KeyBanc on REITs: How To Outperform - Rotate Into Shopping Centers and Buy Low-Multiple Names
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Price: $11.99 --0%
Rating Summary:
5 Buy, 17 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
5 Buy, 17 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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KeyBanc downgraded a dozen REITs this morning, but still favors a few names and highlights a few gems in the shopping center arena.
KeyBanc analyst said, "The shopping center REITs underperformed the RMZ by 500 bps in 2011, despite improving fundamentals, as many anchor and junior anchor vacancies were leased. With a good portion of outstanding anchor and junior anchor vacancies buttoned up, and with retailers taking occupancy throughout 2012 and into early 2013, we expect EBITDA growth to ramp and lead to increasing demand for small shop space and in line retailers. Consistent with our broader outlook, we remain more cautious on names with premium valuations heading into 2012, given our expectation that the valuation gap between high and low-multiple names will narrow."
"Our picks. Consistent with our theme of favoring low-multiple names that we feel offer investors attractive risk-adjusted return opportunities, we are reiterating our BUY ratings on DDR Corp. (NYSE: DDR) and Ramco-Gershenson (NYSE: RPT) in the shopping center space, both of which have completed a significant amount of deleveraging and are poised to benefit from recent leasing completed over the last four to six quarters. We also reiterate our BUY rating on Glimcher Realty Trust (NYSE: GRT), which we expect to benefit from the gradual stabilization of Scottsdale Quarter (Scottsdale, Ariz.) along with leasing and investments completed at a number of the Company’s malls."
Our other BUY ratings in the retail space include Acadia Realty (NYSE: AKR) and Excel Trust (NYSE: EXL).
KeyBanc downgraded Taubman (NYSE: TCO) and Tanger Factory Outlet (NYSE: SKT)
KeyBanc analyst said, "The shopping center REITs underperformed the RMZ by 500 bps in 2011, despite improving fundamentals, as many anchor and junior anchor vacancies were leased. With a good portion of outstanding anchor and junior anchor vacancies buttoned up, and with retailers taking occupancy throughout 2012 and into early 2013, we expect EBITDA growth to ramp and lead to increasing demand for small shop space and in line retailers. Consistent with our broader outlook, we remain more cautious on names with premium valuations heading into 2012, given our expectation that the valuation gap between high and low-multiple names will narrow."
"Our picks. Consistent with our theme of favoring low-multiple names that we feel offer investors attractive risk-adjusted return opportunities, we are reiterating our BUY ratings on DDR Corp. (NYSE: DDR) and Ramco-Gershenson (NYSE: RPT) in the shopping center space, both of which have completed a significant amount of deleveraging and are poised to benefit from recent leasing completed over the last four to six quarters. We also reiterate our BUY rating on Glimcher Realty Trust (NYSE: GRT), which we expect to benefit from the gradual stabilization of Scottsdale Quarter (Scottsdale, Ariz.) along with leasing and investments completed at a number of the Company’s malls."
Our other BUY ratings in the retail space include Acadia Realty (NYSE: AKR) and Excel Trust (NYSE: EXL).
KeyBanc downgraded Taubman (NYSE: TCO) and Tanger Factory Outlet (NYSE: SKT)
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