Real Estate Stock Analysis Adam Watson, Brian Yang, Tianlai Zhao, Binzhao Zou

Real Estate Stock Analysis Adam Watson Brian Yang Tianlai Zhao Binzhao Zou-ppt Download

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1.Real Estate Stock AnalysisAdam Watson, Brian Yang, Tianlai Zhao, Binzhao Zou1

2.Real Estate (REIT)Overview of Real EstateCurrently SIM owns 0%2.93% of S&P 5002

3.Real Estate (REIT)Current Real Estate Market3

4.Real Estate (REIT)CompanyREITIndustryRecommendationBasis Points(293 Available)CurrentPriceDuke RealtyIndustrialWatch0 27.43SimonPropertyGroupRetailBuy100 171.48EquityResidentialResidentialBuy130 63.50BostonPropertiesOfficeWatch0 135.65DigitalRealty TrustData CenterBuy63 109.30TargetPrice 25.09Upside/Downside-8.50% 208.05 21.32% 75.00 18.11% 144.51 6.50% 134.48 23.00%4

5.Duke Realty (NYSE: DRE)Business455 industrial properties86 healthcare propertiesDriversPresident Trump’s pro business policies - (Warehouse Portfolio)Growing trend of e-commerce businessesRisksUncertainty of healthcare portfolioIncrease in interest rates by Fed5

6.Financial Analysis201320142015201620172018Sales 1,081,790 1,164,704 949,432 902,244 929,594 1,018,779FFO pershare 1.07 1.07 .86 1.21 1.24 1.35 1.25 1.33 .90 .98 .35 .36ConsensusestimatesEPS .47 .60 1.77 .88ConsensusestimatesROE6.757.5520.379.396

7.DCF Valuation7

8.DRE Absolute Basis8

9.DRE vs. S5REAL9

10.Equity Residential Corporation (NYSE: EQR)52wk Range:Beta:Market Capitalization:Price to Earnings 58.28 – 72.360.60 23.88B39.161Current PriceRevenueRevenue GrowthTarget Price63.502.74B6% 7510

11.EQR Valuation vs. S&P 500 and S5REAL11

12.Business Drivers• Good macroeconomic environment: Low unemployment rate and high GDPGrowth rate•Strong business strategy: Big coastal markets•Sustainability: Decrease cost and increase profitability12

13.Sensitivity Analysis13

14.Equity Residential Corporation - RecommendationCurrent Price: 63.50Target Price: 75.00Upside: 18.11%Recommended Weight : BUY 130bps14

15.Simon Property Group (NYSE: SPG)Company OverviewSimon Properties Group is American commercialreal estate company in the United State and thelargest real estate investment trust that developsand leases retail real estate, specifically regionalmalls, shopping centers and strip malls, with aportfolio of over 200 retail properties totalingapproximately 185 million sq. ft. of leasablespace across more than 35 states and PuertoRico. The REIT also has stakes in outlet centersin Canada, Mexico, Europe and Asia. CEO andChairman David E. Simon is the son of MelvinSimon, who founded the firm with his brother,Herbert.••••••••••Current Price: 171.48Target Price: 208.05Beta:0.64Market Cap: 61.58BShare Outstanding:331.3MP/E ratio:29.17Dividend Yield:3.91%52 wk Range: 163.55- 229.10EPS: 5.87Revenue: 5.44B15

16.Business Analysis1. Macro-economic Environment: slow recovering economic, moredisposal income, boost on consumer confidence2. Strategic Position: focus on high-end market, improvement in topmanagement team.3. Revenue Driven Factor: ability to locate attractive acquisitionopportunity, focus on quality of customer experience4. Cost Driven Factor: aggressive cost control, energy efficiency plan16

17.One Year Stock Performance -17.84%17

18.18

19.Absolute BasisHighLowMedianCurrentP/E78153942.8P/B2.90.7522.4P/S7.11.95.46.2P/EBITDA16.53.8112.114.4Relative BasisHighLowMedianCurrentP/E3.191.242.302.02P/B1.032.041.221.23P/B3.682.474.033.33P/EBITDA1.460.871.661.2719

20.Sensitivity Analysis20

21.Simon Property Group - Recommendation Current Price: 171.48 Target Price: 208.05 Upside: 21.32% Current Weight: 0 bps Recommended Weight: 100 bps21

22.Boston Properties, Inc. (NYSE: BXP)Company Overview••••Self-administered and Self-managed REITLargest owner, manager, and developer offirst-class office properties in the US.Markets• Boston• Los Angeles• New York• San Francisco• Washington DCSignificant Tenants• US Government (3.82%)• Citi Bank• Bank of America• Google• MicrosoftFinancial MetricsToday’s Price: 135.65Target Price: 144.51Avg. Rating:2.5 (2 Buy, 3 Hold)52 Week Range: 113.69 - 144.02Beta:0.95P/E Ratio:41.86P/B Ratio:3.76Profit Margin:20.02%ROE:7.21%Payout Ratio:98.59%22

23.One Year Stock Performance 6.13%23

24.DCF Valuation24

25.Digital Realty Trust (NYSE: DLR)Company Overview•Digital Realty Trust engages in the ownership,acquisition, development, redevelopment, andmanagement of technology-related real estate. Itfocuses on strategically located propertiescontaining applications and operations critical tothe day-to-day operations of technology industrytenants and corporate enterprise datacenter users.••Product Offerings• Data Centers• Interconnection• Colocation• Cloud ComputingSignificant Tenants• AT&T• IBMFinancial MetricsToday’s Price:Target Price:Avg. Rating:52 Week Range:Beta:P/E Ratio:P/B Ratio:Profit Margin:ROE:Payout Ratio: 109.30 134.482.2 (2 Buy, 3 Hold) 85.50 - 113.210.2649.654.2519.74%8.93%160.00%25

26.One Year Stock Performance 20.23%26

27.Digital Realty Service ExchangeProduct Line DifferentiationUtilizing existing partnerships and businessCustomer Oriented DesignData SecurityProprietaryHigh Barrier to Entry27

28.Global Location and ExpansionAvailability4 ContinentsUSEuropeSouth AsiaAustralia11 Countries150 LocationsAnd Growing!28

29.DCF Valuation29

30.Digital Realty Trust - RecommendationCurrent Price: 109.30Target Price: 134.48Upside: 23.00%Recommended Weight : BUY 63 bps30

31.REITRecommendation31

32.REIT RecommendationCompanyREITIndustryRecommendationBasis Points(293 Available)CurrentPriceDuke RealtyIndustrialSimonPropertyGroupTargetPriceUpside/DownsideWatch0 27.43 25.09RetailBuy100 171.48 208.05 21.32%EquityResidentialResidentialBuy130 63.50 75.00 18.11%BostonPropertiesOfficeWatch0 135.65 144.51 6.50%DigitalRealty TrustData CenterBuy63 109.30 134.48 23.00%-4.20%32

33.


Company Overview. Simon Properties Group is American commercial real estate company in the United State and the largest real estate investment trust that develops and leases retail real estate, specifically regional malls, shopping centers and strip malls, with a portfolio of over 200 retail properties totaling approximately 185 million sq. ft. of leasable space across more than 35 states and ...

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