DERIVING VALUE
Standard & Poor's launched its long-awaited commercial real estate indexes — the S&P/GRA Commercial Real Estate Indices — in August and later that month provided the first results looking at month-over-month and year-over-year changes as of May 2007. The index is maintained along with data provided by GRA/Charles Schwab Investment Management.
INDEX MOVES | Index | May 07 | May/April Change | April/March Change | Year-over-Year Change |
|---|
| Apartments | 137.19 | 0.5% | -0.4% | -2.2% |
| Offices | 144.84 | -1.0 | 2.5 | 13.9 |
| Retail | 160.41 | 1.4 | 1.4 | 14.6 |
| Warehouse | 156.46 | 1.0 | 1.5 | 11.3 |
| Desert Mountain West | 154.52 | 0.8 | 0.6 | 14.0 |
| Mid Atlantic South | 151.13 | 2.4 | -0.3 | 4.9 |
| Midwest | 127.50 | -0.4 | 0.6 | 6.8 |
| Northeast | 142.73 | -0.7 | 2.1 | 5.4 |
| Pacific West | 152.45 | -0.6 | 0.5 | 7.7 |
| National | 145.09 | 0.2 | 1.0 | 6.6 |
| Source: Standard & Poor's |
REIT INSIDERS STOP SELLING
Lehman Brothers has been tracking REIT insider trading activity for several years. During the second quarter — the one where REIT stocks started to plummet — REIT insiders backed off selling and starting buying stocks. In the two quarters prior, insiders sold a whopping $732 million in stock while buying $5.6 million. In fact, REIT insiders (primarily executives at General Growth Properties) bought more stock in the second quarter than they did in all of 2006.
BUYING & SELLING TOTALS | OPTIONS INCLUDED | OPTIONS STRIPPED OUT |
|---|
| Buying | Selling | Selling-to-Buying Ratio | Buying | Selling | Selling-to-Buying Ratio |
|---|
| Q2 2007 | $36,562,925 | $47,503,573 | 1.3 | $36,562,925 | $37,169,455 | 1.0 |
| Q1 2007 | 5,355,325 | 405,148,824 | 75.7 | 5,355,325 | 122,742,562 | 22.9 |
| Q4 2006 | 242,769 | 327,149,362 | 1,347.6 | 242,769 | 52,016,815 | 214.3 |
| Q3 2006 | 6,722,985 | 162,690,438 | 22.8 | 6,722,985 | 68,541,490 | 10.1 |
| Q2 2006 | 4,947,220 | 147,756,336 | 29.9 | 4,947,220 | 35,347,109 | 7.1 |
| Q1 2006 | 3,603,025 | 298,665,525 | 82.9 | 3,603,025 | 123,685,926 | 34.3 |
| Q4 2005 | 2,302,136 | 131,773,128 | 57.2 | 2,302,136 | 35,445,297 | 15.4 |
| Source: Lehman Brothers, Reuters/Dow Jones Corporate Filings Alert |
STACKING UP
U.S. REIT RATINGS | REIT | Senior Debt | Subordinate | Preferred Stock | Outlook |
|---|
| Developers Diversified Realty | Baa2 | — | Baa3 | Stable |
| Equity One | Baa3 | — | (P)Ba1 | Stable |
| Federal Realty Investment Trust | Baa1 | Baa2 | Baa2 | Stable |
| Kimco Realty Corp. | Baa2 | — | Baa2 | Stable |
| Regency Centers Corp. | — | — | (P)Baa3 | Positive |
| Weingarten Realty Investors | Baa1 | Baa2 | Baa2 | Stable |
| Source: Moody's Investor Service |
