of stock and sector performance. This is a snapshot of information available on 02 April 2015. Please perform your own due diligence before acting. The equity REITs are constituent companies of the FTSE NAREIT All REITs Index as of 31 March 2015. Companies whose equity market capitalization is lower than $100 million have been disregarded. Button


Did you enjoy our newsletter? Subscribe and receive for free our biweekly newsletter in your inbox. We won’t sell your email address to third parties. It’s our privacy policy! Subscribe for free to our biweekly newsletter


Written by Heli Brecailo 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.​

When the fundamentals aren’t being discussed

Release Date: 04 April 2015 (Extra Edition)

Last week, I posted a ranking of the US top-yield equity REITs. NorthStar Realty Finance Corp (NYSE: NRF) topped the list, sporting an 8.8 percent dividend yield. This week the stock is up slightly (0.7 percent), but the dividend yield continues to be attractive. As such, the stock is worth exploring in a little more detail. However, a look at NorthStar’s recent press releases shows that property fundamentals have not been the main point of discussion.

Background

NorthStar Realty is a Maryland-based diversified portfolio REIT in the commercial real estate realm, allocated largely in the health care and hotel sectors (65 percent of the 31 December 2014 portfolio). Its European assets will likely be spun out into a new NYSE publicly-traded company called NorthStar Realty Europe (NRE) by the second half of 2015. Over the past five weeks, NorthStar has raised US$ 353 million in common equity to buy properties in Europe, including the recently-closed acquisition of a €1.1 billion pan-European office portfolio.

Although it went public in October of 2004 as a mortgage REIT, NorthStar recently flipped into an equity REIT. It still has a debt component, but this is a minor portion of the portfolio (6.6 percent of its portfolio).

This past June NorthStar segregated its management off into NorthStar Asset Management Group Inc. (NYSE: NSAM), and since then both companies have been trading separately. NSAM acts as a brokerage firm for four non-traded REITs.

“Tension” between traded and non-traded

Conflict of interest has been the “elephant in the room” for this REIT. NSAM manages several funds, and there are questions about how management will deal with competing interests between different funds’ shareholders.

For instance, one question is whether NSAM will be able to fairly oversee both a traded fund (NRF) and non-traded funds, which have different asset management fee levels (management, acquisition, disposition and incentive fees). Remember that NSAM manages a pipeline of potential acquisitions and so must choose which fund gets to pick the best deals. This concern was also raised when the company decided to use NRF’s common equity offering proceeds to promote NorthStar Realty Europe’s growth and consequently spin it off. Although management argues that the spin-off unlocks value (as they discussed in their 6 March 2015 presentation, “Immediate value to NRF”), it still isn’t clear what’s in it for NRF.

This is a cloud hanging over NRF that could potentially harm stock performance in the long run. In my experience, concerns over conflict of interest have always driven share prices to discount territory that never realizes full value.

European arm

NorthStar’s European assets are valued at approximately $2.0 billion, and the real estate portfolio is comprised of 50 properties with five million square feet in prime locations, mainly in the United Kingdom, Germany, and France.

There are a number of positive points for NorthStar Realty Europe as part of an investment strategy. European real estate valuations haven’t recovered since the Great Recession. Cap rates relative to long-term interest rates have reached an all-time high. Upside on property value as appreciation of European REITs has historically signaled future appreciation of properties. And, of course, property diversification by country and type is almost always a valuable strategy.

Short interest spike

This March, short interest in NorthStar Realty rose more than 1,000 percent to 57,093,856 shares. About 19.2 percent of the company’s shares are now short.

Takeaway

Recent news associated with changes in management arrangements and the European spin-off has put NRF’s fundamentals on the back burner. I’m hoping that NSAM will refocus its energies on what matters. By the way, NorthStar is one of the few REITs (perhaps the only one) that does not disclose the operational metrics AFFO/FFO in its 10-K report.

Source: NorthStar Realty website, WSJ


Did you enjoy our newsletter? Subscribe and receive for free our biweekly newsletter in your inbox. We won’t sell your email address to third parties. It’s our privacy policy!

Subscribe for free to our biweekly newsletter


Written by Heli Brecailo

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.​