Tag Archives: stock

What'' s Incorrect with REITs? Sector Hopes to Get Rid Of Weak Stock Efficiency in 2018

Access to Capital, Strong NOI Growth Belie Lingering Underperformance of REIT Shares

One sector has visibly missed out on the current record run in U.S. stock prices. REITs underperformed in 2017, recognizing total returns of just 5.1% for the year, according to Morgan Stanley, with REITs mostly missing out on the stock market rally in the 2nd half of the year and regularly lagging the more comprehensive market.

After watching REITs’ share costs underperform for 2 successive years, industry experts stay careful on their stock efficiency outlook once again for this year, pointing out late-cycle signals coinciding with rising interest rates and economic unpredictability.

The recent and lingering detach in between REIT stock performance in the last few years and their continuing solid property-level performance, property worths or credit quality, outside of the retail sector, has given concern for REIT execs.

The lukewarm market reaction has actually taken place even as REITs enjoy solid access to both financial obligation and equity markets and provided operating outcomes that satisfied or a little surpassed expectations and continue to support credit quality, inning accordance with S&P Global Ratings, which updated more U.S. REITs than it downgraded in 2015.

REITs were likewise active in the capital markets last year with overall issuance (financial obligation, chosen, and equity capital) up about 25%. Refinancing and acquisitions were the main reasons for the boost in issuance, inning accordance with S&P information.

While REIT execs and experts acknowledge the challenge of completing in the market for financiers when the wider stock exchange is providing huge returns, they still mention that REITs overall had an excellent year and provide an excellent opportunity for particular financiers.

“The big story of 2017 for REIT investors was how considerably they underperformed the broad stock market. That’s a terribly misleading summary of the previous year, however it works for framing expectations for 2018,” kept in mind Brad Case, senior vice president, research study & & market details, NAREIT.

Through mid-December the REIT market had produced overall returns of 10.18%, inning accordance with the FTSE NAREIT All U.S. REITs Index. Meanwhile, the S&P 500 and Nasdaq had their finest years considering that 2013. The broader S&P 500 jumped 19%. And the Nasdaq jumped an excellent 28%.

The REIT index efficiency, nevertheless, was somewhat better than its long-term average: from the beginning of 1972, when the All U.S. REITs Index was produced, Case noted.

On a long-term basis, REITs have actually likewise managed their homes to accomplish constant development in net operating income (NOI) in the variety of 2.5% to 4% annually on a same-property basis, according to NAREIT.

Meanwhile, current operating performance for the REIT industry is in its “sweet area,” inning accordance with NAREIT’s Case. “Over the last 4 quarters, same-property NOI development averaged 3.2%, consistent with the market’s long-lasting standard,” he included.

When other business increase revenue and lower costs to accomplish higher NOI, stock investors usually cheer. But in his outlook, Case stated REITs perform best in markets that are neither too soft nor too strong.

Case keeps in mind that same-property NOI development higher than about 4% can be “too much of an excellent thing,” stimulating so much brand-new building that it results in oversupply and reducing occupancy rates and rents, ultimately suppressing same-property NOI growth to a range of 2.5% or less.

“Running fundamentals are driven by demand and supply conditions in the realty market, and both of those appear to be well balanced,” he noted.

Rates Of Interest, Retail Performance Bear Enjoying

Of course, rate of interest figure prominently in any discussion of REIT share efficiency. Indeed, REIT share rates have actually typically responded adversely to increasing rate of interest over the past few years, as financiers appear concerned that higher rates might impact REIT basics, either through greater interest expenses or lower residential or commercial property valuations.

Not so quick, states NAREIT. The market group explains that interest expenditures of REITs, relative to NOI, are the lowest on record as REITs have actually largely used the recent run-up in property values to be net-sellers and have actually utilized sale proceeds to strengthen their balance sheets with greater shareholders’ equity and lower leverage.

One notable exception has been retail REITs, whose operating efficiency remains under pressure due to the well-publicized problems dealing with merchants in particular residential or commercial property types, inning accordance with S&P Global.

