Thanks for the DLR perspective/opinion.
Seeing the return on invested capital so low seems discouraging. Otoh, it may not be uncommon to have such a low number on reits. So it doesn't frighten me off. Maybe it should... on DLR and the other the reits I hold that show such a low number (e.g. FSP)
In the reit sphere in which I'm familiar, I don't see where any particular real estate reit has a moat. Whether the rein's specialty is commercial property, hotel, or apartment, each reit competes in a geographic area in which there are multiple competitors -- other reits, insurance company property owners, etc. And that competitive landscape hasn't caused me not to buy a reit.
It's possible AMZN, GOOG are big enough to dominate and set prices. Doesn't mean DLR can't get their share of business. I presume, just based on other reits competing for business in their sectors.
On the one hand, I guess going with GOOG, AMZN is a one-stop shop for the customer. Otoh, I'm not so sure the economics of these two companies owning/leasing buildings and the equipment inside them and thus having depreciation expense, is a good way to help prop up their high p/e's (even if this part of the business is quite small relatively). Although I don't believe GOOG/AMZN can destroy DLR's business model, apparently many people do believe that; the stock has cratered reflecting that. And maybe there's more to come. My intent now though, is to continue to hold, hoping for a better 2014. |
