REIT Watch – courtesy © buchachon – Fotolia.com

Annaly Capital Management Inc (NYSE:NLY) — 12.2% YIELD

Annaly Capital is of particular interest not simply for the high yield, or for their president’s purchase of $1.39 million at the end of 2012, but for the positive news about the REIT. What makes this group a solid one “to watch” is the Q 4 2012 net income of $700.5 million. Wellington J. Denahan, CEO of Annaly, expressed the mood for this stock via their last reporting:

 “In our market, indeed every market, decisions made by policymakers continue to have exceptional influence on pricing and behavior. Nevertheless, as our results demonstrate, we continue to navigate through these uncertain waters to identify attractive relative value opportunities on both sides of our balance sheet. These market conditions are likely to persist, however, as structural imbalances here and abroad continue to affect economic activity. In this environment, we believe that remaining conservative in our management approach is in the best long-term interests of shareholders.”

Keys: Essential to this REITs value is their ability to continue outmaneuvering not only competitors, but  the FED at buying the mortgage backed securities.

ARMOUR Residential REIT Inc. (NYSE:ARR) — 13.6% YIELD

ARMOUR is another high yield REIT focused on mortgage backed securities. If insider buys have anything to do with a stock’s value, then the several hundred million key ARMOUR execs have purchased recently give clues to another group to watch. Why is this stock interesting? Beyond the high yield, ARMOUR Residential just announced last week their offering of Series B preferred. Looking at yesterday’s close, the movement seems to trend upward 7.11 +0.06 (0.85%) 

Keys: Not unlike Annaly, movements by the FED impact ARMOUR heavily. Despite the fact the stock is undervalued, a lot depends on competition for the dwindling pool of securities they thrive on.

Two Harbors Investment Corp (NYSE:TWO) — 18.0% YIELD

Two Harbors, harbors all the potential return the other two REITs do, but with a much bigger bang. 18% is a whopping yield, but the aforementioned Oasis of securities drying up has to shake confidence in these securities backed funds. Here, insider investing is a lot less confident too, the key people at Two Harbors only having only invested several hundred thousand compared with the tens of millions competing groups have in their own wares.

Keys: Can the robust stock break out with a better return on equity? Will the conversion of Silver Bay Realty Trust Corp. (SBY) shares next month render the expected value? Everyone says “buy” this one.

American Capital Mortgage Investment Corp. (NASDAQ:MTGE) — 14.2% YIELD

America Capital is another real estate investment trust which focuses on mortgage instruments of several types. Just yesterday the group announced their IPO of some 20,000,000 shares, just after having announced Q4 2012 earnings per share of $1.40 per. On the face of this stock, everything suggests “buy”, but a few too many press releases focused on their movement puzzles this writer.

Keys: Confidence by the investment reporting community. Somehow so few seem willing to rate this trust either way? The stock closed yesterday at 25.70 -0.87 (-3.27%)

AG Mortgage Investment Trust Inc (NYSE:MITT) — 12.6% YIELD

Ditto for AG. Again, mortgage backed securities will  spell win or lose for this trust. Insider investment here has not been robust compared with the others mentioned. What makes this stock a real horse to watch is the strong dividend history exhibited. Forbes points to this in an evaluation here, but given the yield and the relatively fantastic price to book ratio, it’s no wonder lots of eyes are on this investment.

Keys: Figuring out whether or not MITT can maintain this same strong dividend legacy. WATCH THIS ONE

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Apollo Residential Mortgage, Inc. (NYSE:AMTG) — 12.6% YIELD

AMTG sits in the top spot in the Dividend Channel’s list, in part because of the clear upward trending of the fund. What’s interesting for us about Apollo is that the fund has so little news related to the movement of their shares. Other than the announcement for their Q4, the fund seems to chug along unassumingly. However, yesterday’s close trended more toward the stock tanking than triumphing. However, the dividend trail tells of a stock rock steady throughout the last 12 months.

Keys: Maintaining this dividend yield strength, something that is to a degree dependent on the funds competitiveness at buying. So far the trend shows they are top notch shape shifters where reacting is concerned.

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NORTHWEST INTERNATIONAL HEALTHC (MOB-UN.V) – courtesy Yahoo! Finance

The REIT and a syndicate of underwriters led by GMP Securities L.P. and National Bank Financial Inc. and including Scotia Capital Inc., Canaccord Genuity Corp., Desjardins Securities Inc. and Macquarie Capital Markets Canada Ltd. exercised their rights to purchase these shares. According to the limited news release, the over-allotment proceeds of this deal are to be leveraged to further the REIT’s international healthcare real estate strategy and possibilities for future acquisitions.

The REIT is an unincorporated, open-ended real estate investment trust in Ontario which includes investments via Vital Healthcare Property Trust (NZX: VHP). It also has interests in a portfolio of some 32 properties comprised of 1.8 million square feet of income producing property in Australia, New Zealand, Brazil, and in Germany.

