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Strategies & Market Trends : Value Investing

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To: Grommit who wrote (31432)	7/10/2008 12:14:26 PM
From: E_K_S	Read Replies (1) of 78699

Hi Grommit - I have been accumulating REITs the last 45 days and they seem to be moving lower along with the financials. The vacancy rates are quite low on the properties I own and the FFO's are good and increasing YOY. However the market seems to be pricing in a risk premium for potential future dividend cuts based on the small probability of a long entrenched deep recession. The two positions I have been adding to are (1) HRPT PROPERTIES (NYSE:HRP) and (2) BRANDYWINE REALTY TR (NYSE:BDN): finance.yahoo.com Both are trading at multi year lows, Each company has announced the payment of their next dividend (which yield 11%-12%). BNDY already went xdividend July 3 but HRP goes xdividend July 25. According to YAHOO they are selling below their book value and each have positive increasing FFO. BDN recently sold some West Coast properties with the proceeds used to reduce their long term debt. This move will help them weather any significant slow down should a deep recession impact their FFO. BDN is owned by a lot of institutions (major REIT mutual funds) and as they sell there is limited price support. It's still hard to see the prices continue to move lower and I hope a bottom is established soon. I guess the key thing to watch for is some capitulation followed by a significant amount of volume. I am out of all of my financials except for NYB and have moved the proceeds to REITs. If you go to each of the companies Web pages, you can see all of the properties in their portfolio and their specific lease terms. HRPT PROPERTIES (http://www.hrpreit.com/) BRANDYWINE REALTY TR (http://www.brandywinerealty.com Properties/Map.aspx ) As a value investor, I like that I can see the specific assets and my investment is collateralized by brick & mortar buildings rather than by some "virtual" CMO/CDO electronic accounting entry. EKS

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