Monday, March 29, 2010

Don't Look Now...
Piedmont Office Realty Trust (PDM), formerly named Wells Real Estate Investment Trust, crossed $20 per share this morning.  It had its IPO in mid-February, began trading near $15 per share, and has been creeping up ever since.  As part of its listing process, PDM had a three-for-one reverse split, so to figure an investor's breakeven share price, you need to adjust for the split.  The breakeven share price reflecting the split is $25.14 per share.   The current price of $20 is therefore about 20% under its breakeven.  It is worth considering that PDM raised most of its equity capital and acquired the bulk of its portfolio in the late 1990s and early 2000s, and as noted in a post yesterday, Moody's states that commercial real estate prices are now at 2003 levels.

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