Until just a few years ago, I was a commercial broker in the DC area(since moved to San Diego). I also knew and worked with WRE, mostly in the old Frank Kahn days(boy, did the brokers around town hate dealing with that obstinate old coot!).
I can tell you that they are run conservatively, all right - stingily, many would say. Problem is that they generally own a lot of Class B, older properties.(too cheap to have paid up for the better ones), with lots of functional obsolescence and deferred maintenance.
Many of the neighborhoods that they are in are on the decline, so the rental outlooks in these retail areas aren't stellar. Sure, some of the old leases will turn over, but, much of that has already occurred, and many of their centers are small and not attractive for large grocery chains or category killers - and the relative mom and pops they deal with are among those being hurt the most by the new, larger power centers.
Also, they own a fair amount of industrial, which, believe me, is very vulnerable to a bad recession(I lived through the '73-74 recession, owning and managing such properties). Same goes for their office buildings, which are generally not of the quality that attracts Fortune 500 companies.
The apartments they own are generally old, and probably need lots of rehab(lead paint issues abound, I suspect).
I've always thought WRE was generally overated, and it shares overpriced, relative to just about any of its peers.
JMHO. |