“We anticipate NOI development for the mall-based REITs to be somewhat negative in the next year but think that most must endure this pressure without significant pressure to cash circulations,” kept in mind Ana Lai, analyst with S&P Global Scores. “We believe retail REITs should stay fairly resistant offered decreased utilize and a well-diversified occupant base. Furthermore, many have repositioned their asset portfolios to improve quality.”

Other aspects that might likewise be on financiers’ minds is a high degree of uncertainty relating to the impact of brand-new tax reforms signed into law last month and their influence on REITs.

S&P stated the reforms could have a meaningful influence on the REIT sector given the considerable use of financial obligation in the market. The loss of interest expenditure deductibility could lead REITs to modifications in their capital allotment techniques towards greater issuance of favored or typical equity rather of debt.

In addition, the lower business tax rate might make the REIT structure less appealing than C-corps, which might negatively affect equity prices.

Experts with Morgan Stanley & & Co. recommend financiers follow a protective playbook in the year ahead as they stay cautious on REITs as threats alter to the drawback. Nevertheless, they are favorable on some sectors with strong residential or commercial property basics, balance sheets and liquidity, consisting of commercial, multifamily and single-family rentals.

Out of the major subsectors, industrials and accommodations led [last year] with total returns at 20.8% and 8.7%, respectively, Morgan Stanley analysts noted. Malls and strips were the only major subsectors at a loss with overall returns of -1.7% and -9.5%, respectively.

How major US stock indexes fared on Friday

Friday, Oct. 27, 2017|2:12 p.m.

. A few of the greatest companies in the world had their best day in years Friday as Microsoft and Alphabet soared following strong third-quarter reports, as did online retail huge Amazon. U.S. stocks set more records as their winning streak extended to a seventh week.

On Friday:

The Requirement & & Poor’s 500 index jumped 20.67 points, or 0.8 percent, to 2,581.07.

The Dow Jones commercial average added 33.33 points, or 0.1 percent, to 23,434.19.

The Nasdaq composite climbed 144.49 points, or 2.2 percent, to 6,701.26.

The Russell 2000 index of smaller-company stocks rose 10.86 points, or 0.7 percent, to 1,508.32.

For the week:

The S&P 500 rose 5.86 points, or 0.2 percent.

The Dow gained 105.56 points, or 0.5 percent.

The Nasdaq advanced 72.21 points, or 1.1 percent.

The Russell 2000 fell 0.93 points, or 0.1 percent.

For the year:

The S&P 500 is up 342.24 points, or 15.3 percent.

The Dow is up 3,671.59 points, or 18.6 percent.

The Nasdaq is up 1,318.15 points, or 24.5 percent.

The Russell 2000 is up 151.19 points, or 11.1 percent.

Gun-control group sues '' bump stock ' maker

Image

Allen G. Breed/ AP Shooting trainer Frankie McRae aims an AR-15 rifle fitted with a “bump stock” at his 37 PSR Weapon Club in Bunnlevel, N.C., on Wednesday, Oct. 4, 2017.

CoStar Group Announces Pricing of Common Stock Offering

CoStar Group, Inc. (NASDAQ: CSGP)( “CoStar “)revealed today that it has priced an offering of 2,884,616 shares of its typical stock at a price of $260.00 per share.

The company likewise stated it has actually granted the underwriters in the providing a 30-day alternative to purchase up to an extra 432,692 shares of its typical stock at the exact same rate.

J.P. Morgan, Goldman Sachs & & Co., Citigroup, BofA Merrill Lynch, SunTrust Robinson Humphrey and Wells Fargo Securities are functioning as joint-bookrunning supervisors, with Needham & & Business, Stephens Inc., William Blair, JMP Securities, B. Riley & & Co. and Regions Securities LLC acting as co-managers for the offering. The company stated it anticipates the offering to close on October 3, 2017, based on popular closing conditions.

CoStar anticipates to use the net profits of the offering to money all or a portion of the costs of any strategic acquisitions it may pursue in the future, in addition to finance the growth of its company and for working capital and other general business functions.

The shares are being offered pursuant to a reliable rack registration statement that has actually been filed with the United States Securities and Exchange Commission.

