George,
I like WRE as I live in metro DC and know some of their properties and recent acquisitions. Just the price is a year ahead of itself above 17. It trades at a premium like PSA and PTR and should be bought during a bull run of REIT's. During times of worry, the highest FFO multiple REIT's will contract more than the ones around 10 or 11. BTR has a faster growth rate and is going ex in just 1 week and is trading about 11 x FFO instead of 13-1/2. Still for the very long term WRE will likely be a great return of 13-18% combined. I try to trade it from 15-3/4 to 17 for now.
When a fund sells off a REIT and no one is their to take up the slack, they drive it down until they either get impatient and sell off in a climax, or just refuse to chase it any lower. Then it stagnates until the seller (and a few straggler sellers) are gone. Then it recovers 50-80% on light volume. (Look at GTA today. It ran to 27-1/2 after finally crossing 26-1/2 in the last 2 days, and then heavy selling pushed it back towards 27 at the close.) GGP was another good example when it dropped all the way to 32 two weeks ago and then climbed back to 36 in a week on normal volume. That is what appears to be going on with BTR and when it crosses 20-1/4 again, it should run to 21 quickly, where I think it belongs in the 20-1/2 to 22 range now.
PAG and LXP appear to be under accumulation. CEI and UDR are also, but they are much further along. BED should run strong when it crosses 20-3/8.
I hope utilities keep climbing rapidly. When they get frothy, lots of players will exit them for REIT's hoping for another quick 10% swing.
The 30 year treasuries seem to have stalled out momentarily and with this next employment report coming next Friday, the market and treasuries could be in trouble. If employment starts to get dangerously strong in Greenspan's mind, but he can't raise rates due to the Asia situation, then eventually Gold will have to run from it's pitiful levels since inflation will occur when all the competent workers are already employed and need to be bribed away with bigger offers that are significatnly superior to their present salaries. Or maybe there won't ever be inflation again. ... But if there is inflation and Greenspan can't fight it, then REIT's will be as good as any investment since they are 30-50% leveraged and will increase in value by the inflation rate and their leverage ratios. They will get hit initially as will the market in general if inflation does appear.
SIZ is down to an 8 FFO multiple near 10. It just went ex today, but with very light volume recently, the first buyer trying to accumulate 20,000 shares should drive the price up 4-6% by themselves.
Lots of new REIT IPO's this month. TCW, AMB, LNR, BFSC, PGE, EPR, LMM, and Capital Automotive Trust going Friday? (RSE announced that they are converting to a REIT also)
Happy Thanksgiving,
Richard |