For more information on this news please visit the prescribed links, or contact:

Paul Dalla Lana
CEO, NorthWest International Healthcare Properties REIT
(416) 366-8300 ext. 1001

Simon Property Group, Inc, and Callaway Real Estate Investment Trust has announced that the construction of Canada’s first upscale outlet center will begin on April 25 with a ground breaking ceremony, with the first phase of the 500,000 ft.² center due to open by the summer of next year. The project which is called “Toronto Premium Outlets”, is a joint-venture between Callaway and Simon.

The premium outlets will be located in Halton Hills on Highway 401 at Trafalgar Road, adjacent to highways 401 and 407. It will have sufficient space for more than 100 high-quality outlet stores, and is expected to be the Canadian entry point for selected upscale US retailers and designer brands.

John R Klein, President of Simon’s Premium Outlets Division, commented on the project:

“Toronto Premium Outlets will feature an outstanding collection of many of the finest brands, offering value, quality and selection all in one convenient location. We already welcome large numbers of Canadian visitors to our centers in the US and look forward to serving these valued shoppers closer to their home. We see tremendous opportunity to introduce our top merchants to the Canadian market.”

Simon Property Group’s outlet portfolio comprises of 70 premium outlet centers, 57 of which are in the United States, while eight are in Japan, two are in Korea, one is in Mexico, and one is in Puerto Rico. Most of the centers in the United States are in or near major metropolitan markets such as Boston, Chicago, New York, and Los Angeles, as well as visitor markets such as Las Vegas, Palm Springs, and Orlando. Each Premium Outlet property is designed to be an architecturally distinct village, and offers a mix of leading designers and name brands selling direct to the consumers at significant savings.

SmartCentres worked on behalf of Simon and Callaway to secure the necessary approvals and permits for the project to proceed the spring. Simon is providing the leasing, management and marketing services.

Al Mawani, President and CEO of Callaway said “Callaway is proud to be Simon’s partner as they expand their portfolio into Canada. The Canadian retail landscape is evolving and Toronto Premium Outlets will be the first of its kind in the country.”

The project is expected to create more than 500 full and part-time jobs, as well as hundreds of local construction jobs over the next 16 months. Gary Carr, Halton Regional chair is quoted as saying “Businesses are choosing to locate in Halton due to both the quality of infrastructure and high quality of life.”

Simon Property Group, Inc. is an S&P 100 company, and the largest real estate company in the world.

Callaway is one of Canada’s largest real estate investment trusts with an enterprise value of approximately $6 billion.

SmartCentres is a privately held Canadian company which has developed more than 300 shopping centers in provinces throughout Canada.

Asia Pacific real estate declines on back of weak market sentiment © Rodrigo Roy Boncato - Fotolia.com

The decline of 39% from Q1 to Q2 follows the earthquake and tsunami in Japan, and the recent economic troubles in the Eurozone and the US. The Pacific region is recovering from a slow start to the year, and increased by a massive 228% quarter on quarter, while transactions in Asia dropped by 52% quarter on quarter.

Australia currently accounts for 24% of total investment in the Asia Pacific region, and proved particularly attractive to investors looking for core quality buildings in established markets. Investors included Asian buyers who were keen to capitalize on the Sydney office market, especially as demand for premium office space is expected to increase over the next few years.

Income producing properties are also proving particularly popular as the Sofitel Silom Hotel in Thailand was recently sold to an owned associate of The Pioneer Global Group. However market interest is also focused on strategically located sites, and REITs and other listed property companies continued to purchase properties both within their own borders and in other countries. They accounted for 27% of all commercial real estate transactions.

Real estate experts have commented that even though activity has fallen, there is still a significant volume of investment capital and a real shortage of better quality assets for sale. The market is also affected by the limitations imposed on lending in China and Hong Kong which has led to buyers expecting discounts to offset their increased borrowing costs.

Most analysts think the Asian real estate market is still well positioned to deal with the current global uncertainty, remaining an attractive medium-term investment. In general, the Pacific region expects an improvement in economic growth over the next year, depending on the global economy, and investors are expected to continue focusing attention on quality Australian commercial property.

Dollar General property in Grovetown, GA. Image courtesy of Old Shoe Woman

The seller was a private developer based in Georgia, and was represented by Randy Blankstein and Jimmy Goodman of The Boulder Group. The building was purchased by a private investor in New Jersey.

Randy Blankstein, president of The Boulder Group said “Newly constructed Dollar General properties remain in high demand as they offer investors attractive yields combined with no landlord responsibilities.”

Jimmy Goodman, partner of The Boulder Group added “Our private investors are attracted to Dollar General properties as there are few tenants of this financial policy that execute 15 year leases that are offered near the million dollar price point.”

The Boulder Group is a boutique investment real estate service firm which specializes in single tenant net leased properties. It is able to provide clients with a full range of advisory, brokerage, and financing services nationwide. Its client base is substantial and diversified and includes high net worth individuals, REITs, institutional investment funds, developers and partnerships. Since the firm was founded in 1997, it has arranged the acquisition and disposition of more than $1.2 billion of single tenant net lease real estate transactions. Its headquarters is in suburban Chicago, and more information about the firm can be found on its website.

