REITs Rage On
The DC region is home to a host of successful REITs, wooing individual and institutional investors alike. But can the success keep going? DC-area REITs (like Rockville-based Federal Realty, led by CEO Don Wood, who we snapped at ICSC in Vegas last year) are in a good position to keep shareholders happy, says Kern Investment Research founder Jack Kern, especially if a firm has operations that span the country, like Federal does, if not the world. A REIT like Federal (which closed around $111/share yesterday) might be poised for more growth since many of its projects lie in densely populated areas with big customer bases looking to spend, Jack tells us.
Even REITs solely focused on the DC area like WRIT (here's CEO Paul McDermott and retail VP Paul Weinschenk) and First Potomac are in good shape, Jack says, since congressional spending reductions "have a very long cycle," and major economic changes aren't expected to be seen this year, he tells us. Both WRIT (which closed at $24.49 yesterday) and First Potomac ($12.77) have massively streamlined their portfolios to improve operations in the past few years (through moves like WRIT's medical office sale to Harrison Street and First Potomac's industrial sale to Blackstone), a trend seen across the REIT world, Jack says.
Though not a REIT, another DC public company with real estate ties is reaching new heights: Andy Florance's CoStar. After closing at $175 on Feb. 7, CoStar's stock continues to rise, closing at $204.45 yesterday.