Real Estate Sector Expertise
Always attuned to the opportunities and changing conditions in the real estate industry, National is particularly active in subsectors such as residential multifamily, industrial/ warehouses, as well as internet-resistant retail centers in well-defined geographies. With an understanding of the ongoing capital needs of real estate vehicles to grow and expand, our banking team often focuses on repeat mandates of capital raising and advisory services for private and public corporate issuers or funds with various strategies and investment horizons—from short-term opportunistic asset monetization to long term repositioning and holding. Our real estate banking professionals maintain a steady focus on sustainable and improving dividend yield with the potential for additional capital appreciation.
Real Estate Sector Coverage
Real estate research coverage at National is a two-pronged approach, combining broad, multi-sector fundamental knowledge with deep company and security-specific analysis. The methodology employed by the sector’s dedicated analyst provides investors a unique approach to investing in the REITs sector that is quantitatively oriented, streamlined and disciplined. The research methodology accommodates a variety of secondary variables, including interest rates, supply-demand ratios, and the political/tax landscape.
BRT APARTMENTS CORP (BRT: Buy, $16 PT)
August 8, 2019– We are reiterating our BUY rating and $16 price target on BRT, following
2Q19 results. Same-store revenues were driven by higher rents and occupancy gains while
expenses remained elevated. SSNOI was higher than multifamily REIT average. External growth
included an acquisition and two dispositions, and renovations returns were attractive Our PT of
$16.00 implies a 12-month total return of approx. 24.2%, including a 5.9% dividend yield.
Bluerock Residential Growth REIT, Inc. (BRG: Buy, $14 PT)
August 7, 2019– We are reiterating our Buy rating and raising our price target to $14 from $13
on BRG, following 2Q19 results. BRG reported sector-leading same-store NOI growth and raised
2019 outlook, reflecting exposure to robust markets in the Sunbelt and renovations, in our opinion.
Post 1Q, the company recycled capital into higher growth assets, issued preferred stock to fund
external growth and continued to create value through renovations.
Plymouth Industrial REIT (PLYM: Buy, $21 PT)
October 4, 2019–
We are reiterating our BUY rating and $21 price target following company’s recently closed secondary offering of 3.45m shares for net proceeds of $58.8m. We believe that PLYM’s acquisition activity and the capital raise implies that the company continues to have access to capital and opportunities to deploy the capital at attractive yields.
Independence Reality (IRT: Neutral, $14 PT)
September 27, 2019– We are initiating coverage of IRT with a Neutral rating and $14.00 price target. We view company’s capital recycling and redevelopment program positively. In the last few years, the company has lowered its leverage and plans to further lower it. While the common dividend is not currently covered by AFFO, the company expects coverage by 4Q19. The company’s current regional exposure screens below-average in our analysis as compared to 11 publicly traded multifamily REITs. We are Neutral on IRT as we believe that the stock is appropriately valued at current pricing. YTD 2019, IRT has returned approx. 63.6% vs. 30.0% for multifamily REITs, 27.5% for IYR and 18.6% for S&P.