Desert Ridge Medical Campus in Phoenix. Image courtesy of Ryan Companies

The Minneapolis-based publication gives details of 10 inpatient projects, 11 medical office building sales transactions, and a number of new outpatient developments. Some of the transactions are huge, including plans by the American Realty Capital Healthcare Trust Inc. to acquire a number of medical properties in multiple locations, giving them 765,038 ft.² of space. The trust, which is a non-traded real estate investment trust, is to spend $257.5 million.

Another non-traded REIT, the Healthcare Trust of America Inc., has entered a purchase agreement for the Desert Ridge Medical Campus in Phoenix for $32.75 million. Grubb & Ellis Healthcare REIT II is to purchase 41,000 ft.² of medical office buildings on the campus of Doctors Hospital in Sarasota, Florida.

There are a number of brand-new outpatient developments and medical office buildings which are currently under construction. In Bryn Mawr, Philadelphia, a $32 million 141,000 ft.² Medical Arts Pavilion is being built for a group of physicians. An $18 million development for the Denver-based NexCore Group is currently under construction. It will be a new 60,000 ft.² medical office building in the campus of St Agnes Hospital in Baltimore.

Planned $32 million Medical Arts Pavilion on Bryn Mawr, Philadelphia

The newsletter details several inpatient projects which include projects for Sisters of Mercy Health Care in Missouri, RegionalCare Hospital Partners in Alabama and Lowell (Mass.) General Hospital.

John B. Mugford, editor of Healthcare Real Estate Insight newsletter has this to say about healthcare real estate development. “A few dozen projects are not definitive proof of a sustained market recovery, but the recent flurry of activity certainly suggests that Healthcare real estate development and investment might be gaining strength.”

He goes on to point out that “the Healthcare real estate niche outperformed most other commercial real estate sectors during the recession, and the recent volume of activity seems to be accelerating.”

Healthcare Real Estate Insights was launched in 2003, and its monthly newsletter is respected as being a trustworthy and independent source of news and information within the industry.

New properties in Abu Dhabi could see rents drop by 10%. Image courtesy of Real Estate Channel

If this prediction is true then it would be extending a decline which could last several years.

The construction industry in Abu Dhabi suffered from the financial crisis at a much earlier stage than Dubai, although its subsequent decline has been much slower than the spectacular free fall suffered by Dubai, which is currently the worst performing market in the Middle East. Since the height of the boom rents in Abu Dhabi have dropped 40% from their peak according to Jones Lang LaSalle.

Apparently there will be 50,000 new homes which is 27% of the current supply in Abu Dhabi completed by 2014, with around 16,000 being completed this year. The worry is that developers may need to drop rents by more than 10% in order to attract tenants.

Last decade's construction boom has seen Abu Dhabi flooded with new properties. Image courtesy of Blogspot

It’s estimated that the market may take up to three years to absorb this supply of new homes, and that the oversupply will prevent rent and price increases. Offering tenants long-term leases and making sure properties are managed effectively will help mitigate some of the risk, and could help attract REITs and investment funds in the future.

At the moment the UAE isn’t an attractive prospect as yields and transparency need to improve. The property market in Abu Dhabi was only opened up to foreign buyers in 2005, some three years later than Dubai.

Visit the original news source, Zainab Fattah at Bloomberg.

This proposal was a part of a bigger proposal for a new Real Estate investing strategy posted on the California Public Employees Retirement System website this past Monday.  It calls for the pension fund to limit its Real Estate investing to private investment vehicles, not publicly traded stocks.  The reason for the change, is that private vehicles are less correlated with the stock market than REITs, according to a consultant memo made public by Calpers too.

When the funds dry up?

Investing in REITs is something Calpers will continue to do as part of its stock-investing strategy, said a spokesman.  He further elaborated that it was too soon to say how the pension fund’s overall exposure will change. 7 percent of Calpers’s Real Estate portfolio are the stocks.  Reported by the Wall Street Journal, the National Association of Real Estate Investment Trusts responded:

“The Real Estate staff’s recommendation to the Calpers board is inappropriate and ill-advised.”

REITs has been lobbying pension funds and other big investors to increase their REIT exposure, arguing the point that it is more liquid and transparent than private Real Estate investments.  In a statement the group said, the net annual return produced by REITs had outperformed that of Calpers Real Estate portfolio over the last 20 years.

Calpers will consider the proposed Real Estate plan at a board meeting on Valentines Day.

The Real Estate private-equity industry as a whole has been hammered over the last five years.  Calpers is responding to the tune of more than $10 billion in Real Estate losses it has absorbed over the recent years.  REITs, bottomed out after the financial crisis of 2008, but have bounced back nicely since March of 2009 (along with the rest of the stock market).  They still remain roughly 30% below their 2007 peak, however.

REITs have been able to refinance assets and make acquisitions more easily than private landlords thanks to their access to the public markets, an advantage they have been trying to capitalize by broadening its investor base.

Dark days ahead for property stocks?