Extra Disclosures:

An initial prospectus supplement associated to the offering has actually been filed with the SEC and is available on the SEC’s site at http://www.sec.gov.. Copies of the prospectus supplement and accompanying prospectus connecting to the offering, when readily available, may be obtained from: J.P. Morgan Securities LLC, Attention: Broadridge Financial Solutions, 1155 Long Island Opportunity, Edgewood, NY 11717 or by telephone at -LRB-866-RRB- 803-9204 or Goldman Sachs & & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone at -LRB-866-RRB- 471-2526, facsimile at -LRB-212-RRB- 902-9316 or by emailing prospectus-ny@ny.email.gs.com!.?.!. This press release shall not constitute an offer to offer or the solicitation of an offer to purchase, nor shall there be any sale of these securities in any state or jurisdiction where such offer, solicitation or sale would be illegal previous to registration or credentials under the securities laws of any such state or jurisdiction. The offering of these securities will be made just by means of the prospectus supplement and the accompanying prospectus.

United States stock indexes inch back from record highs

Published Monday, May 8, 2017|8:05 a.m.

Updated 7 hours, 35 minutes ago

New York City– U.S. stock indexes inched back from their record highs Monday, while the dollar ticked greater versus other currencies.

Trading was calm following the weekend’s presidential election in France, which had the prospective to upset international markets. The candidate who favors keeping France in the European Union and in the euro currency won, to the relief of investors who feared the alternative would have harmed worldwide trade. Markets had been rallying for weeks in anticipation of a triumph by Emmanuel Macron, and experts stated that left little upside for when the result really took place.

KEEPING SCORE: The Standard & & Poor’s 500 index slipped a portion to 2,398 since 2:06 p.m. Eastern time. The Dow Jones industrial average fell 2 points 21,004. The Nasdaq composite was bit changed at 6,101.

MARKETS ABROAD: The French CAC 40 fell 0.9 percent, however that follows a 7.4 percent surge in the preceding 2 weeks, when financiers sent French stocks higher in anticipation of a Macron success. In Germany, the DAX slipped 0.2 percent. The FTSE 100 index in London was essentially flat.

Asian markets fared better. Japan’s Nikkei 225 index leapt 2.3 percent, as did South Korea’s Kospi index. The Hang Seng in Hong Kong increased 0.4 percent.

TAKING STOCK: Markets worldwide have actually been tearing greater in current weeks, and the S&P 500 index closed at another all-time high Friday following excitement about the approaching French election and strong incomes in the U.S.

“Business profits have been extraordinary, the very best quarter in 5 years,” stated Phil Orlando, primary equity strategist at Federated Investors. “The incomes economic downturn that was about 7 or 8 quarter long is definitively behind us. It’s over.”

More than 80 percent of companies in the S&P 500 have reported their outcomes for the very first three months of the year, and many have actually topped analysts’ expectations. With the U.S. job market continuing to enhance, in addition to economies around the globe, Orlando says he expects earnings to keep increasing through the year.

That has him, unlike market critics, not worried that stocks have grown too expensive relative to their revenues, and he anticipates Monday’s action back to be momentary.

“We have actually had a quite strong bounce the last month or so,” he said. “We ought to wander sideways and combine up until we get another clue” on the marketplace’s next move.

BRANDED: Newell Brands had the largest gain in the S&P 500 after reporting more powerful profits and revenue for its latest quarter than experts expected. The company, whose brands include Paper Mate, Elmer’s and Calphalon, also raised its earnings forecast for the year.

Shares leapt $5.37, or 11.6 percent, to $51.76.

SLUMPING: Tyson Foods dropped $3.84, or 6.1 percent, to $59.49 after reporting weaker income and profits for its latest quarter than analysts expected. The business stated fires at two of its chicken plants injured outcomes.

IN THE BAG: Kate Spade rose $1.38, or 8.1 percent, to $18.35 after accepting a $2.4 billion buyout by Coach, its competitor in the luxury items market. Coach will pay $18.50 per share for Kate Spade.

Frequently when companies announce takeovers, the buyer will see its share price drop on concerns that it’sed a good idea excessive or pursued an ill-fitting offer. But Coach increased $2.07, or 4.9 percent, to $44.73.

