REIT Spin-Offs: Capitalizing on Record-High Valuations
Today’s sky-high real estate prices have created compelling opportunities for thriving operating companies to create shareholder value through REIT spin-offs and other creative real estate strategies. Darden Restaurants, Hudson's Bay Company, and Sears are three publicly traded companies that are using REIT spin-offs as a means to increase shareholder value. Jim Sullivan describes Green Street’s work on conversions and spin-offs in a new video.
Green Street Revamps Corporate Governance Scorecard
As was highlighted in the recent attempt by Simon Property Group (SPG) to acquire Macerich (MAC), most REITs incorporated in Maryland have the ability to classify the board of directors (and thus fend off an unwelcome suitor) whenever they want. This month’s Heard on the Beach introduces soon-to-be-implemented changes to Green Street’s corporate governance scoring system that will appropriately penalize those REITs that can avail themselves of this extraordinary antitakeover device.
View Last Year's Corp Gov Ranking
Management Value Added - A Better Gauge
Green Street published its annual review of management performance based on Management Value Added (MVA). MVA measures the extent to which a REIT’s NAV/sh growth exceeds the levered change in value of its property portfolio. By backing out property appreciation, a factor over which management has only limited control, MVA provides an assessment of how much value has been created via the channels management actually controls. This year’s edition introduces letter grades for the REITs.
Special Report – Capital Structure in the REIT Sector
Differences in capital structure have proven to be one of the largest determinants of total return differentials across REITs. Building on over twenty years of extensive research, Mike Kirby and Peter Rothemund recommend an optimal capital structure for REITs, and provide a roadmap for investors to capitalize on fundamental misunderstandings on this topic.
2015 U.S. Apartment Outlook – A Real Estate Analytics Product
Dave Bragg and his team provided a macro overview of the apartment sector, including national and market-level forecasts for 2015-19. Institutional-quality apartments are now 26% above ’07 peak levels and continue to look attractively valued. The annual U.S. Apartment Outlook serves as a deep dive into the supply and demand dynamics affecting the apartment sector, and provides key insights into how these drivers vary across the top-30 apartment markets. 2015 U.S. outlook reports have also been published for the Mall, Office, Strip Center and Industrial sectors.
Single-Family Rental Sector: Growing Up Before Our Eyes
SFR Estimated Median Gross Yields
In a special report and accompanying conference call on the Single-Family Rental (SFR) sector, Dave Bragg and David Segall conclude that a consolidation wave has only just begun and should accelerate. Their report provides highlights from Green Street’s proprietary database of 75,000+ institutionally-owned SFR assets with insights on gross yields, rent growth, and asset quality. It also gives an updated valuation of SFR REIT American Homes 4 Rent (AMH).
How to Value REITs: Download Green Street's Updated Guide
*Past performance as of 5/30/14 cannot be used to predict
future performance. Please see our track record disclosure.
Green Street just posted its updated REIT Valuation guide based on its NAV-based pricing model for the general public. The model has been pivotal behind the firm’s superb twenty-year recommendation track record. The guide provides the nuts and bolts of an NAV-based analysis, the factors that impact the premiums at which REITs should trade (franchise value, balance sheet risk, corporate governance, and overhead), and Green Street's relative valuation approach for identifying the most/least attractively valued REITs.
Green Street in the News: Starboard Real Estate Primer on Darden
Green Street's Advisory & Consulting group recently completed an in-depth valuation analysis of Darden Restaurants, Inc.'s (NYSE: DRI) real estate holdings for Starboard, a sophisticated hedge fund client. The analysis included a detailed review of each of Darden's locations. Using Green Street's proprietary data and industry contacts and knowledge, in combination with publicly-available information, our consulting team derived valuation estimates for the company's owned and leased real estate. Starboard used this information as part of a publicly-filed presentation to argue for a sale or spin-off of the Company's real estate to enhance shareholder value.
View Press Release
Mike Kirby Wins Graaskamp Award
Photo Courtesy of Michael Grecco
The James A. Graaskamp award aims to recognize people who, through significant research, contribute practical insights of immediate use to real estate decision makers.
Barron’s Interviews Mike Kirby
Barron's Interviews Green Street Advisors
Michael Grecco for Barron's
Barron's recently talked with Green Street's president, Craig Leupold, and its director of research, Mike Kirby, about REIT valuations, leading stocks, popular exchange-traded funds and the merits of REITs versus private real-estate investments.
Barrons - REITs with the Right Stuff