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Author: earslookin Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 77698  
Subject: Re: REIT Preferreds= Hotel California Date: 2/9/2013 9:38 AM
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Recommendations: 19
Yoda, excellent post, thank you! I had no idea there was a Hotel California on Dagobah.

Some observations:

1) When you say three types of REIT Preferred holders, I assume you mean among retail investors. For retail investors, I would add two more types -- (a) small traders who are not interested in the dividend income and who understand very well the spreads and who trade in and out on temporary mispricings, and (b) investors interested only in income who understand YTC and who don't care in the least what happens to interest rates because they will hold until called. I am not either of these types, and am not judging whether these approaches are good or bad, but have seen a few posts on this board that represent these types.

2) Liquidity is a cost that can be priced in to an expected series of cash flows in terms of the discount. In his book on risk, Aswath Damodaran mentions a study that found that yield increases .21% for every 1% increase in transaction costs (primarily the liquidity costs of spread, price impact, and opportunity cost of trading, which eclipsed the commission cost) for investment grade bonds, while it increases .82% for every 1% for speculative bonds.

3) Looking at volumes over a 30 day period gives another perspective of REIT Preferred liquidity. Below is a table of equity REIT Preferreds with Min, Max, Median, and Average volume for the last 30 days. Of note are issues that have tiny median volumes but have days here and there with relatively huge volumes -- for example, HCNPrI, EXLPrB, HPPPrB, PLDGP, and so on.

