Recent

% | $
Quotes you view appear here for quick access.

Neuberger Berman Real Estate Se Message Board

  • Python_71 Python_71 Feb 8, 2008 3:06 PM Flag

    Portfolio Upgrade Opportunities

    Our Neuberger Berman portfolio manager (Steven Brown) rocks!!! I noticed from the latest NRO fact sheet, the fund started performing some upgrading swaps into commercial finance REITS. Investing more capital into REITS like GKK and CP is awesome for long-term performance in my opinion. These are exactly the type of opportunities you want to take advantage of (book values close to 1, yields over 11%, and strong cash flows). Statistics show that low Price/Book, Price/Cash Flow, and Price/Dividend stocks outperform the market over time with lower volatility.

    Commercial finance REITS are trading at residential finance discounts. The two sectors are like night and day. Ridiculously overvalued residential sector compared to modestly overvalued commercial sector at its peak. Current discounts on commercial REITS have likely more than corrected for any excess valuations relative to cash flows. Additionally, these REITS have diversified portfolios of solid corporate clients paying on long-term leases. This compares extremely well to residential properties/loans dependant on debt-burdened clients with stagnant wages that are better off walking away from their homes (foreclose). I would rather buy discounted cash flows from a portfolio of corporate clients that can raise capital in the financial markets than cash flows dependant on a portfolio of individuals vulnerable to layoffs. Although companies may struggle during hard times, they still have to pay their leases while they restructure. Better to be the landlord than the company reporting disappointing earnings to Wall Street in times like these ;)

    I commend our portfolio manager for taking advantage of the excellent opportunities available. Upgrading the average relative valuation and FFO of the securities in our portfolio should drive continued long-term above-average performance compared to our peers. With the unjustified discounts currently available because of our subprime residential crisis, the name of the game should be the accumulation of commercial REITS with the lowest prices relative to strong and secured FFOs.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • (Correction ...GKK and CT...)

      Our Neuberger Berman portfolio manager (Steven Brown) rocks!!! I noticed from the latest NRO fact sheet, the fund started performing some upgrading swaps into commercial finance REITS. Investing more capital into REITS like GKK and CT is awesome for long-term performance in my opinion. These are exactly the type of opportunities you want to take advantage of (book values close to 1, yields over 11%, and strong cash flows). Statistics show that low Price/Book, Price/Cash Flow, and Price/Dividend stocks outperform the market over time with lower volatility.

      Commercial finance REITS are trading at residential finance discounts. The two sectors are like night and day. Ridiculously overvalued residential sector compared to modestly overvalued commercial sector at its peak. Current discounts on commercial REITS have likely more than corrected for any excess valuations relative to cash flows. Additionally, these REITS have diversified portfolios of solid corporate clients paying on long-term leases. This compares extremely well to residential properties/loans dependant on debt-burdened clients with stagnant wages that are better off walking away from their homes (foreclose). I would rather buy discounted cash flows from a portfolio of corporate clients that can raise capital in the financial markets than cash flows dependant on a portfolio of individuals vulnerable to layoffs. Although companies may struggle during hard times, they still have to pay their leases while they restructure. Better to be the landlord than the company reporting disappointing earnings to Wall Street in times like these ;)

      I commend our portfolio manager for taking advantage of the excellent opportunities available. Upgrading the average relative valuation and FFO of the securities in our portfolio should drive continued long-term above-average performance compared to our peers. With the unjustified discounts currently available because of our subprime residential crisis, the name of the game should be the accumulation of commercial REITS with the lowest prices relative to strong and secured FFOs.

 
NRO
5.965+0.075(+1.27%)12:42 PMEDT