REIT Rebound
REITs — especially retail REITs — posted an impressive rebound in August after six months of weak results. Shopping center and freestanding retail REITs had their best month in 2007. Regional mall REITs had their second best month of the year. Total returns for retail REITs were down 4.81 percent year-to-date as of the end of August. As of press time, September was looking to be another good month — pushing REITs back into positive territory for the year.
TOTAL RETURN BY MONTH
| Jan. | Feb. | Mar. | Apr. | May | June | July | Aug. | YTD |
|---|
| All Retail | 10.49 | 0.35 | -0.97 | 1.05 | -4.14 | -11.79 | -7.38 | 9.56 | -4.81 |
| Shopping Centers | 8.22 | 0.25 | -1.92 | 0.22 | -2.75 | -12.90 | -6.40 | 11.36 | -5.85 |
| Regional Malls | 13.44 | 0.81 | -0.45 | 1.93 | -5.79 | -11.35 | -8.39 | 7.83 | -4.26 |
| Free Standing | 3.42 | -3.01 | 1.46 | -1.19 | 1.53 | -8.09 | -5.19 | 12.14 | -0.23 |
| All REITS | 8.42 | -2.24 | -2.39 | -0.02 | 0.05 | -9.07 | -7.80 | 6.57 | -7.53 |
| Source: NAREIT |
A Look through stock prices
Most retail REITs are still down for the year, but after some companies hit 52-week lows, stock prices have begun to creep upwards.
RETAIL REIT SCORECARD
| Symbol | Price* | 52-week High | Chg | 52-week Low | Chg | 31-Dec-06YTD | Chg |
|---|
| PREIT | PEI | $43.97 | $50.39 | -12.74% | $37.48 | 17.32% | $39.38 | 11.66% |
| Acadia Realty Trust | AKR | $26.69 | $28.75 | -7.17% | $21.92 | 21.76% | $25.02 | 6.67% |
| Kite Realty Group | KRG | $19.10 | $21.80 | -12.39% | $14.13 | 35.17% | $18.62 | 2.58% |
| General Growth Properties | GGP | $52.75 | $67.43 | -21.77% | $42.56 | 23.94% | $52.23 | 1.00% |
| Equity One Inc. | EQY | $26.46 | $29.51 | -10.34% | $20.25 | 30.67% | $26.66 | -0.75% |
| Taubman Centers | TCO | $50.15 | $63.87 | -21.48% | $36.69 | 36.69% | $50.86 | -1.40% |
| Glimcher Realty Trust | GRT | $25.73 | $29.69 | -13.34% | $23.08 | 11.48% | $26.71 | -3.67% |
| The Macerich Co. | MAC | $83.10 | $103.59 | -19.78% | $67.90 | 22.39% | $86.57 | -4.01% |
| Capital Lease Funding | LSE | $11.13 | $12.21 | -8.85% | $10.16 | 9.55% | $11.60 | -4.05% |
| Tanger Factory Outlet Centers | SKT | $37.42 | $43.56 | -14.10% | $30.30 | 23.50% | $39.08 | -4.25% |
| Ramco-Gershenson Properties Trust | RPT | $35.83 | $39.55 | -9.41% | $26.17 | 36.91% | $38.14 | -6.06% |
| Agree Realty Corp. | ADC | $32.23 | $36.46 | -11.60% | $31.14 | 3.50% | $34.37 | -6.23% |
| Simon Property Group | SPG | $94.95 | $123.96 | -23.40% | $79.07 | 20.08% | $101.29 | -6.26% |
| Realty Income Corp. | O | $25.33 | $30.36 | -16.57% | $21.25 | 19.20% | $27.70 | -8.56% |
| Inland Real Estate Corp. | IRC | $17.01 | $21.14 | -19.54% | $13.83 | 22.99% | $18.72 | -9.13% |
| Federal Realty Investment Trust | FRT | $76.84 | $98.92 | -22.32% | $66.05 | 16.34% | $85.00 | -9.60% |
