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May 23, 2012 8:34 PM EDT
Updated: Sep 2, 2010 6:25 AM EDT  

Real Estate

Kelley, McKeefrey, Dockery (212) 829-5482

News and Views

The REIT market closed at the highs of the session, outpacing the gains in the S&P by 30 basis points. At 10am we get Pending Home Sales data with expectations of a drop of 1% month over month. Homebuilders were especially strong on the back of the closure of the SEC's investigation into KBH's accounting practices (BHS +14.53%, KBH +11%, BZH +9.54%). Numbers from HOV were not as promising as some had hoped, with management blaming the weak sales trends on the loss of the tax credit, weak job creation, volatile stock market prices and the Gulf oil spill. Sales did tick up slightly in July and August from June levels for HOV, which saw a 7.60% gain yesterday. We feel comfortably above 700 for the moment in the RMZ, with the next significant barriers at 725 and the year highs of 745.


Macro/Technicals

RMZ: 710.93; +22.77; 3.309%
XHB: 14.722; +0.57; 4.028%
BJK: 26.12; +0.81; 3.2%

Leaders: BHS +14.53% KBH +11.06% OEH +10.19% BZH +9.54% FR +7.76% HOV +7.60%
Laggards: MLP -3.11% REDW -3.08% WLFC -2.31% UMH -1.83%

Sector News, M&A, Capital Raises

 

07:27 EDR Education Realty Trust initiated neutral at Hilliard Lyons ($7.11) Talk To Us Send To A Friend Add EDR to portfolio

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Financial: REIT
07:25 ACC American Campus initiated neutral at Hilliard Lyons ($30.59) Talk To Us Send To A Friend Add ACC to portfolio
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Financial: REIT
06:22 CCG Campus Crest Communities files amended S-11; increases size of IPO and changes underwriters Talk To Us Send To A Friend Add CCG to portfolio
IPO size is increased to $488.75M from $385.3M. The lead underwriters are not Raymond James, Citi, Goldman, Sachs & Co. and RBC Capital Markets. The previous filing listed KeyBanc as one of the lead underwriters rather than RBC. The IPO was initially filed on 14-May-10. Proposed symbol on the NYSE is CCG.
Related StreetAccount comments: 7/16/2010
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Financial: REIT
02:45 PSPN.SW PSP Swiss Property AG downgraded to underperform from neutral at Exane BNP Paribas Talk To Us Send To A Friend Add PSPN.SW to portfolio
- SA London
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Financial: REIT
01:31 FABG.SS Fabege upgraded to outperform from neutral at Carnegie Securities Talk To Us Send To A Friend Add FABG.SS to portfolio
- SA London
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Financial: REIT
16:03 HT Hersha Hospitality acquires Hampton Inn, Washington, DC ($4.86) Talk To Us Send To A Friend Add HT to portfolio
HT announced that it has purchased the 228 room Hampton Inn, Washington, D.C. for approximately $73.0M, or $320,000 per key excluding closing costs. The purchase price of $73.0M represents a forward capitalization rate of approximately 8.3% on the hotel's projected 2011 net operating income, and an unlevered IRR of approximately 11.7%. Hersha funded the purchase with cash and a draw on its revolving credit facility.

o   HOV Hovnanian reports Q3 EPS

o   Fannie Holds Line on Servicer Delays of Foreclosures from American Banker

o   Fannie Mae wants out of its defaulted residential mortgage holdings as quickly as possible and is warning loan servicers not to stand in its way.


Cantor Flows

CBG, CDR, DTG, GOV, HOV, HTZ, KIM, KRC, LALLF, LSE, LVS, MAA, MAC, MAR, MDC, MINI, MPEL, O, PCC, PPS, ROIC, RYL, SIX, URI, WYNN 


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