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Strategies & Market Trends : Bear Market Momentum Investing -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (47)	3/16/2008 11:38:16 AM
From: Perspective	Read Replies (2) \| Respond to of 248

Retail REITs - Please chime in: Here are retail REITs with price-to-book >2.0, according to Yahoo: finance.yahoo.com I think this should be fertile ground for shorting. SPG VNO GGP and KIM are the biggies in the group on Market Cap. I was originally thinking that their size would be to their advantage. HOWEVER - on further consideration, I think they're more likely to hold older properties that will suffer the first loss on retail closures, don't you think? `BC

To: patron_anejo_por_favor who wrote (47)	3/16/2008 4:54:58 PM
From: Perspective	Respond to of 248

Here's a little REIT commentary: thestreet.com One REIT trader says there is a disconnect today between high-quality and low-quality names in the sector. He recommends shorting names with high yields but lower-quality buildings, like Pennsylvania REIT(PEI - Cramer's Take - Stockpickr) and Glimcher Realty Trust(GRT - Cramer's Take - Stockpickr), while owning high-quality names like Simon Property Group(SPG - Cramer's Take - Stockpickr), Vornado Realty(VNO - Cramer's Take - Stockpickr), Boston Properties(BXP - Cramer's Take - Stockpickr) and Federal Realty Trust(FRT - Cramer's Take - Stockpickr). They also recommend buying SLG and AVB on hopes of a short squeeze. Perhaps they're just good shorts: Office landlords have been hurt lately by uncertainty over the job fallout from the financial services industry in New York City. SL Green, which has heavy exposure to prime office buildings in midtown Manhattan, now carries a 13% short interest. SL Green shares fell 3.6% to $79.91 Friday, partly due to worries of a liquidity crisis at Bear Stearns(BSC - Cramer's Take - Stockpickr). In a research report Friday, Bank of America analyst Christy McElroy said she met with SL Green's leasing team this week and left "with the impression that despite all of the negative headlines about the New York office market, leasing continues to be vibrant with solid rent spreads (year to date)." For example, 100,000 square feet of space was leased at SL Green's 711 3rd Ave. building at a 34% rent spread from the previous lease, she says. Additionally, 156,000 of space was leased a 333 W. 34th St. at a 38% spread. Luxury apartment developer AvalonBay(AVB - Cramer's Take - Stockpickr) could also be due for a bounce, according to squeezetrigger.com, a Web site that looks at technicals in stocks for trading ideas. The site on Friday said AvalonBay, which has a 14% short interest, rose above the $94.99 short squeeze trigger price on Thursday. In recent trading, shares were down $2.15, or 2.2%, to $93.84. SLG has already been going down for a year, but still trades well above book: finance.yahoo.com `BC

To: patron_anejo_por_favor who wrote (47)	3/16/2008 4:56:01 PM
From: Perspective	Read Replies (1) \| Respond to of 248

GGP vs. SGP - Here's a little more REIT help: thestreet.com So how should an investor play the REIT sector? Here are two simple strategies: # Avoid stocks with problematic debt maturities. Look at the capital position of the company and when debt maturities are coming due. This information can be found in the footnotes of 10-K filings. In a difficult credit environment, refinancing mortgages is becoming harder. It's best to stay away from companies that have debt maturities they potentially can't cover. General Growth Properties(GGP - Cramer's Take - Stockpickr), for instance, took on a lot of debt to finance its purchase of Rouse in 2005. While General Growth owns very nice malls, "it's a very bad time to have too much debt," says Moore, the RBC analyst. General Growth has $2.6 billion of debt maturities coming due in 2008, and $3.2 billion due in 2009, according to the company's latest annual report. It has only $221 million available on its $650 million revolving credit facility. Although the company has wiggle room today, "if credit markets worsened, GGP might find itself in a bit of a problem," says Moore, who rates the stock underperform. In contrast, fellow mall giant Simon Property Group(SPG - Cramer's Take - Stockpickr) has $1.1 billion open on its $3.5 billion credit facility that can be used to fund long-term debt maturities as they come due. Simon has $809.7 million of debt coming due in 2008, and $1.6 billion in 2009. This clean balance sheet is a major reason the stock is a top holding of real estate mutual funds. # Remember that lower-quality retail or apartment owners may have problems with growth. It's important to look at the quality of earnings streams, and lower-quality REITs may run into trouble on that front. Think about it conceptually for a moment. Low-quality apartment and retail buildings in general also have worse-quality tenants. Landlords of such buildings, therefore, have lower pricing power, and existing tenants have higher risk of default. Green Street's Kirby says there is some evidence this year that investors are mistakenly focusing more attention on "junk REITs" -- those that are high dividend-paying, have higher yields on funds from operations, higher leverage and/or lower quality portfolios. "Many of these REITs have fared better than average over the last couple of months, as unsophisticated investors searching for bargains/yield often pile in to these names first," Kirby says. But instead of chasing dividend yields, investors should look for a quality earnings steam. For example, Federal Realty(FRT - Cramer's Take - Stockpickr) is considered to be the highest quality of the shopping center REITs. Federal also has a clean balance sheet and has had some of the highest spreads on new leases of any retail REIT in recent years. Federal recorded 11.4% growth in funds from operations per share in 2007. Analysts expect another 7.8% FFO per share growth in 2008. There is a good reason why Federal enjoys one of the highest price-to-FFO multiples among REITs. Growth, combined with safety, are the best way to play REITs today. `BC

To: patron_anejo_por_favor who wrote (47)	3/17/2008 2:42:59 AM
From: Perspective	Read Replies (1) \| Respond to of 248

Another REIT - DDR - found info on tenants from 10K. Wholly-Owned Properties Joint Venture Properties % of % of % of % of Shopping Center Company-Owned Shopping Center Company-Owned Base Rental Shopping Center Base Rental Shopping Center Tenant Revenues GLA Revenues GLA Wal-Mart/Sam’s Club 5.2% 8.5% 1.8% 3.3% Lowe’s Home Improvement 2.3 3.9 0.7 1.1 PetSmart 2.0 1.6 2.4 2.3 T.J. Maxx/Marshalls/A.J. Wright/Homegoods 1.9 2.4 2.6 3.3 Eckerd Drug 1.7 0.8 — — Circuit City 1.7 1.2 1.4 1.3 Bed, Bath, & Beyond 1.6 1.4 1.6 1.8 Home Depot 1.3 1.8 0.3 0.5 Ahold USA 1.3 1.1 1.5 1.7 Michaels 1.3 1.2 1.5 1.7 Kohl’s 1.2 1.8 2.1 3.6 Mervyns 0.2 0.1 4.4 4.7 Publix Supermarkets 0.4 0.6 2.6 3.6 Linens ’n Things 0.8 0.5 1.6 1.6 Ross Dress For Less 0.9 0.8 1.6 1.9 `BC