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Cousins Properties Cuts Dividend – Analyst Blog

Zacks Market Commentaries — Fri, 17 Jul 2009 17:10:49 +0000

Cousins Properties Inc. (CUZ), a leading real estate investment trust (REIT), has drastically reduced its third quarter dividend in order to conserve cash in the current credit-constrained market. The company has declared a third quarter dividend of $0.15 per share, down from $0.25 in the previous quarter.

The reduction in the quarterly dividend payout was based on the current estimate of taxable income. In order to maintain the REIT standard, companies are required to pay annually at least 90% of the taxable income as shareholder dividends.

Cousins Properties will pay the third quarter dividend in a combination of cash and stock. The cash component would not exceed one-third of the total dividend. Shareholders would have the right to decide on the composition of the dividends.

With the reduction in dividend, the company expects to retain a significant portion of its resources to capitalize on potential investment opportunities surfacing during the current recession. Furthermore, in order to increase liquidity, Cousins Properties have also scaled back its retail and office development pipeline.

As of March 31, 2009, the owned portfolio (including development/redevelopment properties) of the company consisted of interest in 7.5 million square feet of office space, 4.7 million square feet of retail space, 2.0 million square feet of industrial space, and 9,529 acres of land for future sale or commercial development.

In addition, Cousins Properties (including JVs) had four retail and office projects in various stages of development, totaling 1.8 million square feet. The properties are spread throughout the US, including Atlanta, Charlotte, Austin, San Francisco, Los Angeles and Washington DC.

Market fundamentals are deteriorating for office and retail landlords throughout the country due to the continued economic downturn. With high market vacancies and no job growth, rental rate growth on new leases will also be non-existent for some time.

Consequently, with no short-term growth indicators, the company represents a bleak outlook. We reiterate our Sell rating of the company.

Read the full analyst report on "CUZ"
Zacks Investment Research

Cogdell Spencer, Inc. (CSA) Subsidiary Signs Two Large Contracts

QualityStocks — Fri, 17 Jul 2009 12:53:38 +0000

Cogdell Spencer ERDMAN, wholly owned subsidiary of Cogdell Spencer, Inc., signed two contracts totaling $88.8 million to construct two Healthcare facilities in Wisconsin. The deal helps solidify the company’s leading role in the Healthcare Real Estate Industry. The first contract is for $53.9 million and is to construct the St. Mary’s Janesville Hospital, a 160,000 [...]

Vornado Considers Private Fund – Analyst Blog

Zacks Market Commentaries — Wed, 08 Jul 2009 16:09:23 +0000

Vornado contemplates floating own private equity fund

According to a report published in the Wall Street Journal, Vornado Realty Trust (VNO), a real estate investment trust (REIT), is considering plans to create its own private equity fund. The company intends to float the fund to acquire bargain-basement properties, primarily in the markets where it already has a presence.

Based in New York, Vornado acquires, owns, and leases office properties, retail space, and temperature-controlled logistics and refrigerated warehouses. The company owns and manages approximately 100 million square feet of real estate (including pro-rata share of partially owned properties and joint-ventures).

Geographically, Vornado has over 34 million square feet of office space in New York and DC, 22.2 million square feet of retail space in 21 states in the US and Puerto Rico, and 8.9 million square feet of Merchandise Mart space. Besides its properties, the company also has investments in other REITs, industrial buildings and Toys ‘R’ Us.

The company plans to raise $1 billion from potential investors for creating the fund, tentatively named as Vornado Capital Partners LP. In addition, Vornado also intends to supplement the fund by $200 million from its own coffers. The fund would aim to acquire assets at fire sale prices.

Smaller private developers and owners are running into problems refinancing loans due to problems in the credit markets. As such, it is possible that Vornado could take advantage of distressed selling as asset values of office and retail properties continue to drop.

With an equity market cap of nearly $6.5 billion, Vornado is by far the largest public diversified REIT. The company concentrates mostly on Class A office properties in urban areas. We largely favor urban office owners over suburban as it is much easier to fill space and increase rents in high-barrier metro areas. Consequently, we reiterate our Buy rating of Vornado.

Read the full analyst report on "VNO"
Zacks Investment Research

Sears Holdings as a REIT

Daniel Hung — Fri, 26 Jun 2009 03:07:00 +0000

My most recent post on mall REITs (SPG in particular) got me thinking about Sears Holdings, a company that I disparaged a few weeks ago in a post called, “Unsuccessful Profits.” More particularly, my chart on REIT valuation based on square footage owned made me wonder. Aas you can tell, price per square foot data can [...]

