Four Dollars and Twenty-Five Freaking Cents
$4.25. That is the price per share that the Behringer Harvard REIT is now values itself. The original share price was $10. I heard rumblings a few weeks ago that a large devaluation was pending. I have never analyzed this REIT, so I am not sure the valuation is that shocking, but on its face, a 57.5% loss of value is troubling. Here is a link to the SEC's website where BH posted its document that puts forth the valuation - buried at the bottom of page 26 of a 32 page document. The REIT also cut its distribution to 1%. The Moody / REAL All Type Property Aggregate Index for commercial real estate shows a 41.8% drop in commercial real estate prices from their peak in August 2007 through February 2010.
Part of the BH document is dedicated to laying out a case that part of its troubles stem from problems in commercial real estate and the greater economy. There is obviously some truth to this. But not all real estate firms have lost 57.5% of their value. Publicly traded Federal Realty Trust (FRT) has gained nearly 19% since the start of 2006. It pays a quarterly dividend that it has managed to increase from $.56 a share to $.66 a share over the same period. I know that comparing Behringer Harvard REIT I to FRT is not an apples-to-apples comparison, but I show it to illustrate that while all real estate firms have faced the same economy, using a bad economy and tough real estate market cannot be used to explain away all problems.