NEWS FLASH: Tribune Media jumped $2.14, or 5.3 percent, to $42.43 after Sinclair Broadcast Group said it would purchase its rival in a cash-and-stock offer valued at $43.50 per share, or a total of $3.9 billion. Sinclair fell 95 cents, or 2.6 percent, to $36.00

DOLLAR GAIN: The euro had been climbing versus the dollar in recent weeks as expectations constructed for a Macron victory. Following the real outcome, it fell like the French stock index. The euro slipped to $1.0928 from $1.0990 late Friday. The dollar edged up to 112.84 Japanese yen from 112.61 yen. The British pound slipped to $1.2941 from $1.2969.

PRODUCTS: Standard U.S. crude fell 26 cents to $45.96 per barrel. Brent crude, the international standard, fell 43 cents to $48.67 per barrel.

Natural gas fell 12 cents, or 3.6 percent, to $3.15 per 1,000 cubic feet, heating oil was close to flat at $1.44 per gallon, and wholesale gas held constant at $1.51 per gallon.

Gold increased 20 cents to settle at $1,227.10 per ounce, silver fell 2 cents to $16.26 per ounce and copper fell 4 cents to $2.49 per pound.

YIELDS: Bond yields edged greater. The yield on the 10-year Treasury increased to 2.38 percent from 2.35 percent late Friday. The two-year yield increased to 1.33 percent from 1.31 percent, and the 30-year Treasury yield ticked as much as 3.02 percent from 2.99 percent.

bebe Employs Firms to Liquidate Stock, Close Stores

Fantastic American, Tiger Capital Overseeing 168 Stores Closings and Liquidation Sales

Women’s fashion retailer bebe shops inc. (Nasdaq: BEBE) has employed Fantastic American Group LLC, an affiliate of B. Riley & & Co., the company’s monetary consultant, and Tiger Capital Group LLC to offer the merchandise and inventory at all of its 134 stores and 34 outlet shops in the U.S., Puerto Rico and Canada.

The closings will require more than 700,000 square feet of area that will go dark by the end of May 2017.

No word yet on what will occur to the rest of bebe’s property. It leases its 35,000-square-foot headquarters in Brisbane, CA, under a lease that expires in April 2020. It also owns a 240,000-square-foot distribution center in Benicia, CA, of which it utilizes 144,000 square feet. It also own a 50,000-square-foot design studio and production center in Los Angeles,

The merchant expects to record a loss in connection with the sale and closings of its stores however said it can not approximate how much of a loss at this time. However, it anticipates to acknowledge a disability charge of $20 million over the next 2 quarters as an outcome of closings.

Upgraded: Home Cost Premiums, Discounted Stock Values Drive More CRE Sales, Share Repurchases

Columbia Home Trust, Equity Commonwealth and First Potomac Newest To Sell Possessions and Purchase Their Own Business

Columbia Property Trust is selling a 49% interest in the two-building Market Square office complex in Washington, D.C. to an affiliate of the Blackstone Group at a gross value of $595 million.
Columbia Home Trust is selling a 49 % interest in the two-building Market Square workplace complex in Washington, D.C. to an affiliate of the Blackstone Group at a gross value of $595 million.

Columbia Home Trust Inc., Equity Commonwealth and First Potomac Real estate Trust are the current pair of workplace REITs to offer property or put a profile on the marketplace with strategies to utilize a few of the sale proceeds buy back shares that continue to trade at a discount rate to the value of their property holdings.

Share buybacks amongst REITs were a hot topic of discussion throughout the second-quarter incomes season, with numerous business completing repurchases under existing permissions or announcing new programs. Frustrated With Low Evaluations, Workplace REITs Increase Stock Buy-Backs from Accelerating Possession Sales CEO Twenty 8 REITs (35 %) went over share repurchases throughout their second quarter revenues conference calls from the 80 call transcripts, according to Fitch Ratings, which expects REIT share repurchases to remain to enhance through the balance of 2015 and likely into 2016.

The scores company views share repurchases funded from possession sales proceeds as being far more creditor-friendly than debt-funded repurchases. Fitch considers asset sales as successfully equity raises but at personal market appraisals that go beyond public market price. Some business prepare to offer unconsolidated joint endeavor interests, which Fitch said can have the included advantage of reducing intricacy.