Commercial Real Estate Plunging – Analyst Blog

Dirk Van Dijk — Thu, 25 Jun 2009 19:37:43 +0000

Yesterday, Moody's released its commercial real estate index and reported that nationwide prices for all types of commercial real estate (CRE) plunged by 8.6% in April from March and now stand 25.3% below a year ago, and are off 29.5% from their October 2007 peak.

The Moody's/REAL CPPI is a repeat sales index constructed very much along the same lines as the Case-Schiller index of residential real estate prices. In the graph below, Calculated Risk (http://www.calculatedriskblog.com/2009/06/cre-and-residential-re-prices.html) has overlaid the Case-Schiller index on the graph from the Moody's report. It clearly appears that CRE prices follow housing prices with about an 18-month lag.

This is consistent with other findings that investment in CRE (i.e. new building of offices and stores) follows residential investment by about the same period. While the CRE price decline started later than that for houses, it is happening at a much faster rate.

While the all property index shows a monthly change, the sub-indexes by property type are only available on a quarterly change basis. Relative to three months ago, office building prices have been particularly hard hit, plunging 18.6%. Prices of retail buildings have fallen by 12.9%.

By comparison prices for Apartments and Industrial space have held up well, dropping by just 0.4% each. However, on a year-over-year basis they are both down sharply, Industrial space by 12.3% and Apartments by 16.1%. On a year-over-year basis, retail space has lost 18.5% of its value while office space has plunged by 28.9%.

The reason why the value of CRE is falling is not a mystery. If stores are closing, then they will not be paying rent, and landlords will not be in a position to get rent increases from the remaining stores. If a company is laying off lots of people it will have lots of empty cubicles and offices, and will be looking to sublet its existing space, competing directly with the landlords trying to rent out existing space.

In addition, as recently as the second half of last year, construction of new commercial real estate was still very robust, meaning that there is lots of new space that has recently come on line. Still, a 8.6% decline in a single month is startling and is very bad news for REITs like Mack-Cali (CLI), Liberty Properties (LRY), Post Properties (PPS) and Cousins Properties (CUZ).

We have already seen commercial delinquencies and foreclosures start to rise, and this will be a major headache for the banks going forward. Many small- and mid-sized banks ($1-10 billion in assets) are very heavily exposed to CRE. This could cause them to be the guest of honor at one of the Friday night pizza parties put on by the FDIC. However, individually these banks do not threaten the financial system the way the stress-tested 19 would if they failed.

Read the full analyst report on "CLI"
Read the full analyst report on "LRY"
Read the full analyst report on "PPS"
Zacks Investment Research

Grand Larceny on a Super-Madoff Scale

Bill Bonner — Wed, 24 Jun 2009 15:00:32 +0000

pThis is the age where politicians get their chance to run up huge debts. “Politics is about what works,” said Hillary Clinton. At least, we think it was Hillary Clinton. Someone said it. Someone who is an imbecile./p pPolitics is not about what works, it’s about what you can get away with. And what you can get away with is often exactly what doesn’t work at all./p pOur beat is money, here at the a href="http://www.dailyreckoning.com" class="alinks_links"Daily Reckoning/a. We specialize in fraud and folderol. We leave the homicide beat to someone else./p pWhat the US is getting away with, from a financial point of view, in addition to counterfeiting, is very grand larceny on a Super-Madoff scale. It is borrowing trillions of dollars even though#8230;/p

For Better or Worse

Contrarian Profits — Thu, 18 Jun 2009 14:40:45 +0000

pWorldwide indexes reclaim that losing feeling, The skinny on those TARP repayments and two curiously conflicting assessments,Four factories for one McMinimum Wage house and plenty more…/p p class="MsoNormal"“Are things getting worse or are things getting better?” we wondered aloud in yesterday’s edition of the a href="http://www.agorafinancial.com/afrude/" class="alinks_links"Rude Awakening/a./p p class="MsoNormal"In today’s edition, we provide a few answers – well, not answers, really…just observations from you, the Rude readership. In the column below, we present a few real-world anecdotes from Rude Awakening readers. This narrow sampling of economic observations is hardly scientific, but it may be illuminating nonetheless./p p class="MsoNormal"Before we get into these real-world stories, let’s examine a couple of recent stories from Fantasyland - otherwise known as Wall Street. Seven of America’s largest banks repaid their TARP#8230;/p

