Big Selloff in all Reits lately but DDR even more than most. I think they overpaid for Inland Retail and combined with rising rates, they have been hit hard. I never understood how these mall Reits could trade at 3.5% div yield and make sense.
Company trades at a discount to Green Streets NAV but I wonder whether all Reit NAV's should be reduced to reflect higher rates and likely lower property valuations. If the 10 yr stabilizes, I think this Reit and many others will rise 10-15% over the next year which is a nice return including dividends. If however, 10 yr gets to 5.5 or 6%, this Reit could trade at $45.
I have a small position in this that I got in the Inland Reail merger. Thankfully, I sold some a few months ago at $64. I plan to hold the rest and may add to the position if the stock gets below $50.
When housing was strong, a seller's market, the talking heads said the demand was driving the economy. New home sales meant new appliance sales and so forth. Now with housing in the dumper, a buyer's market, I don't hear the talking heads saying this will dump the economy. But it should, if the former logic was correct. Further rate increases will cause an economic recession. I'm not sure Bernake wants that problem just yet. The 10yr could hold here, the near term trend seems to confirm it. Bond buyers are streaming in and that means yield could drop. We've seen this play out many times. It's a cycle. DDR drops more then most and goes up more then most reits. It will hit 60 again.
Fifty should be a pretty good support area. As pointed out, REITS in general are undergoing a huge sector sell off. It is across the board and not limited to any one type of REIT. I'm in REITS for the very long hall (Have owned them for 5-15 years) and am accostomed to these periodic downturns. We got another similar break back in the summer of 2005. I like the gradually increasing dividends and the fact that many such dividends represent either a return of capital or a long term capital gain or both. That eases the tax burden somewhat.
These downturns can be frustrating for short term players (and not that much fun for us long termers eiher!) but I expect this squall will eventually run its course and the REITS will resume their upward course as they always have. Just check out the five year or "maximum" chart for solace. Keep the faith!