Public CRE Companies Are Buying Their Own Stock

Welcome to this week’s installment on commercial real estate! Head over to our Youtube channel and take a look at this article from the Wall Street Journal to learn more.

As business people, not just commercial real estate people, we are constantly trying to figure out what the future holds, especially after a year like 2020. With all that disruption in almost every phase of the economy, especially real estate, you want to see what the big players are doing, and the above article really shed some light on that.

Public real estate companies are buying their own stock back. Of course, their stocks have been killed in the market. Most of them have analyzed that the market has gone way too far, and as they value their individual holdings, they’ve found that the stock values, the market capitalization if you will, of the companies are far less than the actual value of their assets. By definition that’s a buying opportunity. If it was just one or maybe two companies it wouldn’t seem like a big deal, but we have a trend, we have a pattern here. Companies like SL Green Realty, Healthcare Trust of America, Brookfield Asset Management, and Brookfield Property Partners, just to name a few that are listed in the WSJ article. We’re sure it spans the sector, because almost every publicly traded real estate owning and operating company was just destroyed.

There’s some real opportunities, maybe for you personally for your own portfolio, but it tells you what they believe about their own future. They’re not selling assets. They’re using their huge cash reserves to buy back their own stock. That just means the people who are still holding, their holdings will be infinitely more valuable once the the stocks return back to a more accurate market capitalization.

We have found this interesting! Ff there’s any way we can help you, let us know.

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