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Strategies & Market Trends : Value Investing

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To: Grommit who wrote (32879)	11/27/2008 1:44:04 PM
From: E_K_S	1 Recommendation Read Replies (1) of 78715

Hi Grommit - Colonial Properties Trust (CLP) looks interesting but I do not like their regional exposure for their real estate holdings, specifically for their residential portfolio ( colonialprop.com ). They appear to have heavy exposure in Texas and North & South Carolina . Their mixed use and commercial property exposure also includes several projects in Florida which may be impacted more than other regions if we have a prolonged recession. It's hard to determine from their web page their costs and revenues on their different projects to determine if any one region is impacting their total portfolio holdings. Finally, from a cursory inspection, many of their projects seem to have been built within the last five years which indicates that the company has a relatively high acquisition cost when compared to other more established REITs like HRP. Therefore, BV may be overstated for CLP and significantly understated for HRP. That said, I did notice some very large and recent insider Buys for CLP ( finance.yahoo.com ) which indicates to me that management believes the stock is quite undervalued. Both FIRST IND RLTY INC (NYSE:FR) and HRPT PROPERTIES (NYSE:HRP) are of interest to me as these companies have several properties that were acquired years ago with a very low cost basis. finance.yahoo.com Although these companies have levered up on debt in the last five years, they are working down their exposure to more reasonable levels. So far, rental incomes remain stable w/ good (staggered) long term leases while vacancy rates remain low (about 5%). The only insider buying I have seen is for FR of 1 million shares by SHIDLER JAY H a director during November 2008 ( finance.yahoo.com ) at prices between $5.50/share and $6.00/share. That's a lot of skin in the game for a director. I have CLP on my watch list. When calculating my dividend income for 2009, I have cut my REIT income amounts by 50% so I will not be too disappointed on any future dividend cuts. EKS

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