Market Deceptions

Bill Bonner — Tue, 05 May 2009 21:03:21 +0000

pHappy days are here again! Enjoy them while they last… “Optimism builds,” says a headline in the emFinancial Times/em. As predicted, the world markets are enjoying a bounce. strongPeople who had no idea there was anything wrong with the world financial system two years ago, now say the problem has been fixed./strongstrongbr / /strong/p pWho fixed it? The people who had no idea what was wrong with it, of course./p pWhat did they fix it with? The same thing that caused the problem they didn’t see – debt./p pWho makes sure it won’t break again? The people who didn’t notice the wheels coming off the last time./p pYesterday, the Dow rose 214 points. Oil closed over $54. Gold ended the day over $900. And dollar sank#8230;/p

Omega Commercial Finance Releases Statement to Update Shareholders

Stuart T. Smith — Thu, 30 Apr 2009 13:56:11 +0000

MIAMI, April 30, 2009 (GLOBE NEWSWIRE) — Omega Commercial Finance Corporation (Pink Sheets:OCFN) has released the following statement to its shareholders: In keeping with our pledge to increase transparency and improve the effectiveness of communication with our investor community, we are initiating a series of periodic updates to help keep potential investors and shareholders informed about [...]

Analysts Clash, American’s Aren’t Moving, Stock Outlook, New Sector to Watch, and More!

Addison Wiggin — Fri, 24 Apr 2009 12:54:13 +0000

pA.F. analysts clash… can the niche retailer survive the credit crunch?#8230;Crisis begets steadfast citizens… Americans move about the country at lowest rate in 47 years#8230;A long-term outlook on the American stock market#8230;The latest sector to catch a href="http://www.contrarianprofits.com/articles/author/chris-mayer/" class="alinks_links"Chris Mayer/a’s attention#8230;U.K. launches historic spending spree, hikes taxes to 50%../p p strongIf the credit-strapped suburban mall culture is truly on the rocks, how long do you think this can survive:/strong/p tr p style="text-align: center;"/p /tr p align="center"emLady Amaranth, Goth Temptress/em/p p strongAmong our analysts, a debate brews at the heart of the current consumer conundrum:br / /strongbr / “Cutting-edge apparel retailer Hot Topic,” writes Wayne Burritt, about the purveyor of goth clothing and lip-piercing paraphernalia, “is loaded with attractive fundamentals and technicals, while its call options offer an oversized premium. Hot Topic is a mall and Web-based specialty#8230;/p

Retailers Learning Their Lesson – Analyst Blog

Zacks Market Commentaries — Mon, 30 Mar 2009 18:40:58 +0000

Highlights include Saks Inc. (SKS) and Wal-Mart Stores Inc. (WMT).

Retailers Adjusting to Consumer Behavior

While shoppers are currently looking for marked-down spring and summer apparel, retailers are already looking ahead to the 2009 holiday season. The holidays provide specialty retailers with about 40% of sales and the bulk of their annual profits. When those retailers experience a tough holiday season, their entire year suffers.

However, it appears that the lessons of Christmas Past (2008) have not been lost on retailers. Retailers entered the 2008 holiday season with too much inventory and were forced to mark down merchandise by 70%, 80% or even 90% in order to encourage shoppers to spend. No retailer wants a repeat performance in 2009.

It's early, but there are signs retailers are beginning to accept that consumer behavior has changed. Retailers understand that we are not headed back to the days of debt-fueled retail spending that increased 5% per year. Consumers are saving more, spending less, and trading down to lower-cost alternatives when they do spend.

Retailers such as Saks Inc. (SKS), which plans to cut its inventory by 20% in 2009, are already putting in orders for the 2009 holiday season. Saks is focused on reducing the amount of merchandise it orders and negotiating lower prices on the merchandise it does order. The company notes that full-priced selling is "largely a result of supply and demand." No retailer wants to end the holidays with a glut of inventory on the shelves, because that leads to huge mark-downs and thin profit margins.

For some time, we have said that there is too much retail space, too many stores, and too much inventory. But most retailers have been reducing square footage and reducing inventory levels per store. Those efforts will help bring supply (the amount of retail merchandise available for sale) in line with demand (the amount consumers are willing to spend). What's more, if more retailers make the decision to sacrifice sales growth in order to maintain profit margins, this will be one of the most positive trends we've seen in the last 2 years.

That said, it will not signal the "all-clear" for retailers. After all, total sales won't be growing year-on-year, and there will be winners and losers in the space. However, it does mean that we can begin to look at retailers beyond Wal-Mart Stores Inc. (WMT) as investments and not simply short-term trading vehicles.
Read the full analyst report on "SKS"
Zacks Investment Research

The Ritz-Carlton Shenzhen Opens In Mixed-Use Complex

China Retail News — Tue, 24 Mar 2009 19:30:31 +0000

The 282-room Ritz-Carlton Shenzhen has opened, making it the fifth property of the luxury hotel brand to have opened in China in the space of slightly more than two years. The mixed-use complex will include The Ritz-Carlton Shenzhen, office space, and high-end retail space and is located next to a metro station serving the city's two [...]