Most recently, Atlanta-based Columbia Building Trust revealed that it will certainly be marketing for sale 3 possessions totaling 2.9 million square feet. The buildings being offerd for sale lie in Cleveland, Baltimore and Newark, N.J. The REIT is likewise under agreement to offer a 49 % interest in the two-building Market Square office complex in Washington, D.C. to an affiliate of the Blackstone Group at a gross value of $595 million.

The REIT expects combined gross profits from the deals are anticipated to be roughly $900 million to $1 billion when the sales close, projected for late 2015 or early 2016. Columbia Building Trust will be consuming to $200 million of that to redeem shares of typical stock.

In late 2011, Columbia possessed buildings in 33 markets, with only a single asset in 20 of those markets. It produced 45 % of annualized lease revenue (ALR) from single-tenant structures and over 60 % of ALR from suburban structures.

Today, CXP’s portfolio is focused in 15 markets, with roughly 80 % of ALR from multi-tenant homes and roughly 70 % of ALR from CBD locations.

This month, Columbia stated it will start marketing the 1.3 million-square-foot Secret Center Tower and the 400-room Key Center Marriott in Cleveland, along with the 653,000-square-foot 100 East Pratt in Baltimore and the 961,000-square-foot 80 Park Plaza in Newark.

Columbia stated it is also under contract to offer a 49 % interest in Market Square to Blackstone Building Partners, Blackstone’s Core+ realty financial investment device. The joint venture agreement values the building at $595 million and supplies that Columbia will certainly remain to manage the 686,000-square-foot workplace home situated on a prime Pennsylvania Ave. place in Washington, DC. The transaction is anticipated to close by early 4th quarter of 2015.

Equity Commonwealth Finishes $261 Million in Sales

Also signing up with the trend, Equity Commonwealth completed the sale of 13 buildings totaling 3.4 million square feet for a combined sales price of $260.9 million, in 3 different transactions.

The business also revealed that its board authorized the repurchase of up to an extra $100 countless its impressive common shares under its share repurchase program.

The business offered an 11-property portfolio of small-sized office properties completing 2 million square feet in upstate New York for a gross prices of $104.6 million. It likewise sold the 868,000-square-foot 185 Asylum Street in Hartford, CT, for $113.3 million and finished the sale of a property at 16th and Race in Philadelphia for $43 million. That 609,000-square-foot uninhabited home was designated as held for sale at the end of the second quarter 2015.

Year-to-date, the company has sold $1.7 billion of possessions, consisting of 82 homes and 16.4 million square feet. The business is currently in numerous phases of marketing nine office buildings completing 2.6 million square feet.First Potomac Plans To Sell At Least $200 Countless Assets

First Potomac Realty Trust today upgraded its strategies regarding its ongoing effort to enhance performance and develop extra shareholder value.

“We are taking a variety of specific steps to de-risk our profile, enhance our balance sheet, and reduce our corporate overhead,” stated Douglas J. Donatelli, CEO of First Potomac. “We remain dedicated to enhancing shareholder value through the money making of assets and the redeployment of earnings to repurchase shares, reinforce the balance sheet, and place the company for long-term success.”

First Potomac has actually worked with Holiday Fenoglio Fowler LP to market the following assets in Northern Virginia:

Building Name– Home Type– Square Feet– Location

Newington Sector Park Center– Industrial– 255,600– Lorton, VA
Enterprise Center– Office– 188,933– Chantilly, VA
Gateway Centre Manassas– Company Park– 102,446– Manassas, VA
Herndon Corporate Center– Workplace– 128,359– Herndon, VA
Linden Company Center– Sector Park– 109,809– Manassas, VA
Prosperity Profession Center– Business Park– 71,373– Merrifield, VA
Reston Sector School– Office– 82,378– Reston, VA
Van Buren Workplace Park– Workplace– 106,683– Herndon, VA
Windsor at Field of battle– Office– 155,511– Manassas, VA

In addition, the REIT has Worked with Sage Capital Advisors to market First Potomac’s bulk ownership interest in Storey Park, an advancement website in the NoMa sub-market in Washington, DC, with the ability of accommodating approximately 712,000 square feet of mixed-use development. The REIT set no timeline for offering the site, which is within walking range of Union Station.

