Friday, September 28, 2012

Friday Reading - Archstone IPO

An article from Bloomberg on Archstone Inc.'s potential $3 bilion IPO, the largest IPO since Facebook earlier this year.  The article discusses Archstone and Lehman Brothers, and has performance information on various REIT sectors:
The companies (apartment REITs) have been the worst performers this year among all other publicly traded REITs that own commercial property, according to data compiled by Bloomberg. Retail landlords have returned 25 percent, compared with 12 percent for owners of office buildings.

Apartment stocks surged after REIT landlords increased rents by 19 percent between the market bottom at the end of 2009 through the second quarter of 2012, according to Dallas-based Axiometrics Inc. While rents are projected to keep climbing through 2017, the rate of annual growth peaked in the second quarter of 2011 at 5.1 percent. Rents are on pace to rise about 4 percent nationally this year, Axiometrics said.

1 comment:

Anonymous said...

That's like saying that because Exxon only rose from $85 at the beginning of the year to $91 today that it's "the worst performer" because Apple rose like 50% or whatever. The apartment business is stable at the moment, so I would expect their high stock prices to reflect that - I wouldn't expect them to be bouncing around.

For instance, if you had bought Vornado in 2010 at $91, you wouldn't be very happy today at $78 with this "high performing" office and retail reit, now would you? Or Mack Cali at $35 last year, now at $28?