In my
previous blog I portrayed presentations delivered to our Real Estate Investment
Analysis Class. This blog will continue
with American Campus Communities.
American Campus Communities
This group
began their presentation with a short description of the company’s mission statement
and described their purpose. American
Campus Communities focuses on developing on and off campus housing in the
United States and Canada. The group also
mentioned multiple housing complexes located in College Station that are
sponsored by American Campus Communities.
I found it
quite interesting that employee ownership in the firm is at less than 1%. This could potentially show employee distrust
in the reliability of the company’s stock or something of the sort. College students have a high turnover
percentage due to the fact that many move immediately upon graduation and
change roommates very frequently.
Therefore, lease terms tend to have shorter terms in college areas as
opposed to more suburban regions. Even
through the economic downturn, the market for college apartments
persevered. This is a benefit to
investing in a REIT such as American Campus Communities.
HCP Inc.
HCP Inc. is
a REIT investing mainly in Real Estate for the healthcare industry. The group portrayed HCP as extremely
successful and described the long-held expertise that their senior executives
hold. It is integral to possess
knowledge on market fluctuations and predictability of the market when dealing
with REITs. The HCP group showed that
HCP focuses on achieving this standard.
James
Flaherty III is the CEO and Chairman, Paul F. Gallagher is the Executive VP and
CIO, and they went on to mention many other integral staff members. HCP’s property portfolio is contained in
large part in California, Texas, and the western areas of the United
States.
They
provided helpful visual aids describing the increasing revenues being provided
to HCP due to the recent implementation of healthcare methods in the United
States.
A graph of
HCP’s stock price shows that it has continuously outperformed the S&P 500
Index since 2008. HCP has continuously
possessed positive dividend growth and an astounding dividend payout
ratio. Overall, HCP appears to be doing
well in the midst of the continuing economic slump.
Taubman
Moving on to
Taubman Company, they hit the ground running in 1950. The Initial Public Offering hit the scene in
1992 and Taubman strives to provide the highest quality pieces of real estate
for shopping centers.
Both the
CEO, Robert Taubman, and the COO, William Taubman own a total of 100% of the
UP-REIT which is around 2.6% of the whole company. This shows their combined loyalty to Taubman
and continued ability to beat out competitors in the real estate market.
Taubman’s
overall capitalization rate sits at 5.3%.
The success of Taubman hits close to home with The Shops at Willowbend
in Plano, TX. The Taubman group
discusses how these are some of the most pristine pieces of real estate in the
nation.
Taubman’s
dividend return has gradually inclined as shown on a graph dating back to 1997. The stock price performance shows a severe
drop in 2008 with a steep recovery continuing to incline to present day. The presentation portrayed Taubman as a very
successful REIT. It also showed how
receptive the market for shopping is to economic downturns.
Weingarten
I will
finish with the discussion of Weingarten.
Weingarten strives to invest in high quality assets throughout many
expanses of geography in areas with high growth. The company possesses a CEO, CFO, COO and
Chairman and they currently run with seven different departments.
A majority
of Weingarten properties are possessed by Texas with a much smaller amount in
Florida, followed by California, etc.
Net Operating Income is capitalized in the central region of the United
States with a total of 36%.
Weingarten
makes sure to remain diversified in terms of their tenant mix and the largest
tenant accounted for within their company is 2.3% of total revenues.
They have
identified their target market as being in the retail sector for the
upper-middle income individuals. In
terms of market stability, Texas has managed to surpass the recession and come
out stronger on the other side.
Weingarten has revived their amount of job openings.
Weingarten’s
success has also hit close to home with a focus in Houston for their
portfolio’s NOI. 34.5% of their
portfolio Net Operating Income is based in Houston which is significant.
Their
presentation also discussed the potential for Houston to be the most thriving
city in the entire state of Texas upon the end of the economic crisis. They are projected to have the largest amount
of job openings and opportunities.
