Thursday, August 22, 2013

Changing Perception

I suspect most people have now read this Bloomberg article on AR Capital that was published last week.  The complimentary tone didn't surprise me, but what caught me off-guard was that even Green Street Advisor's Jim Sullivan was almost positive on non-traded REITs - or, at least not dismissive and negative.  I think this passage and quote may explain his change:
Sullivan expects such transactions (non-traded REIT liquidity events) to continue because of the amount of nontraded REITs in the business that will need to list their shares on stock exchanges or merge with another company as the end of their investment life approaches. Nontraded REITs eventually have to return shareholders’ investments after a set amount of time.

“There’s going to be a lot more M&A activity,” he said.

Ah yes, the potential for business, a strong attitude balm.

Mid-Week Links

Here are a few articles I found interesting over the past few days:

Colony American Homes, one of the largest buyers of single-family homes for rental purposes, and which pulled its IPO last spring, has expanded into lending to other single-family landlords. 

Hotel operating performance is now above pre-recession levels.  This CalcualtedRisk article reports on the surging lodging sector.  Make sure to click on the graph that details yearly changes. 

A Bloomberg article reports on the surge in German real estate.  This article is just one of many I have read in recent weeks that point to a rebound in European real estate.

In Europe, like in the United States, low interest rates and an improving economy are giving investors confidence in unrated debt securities.  Here is a Bloombeg article on Nordic affinity for high yielding debt.

Thursday, August 01, 2013

Housing IPO

B. Wayne Hughes' American Homes 4 Rent's (AMH) initial public offering raised $705.9 million yesterday at $16.00 per share.  The stock is holding steady near this price this morning.  (For old '80's limited partnership trivia geeks, Hughes was the founder of Public Storage.)   AMH, which owns almost 18,000 single-family homes(!), had initially filed to raise $1.25 billion.  AMH and other large single family home owners, including Blackstone and its 30,000 homes (!!), have built an asset class of permenant rental single-family homes.  This opportunity was created by the housing collapse and widespread foreclosures of the late 2000s.  Institutional ownership in the hardest hit areas - like Las Vegas and Phoenix - has accelerated these markets' strong price rebound by eliminating inventory.