Stock Pick 101
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Inside The Real Estate Development Sector


-Max Levin

Since the market bubble in 2008 the U.S. real estate economy has steadily been recovering. Real Estate prices have dramatically increased, vacant and rundown building’s have been revamped, and most of all, consumer confidence has once again been regained. As the sector continues to grow, the market will react to the positive situation with higher demand and prices. One of the best longterm investments for not only the younger generation, but every investor, is real estate.

Real Estate Development organizations and Real estate investment trusts “REIT’s” are rebuilding the worlds infrastructure on massive scales. Stocks in this sector are evaluated on not only their current valuation, but their future potential earnings. Investing in companies within the real estate sector allow your portfolio to have diversity with a nonvolatile investment and a strong dividend.

Property developers projects range from renovation of existing buildings to the purchasing of virgin land, then allocating the property to investors. For example, a company in this sector may purchase a vacant building, renovate the location, then either reselling the property, lease it, or manage the location. It is a very effective strategy, which allows these companies to fetch huge returns. There are many stocks on the exchange that have huge potential for a longterm investment.

Brookfield Asset Management Inc. (BAM) has a 26.15 Billion dollar market cap with a 2.00 percent yield. BAM specializes in the infrastructure sector by owning office buildings, residential communities, and client offering services. If you look at BAM’s longterm chart you can see a steady uptrend of their 2009 share price of 13, to their current share price of 40.

EPR Properties (EPR) has a market cap of 2.84 Billon dollars and pays a 6.5 percent yield! EPR owns, leases, and develops properties throughout the United States.  If you look at their longterm chart, you can see a very stable up trend, perfect for a holding investment.

Highwood Properties (HIW) is a very stable company within the real estate development sector. They pay a huge dividend of 4.5 percent and have a stable market cap of 3.42 Billion. HIW’s portfolio includes office buildings, industrial sites, and retail properties mostly on the West Coast. A little more volatile than other companies in their sector, however, HIW’s portfolio is analyzed to keep growing do to their strong cash position.

Rayonier (RYN) has a market cap of 5.74 Billion with a 4.30 percent yield. Rayonier is a very unique company as they specialize in not only real estate, but also timber, performance fibers, and wood products. They own about 3 million acres of realestate throughout the world. As a longterm investment, when looking at their longterm charts, you can see a huge increase in share price from nearly ten dollars to sixty dollars within a 10 year window.

CoreSite Reality Corporation (COR) pays a dividend of 4.6 percent yet has a small but growing market cap of 700 Million Dollars. From 2010 to today, COR has risen nearly 30 points. As they continue to grow, so will their portfolio of properties and acquisitions.

As you can see, adding real estate stocks to your portfolio is a great longterm strategy due to the large dividend and enormous future valuations. As the economy continues to get better, so will the value of property and real estate market.

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