Monday, October 03, 2005

Prentiss is bought

In a post on REITs here I had mentioned that Prentiss Properties (PP) was on my watchlist. They got acquired today by Brandywine Realty for a small premium. Prentiss has been expensive for a while, and hence I had not bought any stock - the measly premium reflected the already high price.

If I had kept my eyes open, I would have noticed Prentiss much earlier!

Along with the recent buyout of Catellus, the 2 major REITs in San Francisco / Bay Area have now been acquired. Overall, the remaining REITs are extremely expensive, with yields at or below 5%. I will not consider them till the yield reaches 11-12%, assuming a similar inflation/interest-rate environment as now.

There are 2 REIT's that still interest me. Both fall into the speculative category. Mission West Properties (MSW) is a Silicon Valley REIT and Digital Realty (DLR) is a REIT focused on data centers. I will be looking to buy a few shares.

I own shares, bought long ago, of REITs like Crescent Real Estate (CEI), HRPT Properties (HRP), BRE Properties (BRE) and Avalon Bay (AVB). I will not be a buyer at current prices, but will be holding onto my shares till a buyout materialises. BRE is also a San Francisco REIT, and likely to find a buyer soon.

I have added Bedford (BED) to my watchlist recently.


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