Archives: May, 2005
Public Real Estate Company Snapshots

. . . More closet room - FirstService Corporation (Nasdaq: FSRV) completed the acquisition of two California Closets franchises, adding $5 million of annualized revenue to its rapidly growing Property Improvement Services division. The company now owns eight California Closets franchises, generating approximately $40 million in annual revenues. The company provides services in a number of areas, including commercial real estate; residential property management; and property improvement.

. . . "Would you like a jet with that loan, sir?" The S.F. office leasing market, which had slumped along with Silicon Valley, is getting tight again. Now lenders are offering extravagant perks to buyers to do business with them . . . According to the Wall Street Journal, Jones Lang LaSalle (NYSE: JLL) expected to reach an agreement to purchase an interest in two properties in San Francisco from Equity Office Properties Trust (NYSE: EOP) which will likely maintain an interest in the two buildings.

. . . Record growth in D.C. - In Q1 of 2005, regional homebuilder Comstock Homebuilding Companies (Nasdaq: CHCI) achieved record growth in every category reported. Compared to the same quarter the previous year, new orders increased 86.4%, new order rose 119.2% and backlog revenue went up 291.0%. One of Comstock's main markets is Washington D.C, which has been the nation's fastest growing job market in terms of total new jobs over the past five years.

. . . "You can't have a crash without oversupply." That was Sam Zell's take on the current real estate situation at a panel discussion at the Milken Institute in Beverly Hills. The theme of supply and demand has been an oft-stated reason why builders believe this real estate boom will continue to have legs. In a recent appearance on Jim Cramer's Mad Money on CNBC, D.R. Horton, chairman of DHI (NYSE: DHI) said that the supply of building lots in key markets such as New Jersey and California has continued to decrease. It is one of the reasons why, he stated, homebuilding was no longer cyclical for companies like his.

The evidence, at least for a company like DHI, is pretty compelling. DHI is on track in fiscal 2005 to reach its 28th consecutive year of record revenues and earnings. Net income for the quarter ended March 31, rose 56% over the previous year, revenue rose 24% and sales-order backlog increased 33% to an all-time record for the company. The company was recently upgraded to Outperform by Friedman Billings and to a Strong Buy by JMP Securities.

.. . . Out with the non-core. In with the core. Ashford Hospitality Trust (NYSE: AHT) completed the sale of three properties it has designated as noncore, including Ramada Inn Hyannis Regency in Hyannis, Massachusetts and the Ramada Inn Warner Robins. The company is currently looking to sell five remaining non-core hotels. Ashford is a REIT focused on investing in the hospitality industry, and expects to redeploy the sale proceeds to higher return investments.

. . . Rental rate growth - Average Rental Rates in Q1 for apartments owned by AvalonBay Communities (NYSE: AVB) increased year-over-year for the first time in three years and increased sequentially for the second consecutive quarter. It was largest increase in established communities rental revenue in three and a half years. AvalonBay is a REIT focusing on apartment communities in high barrier-to-entry markets of the United States. The company was recently upgraded by Smith Barney Citigroup.