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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (27046)7/2/2007 11:50:38 PM
From: Spekulatius  Read Replies (2) of 78469
 
BDN and CLI -

I bought some BDN. Attracted to the decent yield (6.2%, and low market cap/FFO ratio: 11.5). upon further looks however, i believe the close peer CLI may be better buy:
Although dividend yield is lower and FFO/market cap is higher, the REIT is cheaper when you take into account the much lower leverage of CLI. Both have almost exactly the same rent income but BDN has about 3.2B$ in debt while CLI has only 2B$. Based on EV value CLI is by about 300M$ cheaper and CLI also has the better LT track record. If opportunity arises, i am going to switch from BDN to CLI.Differences aside I like both since they have a lot of properties in NJ,e adjacent to the red hot Manhattan property market. If there is a spillover into NJ, those REIT's should be doing very well. Both should be good candidates for a private equity takeout - the valuation is much better than what Blackstone paid for EOP.
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