Under Armour (UA) Gets Penalized by Analysts

Alexander Green — Fri, 16 Jan 2009 14:20:00 +0000

pYesterday(1/13), strongUnder Armour/strong (NYSE: a href="http://finance.google.com/finance?q=NYSE%3AUA"UA/a) fell 16%. It’s dropped almost 30% over the past month. Today’s (1/14) price of $18.25 getting close to the 52-week low of $16.05 it reached in November. And to add insult to (sports?) injury, original investors in the athletic wear company will note it’s well below what they paid in the 2005 IPO. /p pBut while many analysts suggest this company may be a one trick pony – akin to strongCrocs, /strong(Nasdaq: a href="http://finance.google.com/finance?q=NASDAQ%3ACROX"CROX/a). They couldn’t be more wrong. The reason its share price was penalized was that analysts were expecting $1.09 instead of the .79 reported./p pThis is a classic case of overreaction from a negative earnings report./p pThe fact of the matter is that this brand has developed a#8230;/p

Under Armour (UA) Gets Penalized by Analysts

Investment U — Wed, 14 Jan 2009 15:31:36 +0000

Under Armour (UA) Gets Penalized by Analysts Yesterday, Under Armour (NYSE: UA) fell 16%. It’s dropped almost 30% over the past month. Today’s price of $18.25 getting close to the 52-week low of $16.05 it reached in November. And to add insult to (sports?) injury, original investors in the athletic wear company will note it’s well [...]

Guest Article: Lessons Learned from Second Life

Fred Fuld — Thu, 30 Oct 2008 05:32:00 +0000

Lessons Learned from Second Life
By Dr. Tracy Tuten,
Author of Advertising 2.0: Social Media Marketing in a Web 2.0 World

Virtual worlds give participants an opportunity to be whoever they want, wish or hope to be. With a custom designed "avatar," you can look, behave and speak any way you want. It's your "second life," after all.

Brands, however, don't have that luxury. They bring established reputations and perceptions into a realm where everything is new and anything goes.

The "Wild West" nature of virtual worlds frightens brand managers schooled in carefully crafted and controlled messages, and Second Life indeed chased many away.

But with technology -- and especially social media -- becoming more and more pervasive in consumers' lives, virtual worlds will get a second chance. Here's how to capitalize on it.

Second Life and other virtual worlds have enormous branding opportunities. In terms of social media, virtual worlds really are communities in the most literal sense, and it is the level of interaction and engagement that creates such a strong platform for branding. Some brands (like Vodaphone) have found ways to develop interactive spaces in world that intrigue and engage prospective customers. For these brands, virtual world marketing is much like participating in a sponsorship: the presence is valuable if there's a good fit between the space, the target market and the brand -- and if the brand can find a way to add value for those visiting the space.

For some brands, though, virtual worlds are not the most friendly of communities. They may find that other forms of social media marketing are better suited -- or at least simpler to manage (particularly if the virtual world in question is Second Life)! Here are a few factors that can help you understand "why" . . . or "why not."

Ease of Use
Second Life is complex and user-unfriendly. Time magazine called it a case of Fortune 500 companies trying too hard to be hip. A recent report from Forrester suggests that marketing in virtual worlds is still too complex for broad adoption as a business strategy, but that this is likely to change in the next five years. Complexity is an issue, not only from the marketer's perspective, but also from the consumer perspective. It is one of the primary characteristics that can slow the rate of adoption for innovators. Some virtual worlds are easier to learn than others; Second Life is likely the most difficult to learn.

Software Requirements
Second Life, and some other virtual worlds, requires users to install its software. Software installation could be a deterrent to growth beyond the innovators and early adopters already a part of the virtual world phenomenon.

Number of Active Members
Second Life, for example, does not have the reach that other online advertising venues garner. Despite the claim of millions of residents (with continual growth), under a million are active and engaged.

Opportunities for Negative Response
Residents of Second Life are known to dislike and distrust big brand promotion. "Griefing," vandalizing and harassing in world, is a common problem for brands. Linden Labs takes a hands-off approach to managing griefer attacks, relying instead on resident governance. How bad can griefing be? A helicopter crashed into a Nissan building, starting a fire that left a couple of dead bodies, and American Apparel customers were attacked by members of the Second Life Liberation Army armed with virtual guns.