The REIT has identified added assets that it prepares to sell and remains in the procedure of selecting sales brokers for the listings. These assets, integrated with the Northern Virginia assets and Storey Park, are prepared for to generate earnings of a minimum of $200 million.

[Editor’s Note: This story was updated Thursday morning at 6 AM to include extra details on First Potomac Real estate Trust’s sales strategies.]

Home Rate Premiums, Marked down Stock Values Drive More CRE Sales, Share Repurchases

Columbia Building Trust, Equity Commonwealth Newest To Sell Office Assets and Purchase Their Own Business

Columbia Building Trust Inc. and Equity Commonwealth are the most recent pair of workplace REITs to offer property or put a portfolio on the market with strategies to make use of a few of the sale continues buy back shares that continue to trade at a discount to the value of their real estate holdings.

Share buybacks amongst REITs were a hot topic of discussion throughout the second-quarter earnings season, with lots of companies completing repurchases under existing permissions or announcing new programs. Frustrated With Low Appraisals, Workplace REITs Boost Stock Buy-Backs from Accelerating Possession Sales CEO Twenty eight REITs (35 %) talked about share repurchases throughout their second quarter incomes teleconference out of the 80 call transcripts, according to Fitch Scores, which expects REIT share repurchases to remain to enhance through the balance of 2015 and likely into 2016.

The ratings firm views share repurchases moneyed from possession sales proceeds as being far more creditor-friendly than debt-funded repurchases. Fitch thinks about asset sales as effectively equity raises however at private market evaluations that go beyond public market price. Some companies plan to offer unconsolidated joint endeavor interests, which Fitch stated can have the included benefit of minimizing complexity.Columbia Property Trust Continues High-Barrier Market Strategy with New Disposition Targets and Share Repurchase Most recently, Atlanta-based Columbia

Building Trust revealed that it will certainly be marketing for sale three possessions completing 2.9 million square feet. The homes being offerd for sale are located in Cleveland, Baltimore and Newark, N.J. The REIT is also under contract to offer a 49 % interest in the two-building Market Square workplace complex in Washington, D.C. to an affiliate of the Blackstone Group at a gross value of $595 million. The REIT anticipates combined gross earnings from the deals are expected to be roughly $900 million to $1 billion when the sales close, forecasted for late 2015 or early 2016. Columbia Property Trust will certainly be using up to$ 200 countless that to redeem shares of common stock. In late 2011, Columbia had properties in 33 markets, with just a single asset in 20 of those markets.

It generated 45 % of annualized lease earnings (ALR) from single-tenant structures and over 60 % of ALR from rural structures. Today, CXP’s portfolio is focused in 15 markets, with roughly 80 % of ALR from multi-tenant properties and around 70 % of ALR from CBD places. This month, Columbia stated it will begin marketing the 1.3 million-square-foot Key Center Tower and the 400-room Secret Center Marriott

in Cleveland, along with the 653,000-square-foot 100 East Pratt in Baltimore and the 961,000-square-foot 80 Park Plaza in Newark. Columbia said it is also under contract to offer a 49 % interest in Market Square to Blackstone Property Partners, Blackstone’s Core +property investment system. The

joint venture agreement values the property at $595 million and offers that Columbia will certainly continue to handle the 686,000-square-foot workplace property located on a prime Pennsylvania Ave. location in Washington, DC. The deal is expected to nearby early 4th quarter of 2015. Equity Commonwealth Completes $261 Million in Sales Also joining the trend, Equity Commonwealth completed the sale of 13 homes totaling 3.4 million square feet for a combined sales price of $260.9 million, in three separate

deals. The business also announced that its board authorized the repurchase of up to an added$100 million of its outstanding common shares under its share bought program. The business sold an 11-property profile of small-sized workplace buildings completing 2 million square feet in upstate New york city for a gross list prices of $104.6 million. It also offered the 868,000-square-foot 185 Asylum Street in Hartford, CT, for$ 113.3 million and completed

the sale of a building at 16th and Race in Philadelphia for $43 million. That 609,000-square-foot vacant building was designated as held for sale at the end of the second quarter 2015. Year-to-date, the company has actually sold$1.7 billion of assets, comprising 82 homes and 16.4 million square feet. The business is presently in various stages of marketing 9 office properties completing 2.6 million square feet.