Target Managment Very Much Against REIT Idea
As a Target shareholder, I got a letter in the mail yesterday from Target's management that was very much against Bill Ackerman's proposed Target REIT. They didn't go into much detail about the idea other than saying that the REIT idea was risky and would threaten long-term shareholder value. Target’s management said the land under the stores provided value and leverage to improve the stores to protect their brand.
I would counter that a Target REIT would also want to increase the value of its sites as any business would want to protect and increase the value of its assets. A Target REIT could focus on the ownership of the land and increase long-term shareholder value by consistently rewarding shareholders with a high-yielding dividend check. Target retail could then focus on retailing and its credit card business.
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Apr.14.2009. 20:32
HPT Jumps on the Dividend Suspension Bandwagon
The annoucment today by Hospitality Properties Trust almost isn't newsworthy. Following the move of many in the hospitality industry such as Strategic Hotels and Ashford Hospitality Trust, HPT also decides to suspend their dividend.
Instead of only solely claiming a need to conserve capital, the firm also blames the move on Marriott for "paying less than the minimum return due HPT." Creative excuse.
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Comments (0) Apr.08.2009. 18:30
Past, Present and Future with Duke Realty
I'm a long-term investor in Duke Realty (DRE). Up until recently the stock has performed, and the dividend has steadily increased. However, now, Duke is trading in the single-digits and many investors are frowning on their mixed-use developments which I believe will exhibit higher returns than single-use properties.
I actually own my Duke stock through their DRIP. It's an awesome DRIP because the company covers all of the fees. In addition, if you automatically reinvest your dividends you have the opportunity to receive the reinvested stock with a discount.
Needless to say Duke’s leadership has had to address their current troubles by taking some bold moves. They've reduced their dividend and are now using their DRIP investors to purchase reinvestment stock from the open market instead of issuing new stock at a discount. These moves are prudent and allow the DRIP to act as economic clutch for the company to shift into a lower gear.
Shona Bedwell, Duke's Assistant Vice President of Investor Relations penned a great letter documenting these changes for the participants in the Duke Dividend Reinvestment Plan. Because the letter so eloquently illustrates the past, present and future of Duke Realty's approach, I'm publishing the complete letter below. Enjoy this honest communication that I find very refreshing from a public company.
February 26, 2009
Dear Fellow Investors:
We wanted to take this opportunity to inform you of changes recently made to our Direct Stock Purchase and Dividend Reinvestment Plan.
The Company has decided to switch from issuing new shares through the Plan to purchasing shares on the open market. Accordingly, as your Plan prospectus indicates, when shares are purchased on the open market you will not receive a discount and your investment price will be the average for shares purchased for each investment date. Duke will pay the commissions for such purchases, however, and the Plan will continue allow participants to acquire and hold Duke shares absolutely free of any service charges, fees or commissions.
Additionally, on January 29th, we announced a reduction in our dividend to $1.00 per share annually. Duke Realty has increased its annual dividend every year since we went public in 1993. We did not take lightly the ramifications to our shareholders and potential long-term consequences of a dividend reduction. However, in light of the current economic environment, we made the difficult decision to reduce the dividend.
At Duke, we very much value the support of our individual investors and we appreciate your understanding of these changes. Furthermore, you should know that these changes are not necessarily permanent. As market conditions change, we will periodically evaluate a return to providing participants a discount on shares purchased through the Plan, as well as examine the level of our dividend.
Thank you again for your continuing support.
Sincerely,
Shona L. Bedwell
Assistant Vice President – Investor Relations
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Comments (0) Mar.10.2009. 23:44
REITs Payout $1 Billion (so far)
REITs as an industry took less than three months into 2009 to reward investors with $1 billion dollars – repeat $1 billion dollars. The payout came in the form of the good old-fashioned dividend check. While dividends primarily went out of favor during the tech boom, REITs have been steadily paying out dividends on a quarterly basis for decades (some REITs pay monthly dividends).
Top 5 Dividend Paying REITs for 2009
Avalon Bay Communities Inc. (AVB) $208,008,00
Apartment Investment and Management (AIV) $178,089,599
UDR, Inc. (UDR) $175,672,185
HCP, Inc. (HCP) $114,862,001
Health Care REIT Inc. (HCN) $70,345,999
Source: REIT Media (www.reitmedia.com)
While several REITs focused on hospitality (BEE) and retail properties (GGP) have suspended their dividends. It’s not surprising that the top 5 dividend paying REITs are focused on apartment and health care properties. Both the apartment and health care segments are performing better than other real estate sectors.
No question that current dividend yields for REITs are abnormal, but long-term capital appreciation and stable dividends are crucial traits for the steady investor.
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Comments (0) Feb.23.2009. 23:11
Light Turns Red on Sunstone Hotel Investors
Sunstone suspended their dividend on Friday the 13th. The news isn't really scary considering several other hospitality REITs have made the same decision. Like the other Hotel REITs, Sunstone states, "we believe we have sufficient cash reserves, the decision not to pay a first-quarter common dividend was made after considering the highly uncertain economic environment."
For the short-term investors should expect more dividend modifications.
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Comments (0) Feb.15.2009. 22:01
Simon Property Group Get's Their Solar Strategy to Market
Back on January 2nd we posted a blog about Developers Diversified solar efforts. We though this was a great idea since REITs have tons of unused roof space. Based on a press release issued today by Simon Property Group, they beat Developers Diversified to the marketplace with this idea.
The Simon release indicates that they completed the largets solar installation by a mall devloper on December 23rd, and that installation was performed by Element Markets, a Houston-based clean energy provider. The mall manager stated that the installation in Mission Viejo, California was finished in 20 days with no disruption to their shoppers during the Christmas shopping peak times.
We echo our previous kudos to REIT companies for embracing this renewable energy solution for both the planet, the U.S. economy, and for hopefully creating a trend to capture incremental revenue from previously un-utilitzed rooftops.
Read the complete release from Simon Property Group.
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Comments (0) Feb.05.2009. 23:21
At Least It's Something from LaSalle Hotel Properties 
The luxury hotel owner, LaSalle Hotel Properties, isn't paying such a luxirous dividend anymore. The company announced today an almost 96% reduction in its quarterly dividend. The company is now paying just 1 cent per quarter. However, in a economic depression where many REITs are suspending dividends entirely, at least LaSalle is paying something to their shareholders.
To LaSalle I say, "good job." You resisted the temptation to follow the hospitatlity crowd by cutting your dividend entirely. Now clean-up your balance sheet and get to work on that special year-end dividend I'm expecting from the rest of your sector.
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Comments (0) Feb.04.2009. 17:14