Accuracy of Results Reporting
Second Life offers publicity and the value of free media impressions as social and other media cover new developments. However, no distinction is made between positive coverage and negative coverage. When the media attention is negative, such as reporting attacks on customers, the publicity does not build brand equity.

User Security
Aside from the security from griefers, Second Life has struggled to provide security to the real life people behind the avatars. In 2006, hackers obtained credit card information for some residents.

User Capacity
Second Life's infrastructure limits the capacity at some events. Your brand might do a phenomenal job of planning and executing a relevant brand experience with an outpouring of enthusiasm, only to find the system crashes when more than 70 avatars are present at a time.

Number of User Interactions
Of course, capacity concerns are only an issue if things go well. Spend some time walking or flying around Second Life. It is filled with exquisitely detailed representations of real and fantasy locations. Yet seeing other avatars is rare unless one is spending time earning free Linden $ (the currency of Second Life) at Money Island.

Tie-In to Real World Sales
Some brands have sold digital versions of their products. Toyota, Reebok, Adidas, and Dell are all examples. No brand has yet announced success at using the in world branding site as a direct response tool for real world sales. Bob Tedeschi, in his article entitled "Awaiting Real Sales from Virtual Shoppers," explains that brands experience little measurable influence on real world sales that can be tracked to virtual branding efforts.

Number of Media Outlets
There are still a limited number of Second Life media outlets and advertising opportunities (beyond supporting retail space, experiential facilities, and events). NPR and Reuters are there, along with the AvaStar newspaper, but for brands accustomed to buying ad space in hundreds of television networks, consumer and trade magazines, and national, regional, and local newspapers, this is not a rich media landscape. Ad inventory will develop over time. A "MetaAdverse" network has been established to provide in-world billboard advertising.

Scalable Branding Initiatives
It is difficult to gain economies of scale in branding initiatives. One cannot lower the average costs of products by making mass amounts of products, and there are no huge media buys to lower the costs of advertising.

Design Costs
There are expenses to brand building in Second Life. Linden Labs sells land and then requires ongoing maintenance fees. Those are minimal compared to the design expenses brands encounter. Alex Veiga points out that brand building requires artists, designers, writers, and marketers to develop all aspects of the brand's identity in Second Life. Scion City, a Toyota initiative, took about 10 weeks and probably cost in the range of $100,000. Importantly, brands that enter Second Life must be committed to operating there. It does no good (and in fact could harm a brand) to have a presence there that is not manned, managed, and leveraged towards accomplishing the brand's objectives.

In open worlds, economies are free markets. Brands are welcome to compete and the spoils go to the brands with the best strategy, the best targeting and the best engagement propositions for their target audiences (mindful, of course, to ensure the strategy is suitable for the virtual culture in question). The brands with the wherewithal to strategically plan a social media marketing campaign will also know to commit to the campaign and to provide ample time for the strategy to work prior to making judgments of success or failure and redirecting resources to other marketing executions.

In other words, they'll understand and capitalize on why . . . or why not.

Â©2008 Dr. Tracy L. Tuten

Author Bio
Dr. Tracy L. Tuten is Associate Professor of Marketing at Longwood University and the author of "Advertising 2.0: Social Media Marketing in a Web 2.0 World." Tuten's research interests include Web-based survey methods, branding and identity, and online advertising. She serves on the editorial review board for Psychology and Marketing.

Weekly Market Wrap-Up

Graham Summers — Sat, 13 Sep 2008 01:57:06 +0000

Sep 12th, 2008: Frannie, Lehman, Commercial Real Estate, and Gold

Tetra Tech Inc. (TTEK) – Reaching the World

QualityStocks — Thu, 04 Sep 2008 14:05:42 +0000

With over 275 offices worldwide and approximately 8,500 employees, Tetra Tech Inc. is a leading provider of consulting, engineering, and technical services. Founded in 1966, and listed on the NASDAQ, the company operates in three segments: Resource Management, Infrastructure Services, and Communications Services. Their corporate mission is to be the premier global consulting and engineering [...]

Kohl’s: Best of Breed in Retail?

Turley Muller — Sun, 26 Aug 2007 18:20:13 +0000

In looking at a few names: Kohl’s (KSS), Wal-Mart (WMT), Costco (COST) and Target (TGT), I find Kohl’s to be the most compelling. Costco appears to be rich, and Target and Wal-Mart look fairly valued. Kohl’s offers best growth potential at lower multiples, as well as the highest margins and return on assets. Concerns over consumer [...]