REITs continued

 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.