Our blog is designed to provide color and context on the thought processes that define our portfolio management. As you probably know, the financial world is awash with information and opinions. In our blog, we strive to separate what’s important from what’s not and ignore the latter. We frame the issues and drivers behind them in a topical and brief piece of commentary.
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Many people don’t have an investment allocation to real estate investment trusts (“REITs”) because they believe they already have “enough” exposure to “real estate” through ownership of their home. REITs and your home are very different asset classes with very different characteristics. REITs invest primarily in commercial real estate, which is any non-residential property used […]
Flush with record levels of cash, many private capital real estate managers are buying up publicly traded real estate investment trusts (“REITs”) to take advantage of the gap between public REITs and private real estate valuations. Historically, commercial real estate in the private market has usually transacted at, or near, fair value (or else the […]
As real estate securities analysts, most of the things we do have some basis in being knowable. For example, we analyze business plans, visit assets, build models, talk to tenants and reach conclusions about a company’s portfolio, prospects, management and stock valuation. While none of this is completely knowable, it’s partly knowable. In the last […]
A tale of two stocks and a tale of two investors that, we believe, demonstrate the sometimes illogical nature of perceptions and how those perceptions can drive valuation. The stocks are BioMed Realty Trust (BMR) and Alexandria Real Estate Equities (ARE). They are the only two public companies currently focused on ownership of lab/life science space […]
Net asset value (“NAV”) is one of the core valuation metrics for real estate investment trusts (“REITs”). The metric aims to determine the inherent value of a REIT by assigning approximate liquidation values to the underlying real estate. To do so, investors must derive a series of go forward expectations such as net operating income […]