Ticker Name Min 30 Days Max 30 Days Med 30 Days Avg 30 Days
------ ----------------------------------- ----------- ----------- ----------- -----------
PSA-V Public Storage Series V 23,900 117,200 59,800 57,703
KIM-K Kimco Realty Corp. Series K 18,600 176,600 50,950 58,570
PSB-U PS Business Parks Series U 15,500 84,900 37,050 40,413
PSA-T Public Storage Series T 17,300 103,900 35,450 44,620
KIM-J Kimco Realty Corp. Series J 14,000 69,100 31,550 34,447
EPR-F Entertainment Prptys. Series F 5,900 96,500 28,800 33,093
COR-A Coresite Series A 9,900 297,500 26,250 40,797
VNO-K Vornado Realty Trust Series K 16,400 216,300 25,700 33,890
PSA-S Public Storage Series S 10,900 61,300 24,850 27,483
SLG-I SL Green Realty Series I 7,500 49,400 23,800 24,350
KIM-I Kimco Realty Corp. Series I 6,900 127,600 22,250 32,870
PSA-R Public Storage Series R 8,300 63,000 20,000 22,433
PSB-T PS Business Parks Series T 5,900 72,200 18,300 22,627
NNN-D National Retail Property Series D 4,100 84,700 18,300 22,230
CDR-B Cedar Shopping Centers Series B 2,800 89,900 17,600 23,113
PSA-Q Public Storage Series Q 7,300 130,700 17,250 22,777
KRC-H Kilroy Realty Series H 4,000 160,600 16,650 31,583
PSA-U Public Storage Series U 7,700 53,000 16,050 18,177
O-F Realty Income Corp. Series F 4,700 113,900 15,900 20,950
TCO-J Taubman Centers Series J 2,700 118,500 14,750 22,407
HCN-I Health Care REIT Series I 2,300 780,900 14,750 61,037
HPT-D Hospitality Property Series D 4,800 55,000 14,250 19,530
HCN-J Health Care REIT Series J 5,900 39,800 14,000 15,387
CBL-E CBL & Associates Pptys. Series E 1,700 96,700 11,750 18,520
CWH-E Commonwealth REIT Series E 3,400 30,900 11,050 11,523
PEI-B Pennsylvania REIT Series B 2,600 34,900 10,650 12,797
DDR-J Developers Diversified Realty Serie 1,300 190,100 10,650 23,290
DLR-E Digital Realty Trust Series E 3,100 22,900 10,000 11,687
OFC-L Corporate Office Pptys. Series L 2,000 115,200 10,000 20,540
KIM-H Kimco Realty Corp. Series H 1,600 25,400 8,800 9,417
VNO-J Vornado Realty Trust Series J 3,400 214,200 8,500 20,510
REG-F Regency Centers Series F 2,600 109,000 8,450 12,083
PSB-S PS Business Parks Series S 1,600 268,500 8,400 26,913
FUR-D Winthrop Realty Trust Series D 1,400 51,000 8,350 9,890
PSA-P Public Storage Series P 3,100 62,300 8,000 12,690
DLR-F Digital Realty Trust Series F 1,400 34,200 7,750 8,687
PSA-O Public Storage Series O 1,400 86,900 7,200 11,617
UBP-F Urstadt Biddle Series F 800 220,800 7,050 18,217
SUI-A Sun Communities 100 27,000 6,550 8,177
INN-B Summit Hotel Properties, Series B 1,500 72,800 6,300 11,387
AHT-E Ashford Hospitality Series E 100 42,200 5,950 7,830
IRET-B Investors Real Estate Trust Series 700 16,500 5,400 6,133
DFT-B DuPont Fabros Tech. Series B 1,000 20,900 5,050 6,150
KRC-G Kilroy Realty Series G 800 15,300 5,050 5,967
CHSP-A Chesapeake Lodging Trust Series A 400 66,300 4,600 11,920
FPO-A First Potomac Series A 500 43,800 4,050 6,377
DFT-A DuPont Fabros Tech. Series A 1,300 29,900 3,700 5,180
EXL-B Excel Trust Series B 400 413,200 3,600 17,573
PEI-A Pennsylvania REIT Series A 400 24,900 3,600 5,007
ARE-E Alexandria Real Estate Series E 300 92,100 3,200 7,487
BDN-E Brandywine Realty Series E 100 11,900 3,100 3,953
ELS-C Equity Lifestyle Series C 300 200,800 2,950 17,050
GRT-H Glimcher Realty Trust Series H 100 82,400 2,750 7,443
REG-G Regency Centers Series G 100 165,000 2,600 10,367
KRG-A Kite Realty Group Series A 300 6,300 2,450 2,370
PEB-B Pebblebrook Hotels Series B 400 179,300 2,350 10,890
RPT-D Ramco-Gershenson Series D 200 73,900 2,050 7,933
HT-B Hersha Hospitality Trust Series B 200 14,300 2,000 3,117
PSB-R PS Business Parks Series R 200 52,800 1,900 4,153
MNR-B Monmouth REIT, Series B 500 13,000 1,850 3,037
INN-A Summit Hotel Properties, Series A 300 10,800 1,850 3,000
LHO-H LaSalle Hotel Ppts Series H 100 8,100 1,800 2,120
SHO-D Sunstone Hotel Investors, Series D 100 193,500 1,750 9,900
CUBE-A CubeSmart Series A 200 13,200 1,650 2,693
UMH-A UMH Properties Series A 300 8,500 1,600 2,313
CCG-A Campus Crest Communities Series A 100 11,700 1,550 1,987
HPP-B Hudson Pacific Prop Series B 100 646,900 1,500 40,350
IRC-A Inland Real Estate Corp. Series A 100 9,800 1,450 2,497
PEB-A Pebblebrook Hotels Series A 200 6,100 1,250 1,773
GOODN Gladstone Commerical Series C 200 3,800 1,250 1,320
STAG-A STAG Industrial Series A 100 14,600 1,200 2,573
LSE-B CapLease Series B 200 8,900 1,200 2,003
AIV-Z Apt. Inv & Mgmt. Co. Series Z 100 3,300 1,150 1,327
ESS-H Essex Property Trust Series H 100 32,600 950 3,440
TRNO-A Terreno Realty Series A 100 7,300 700 1,373
PPS-A Post Properties Series A 100 4,600 650 853
SPG-J Simon Property Group Series J 100 8,600 500 973
PLDGP ProLogis Series Q 100 461,800 200 17,933

Thanks,
Ears
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