| Weingarten Realty Investors | WRI | $41.39 | $52.30 | -20.86% | $37.06 | 11.68% | $46.11 | -10.24% |
| Urstadt Biddle Properties Inc. | UBA | $17.13 | $19.73 | -13.18% | $14.62 | 17.17% | $19.09 | -10.27% |
| Regency Centers Corp. | REG | $70.10 | $93.49 | -25.02% | $59.18 | 18.45% | $78.17 | -10.32% |
| Feldman Mall Properties | FMP | $11.14 | $13.00 | -14.31% | $10.10 | 10.30% | $12.45 | -10.52% |
| Vornado Realty Trust | VNO | $109.23 | $136.55 | -20.01% | $93.53 | 16.79% | $122.35 | -10.72% |
| Cedar Shopping Centers Inc. | CDR | $14.18 | $18.42 | -23.02% | $13.84 | 2.46% | $15.91 | -10.87% |
| Kimco Realty Corp. | KIM | $39.17 | $53.60 | -26.92% | $35.07 | 11.69% | $44.95 | -12.86% |
| CBL & Associates Properties | CBL | $36.80 | $50.36 | -26.93% | $36.06 | 2.05% | $43.35 | -15.11% |
| Developers Diversified Realty Corp. | DDR | $52.11 | $72.33 | -27.96% | $49.27 | 5.76% | $62.95 | -17.22% |
| Cousins Properties Inc. | CUZ | $29.16 | $40.75 | -28.44% | $28.62 | 1.89% | $35.27 | -17.32% |
| Saul Centers | BFS | $45.12 | $61.70 | -26.87% | $36.74 | 22.81% | $55.19 | -18.25% |
| Colonial Properties Trust | CLP | $36.05 | $51.69 | -30.26% | $35.36 | 1.95% | $46.88 | -23.10% |
| * As of 9/25/2007 |
| Source: Retail Traffic |
Operating costs
The Institute of Real Estate Management published its 2006 Income/Expense Analysis of shopping centers. Here are some of its findings. The study breaks the U.S. into 10 regions. Regions 1, 2 and 3 include the Mid-Atlantic and Northeast. Region 4 is the Southeast. Region 5 includes northern Midwest states Ohio, Illinois, Indiana, Michigan, Wisconsin and Minnesota. Region 6 includes Texas, Louisiana, Arkansas, Oklahoma and New Mexico. Regions 7, 8 and 10 include the rest of the Midwest, the Pacific Northwest and Alaska. And Region 9 includes California, Arizona and Nevada.
MEDIAN INCOME 2006 | Region | Gross Leasable Area | Average Actual Occupancy |
|---|
| 1, 2, 3 | $14.67 | $15.25 |
| 4 | 12.08 | 12.9 |
| 5 | 11.69 | 13.14 |
| 6 | 12.62 | 14.58 |
| 7, 8, 10 | 11.37 | 11.9 |
| 9 | 17.73 | 18.99 |
| TOTAL | 12.62 | 13.96 |
MEDIAN EXPENSES 2006 | Region | Gross Leasable Area | Average Actual Occupancy |
|---|
| 1, 2, 3 | $2.92 | $2.92 |
| 4 | 2.56 | 2.83 |
| 5 | 3.73 | 4.86 |
| 6 | 4.35 | 5.08 |
| 7, 8, 10 | 3.38 | 3.49 |
| 9 | 4.85 | 4.96 |
| TOTAL | 3.73 | 4.27 |
MANAGEMENT FEES 2006 | Region | Gross Leasable Area | Average Actual Occupancy |
|---|
| 1, 2, 3 | $0.50 | $0.50 |
| 4 | 0.43 | 0.45 |
| 5 | 0.52 | 0.62 |
| 6 | 0.53 | 0.58 |
| 7, 8, 10 | 0.43 | 0.47 |
| 9 | 0.84 | 0.86 |
| TOTAL | 0.5 | 0.53 |
COMPARISON OF EXPENSE CATEGORIES | Maintenance & Repairs | 9.60% |
| Services | 11.7 |
| Utilities | 8.2 |
| Insurance/Taxes | 43.8 |
Source: IREM, in a survey of 288 centers averaging 85,028 square feet apiece.
