This is the most comprehensive and up to date Office REIT directory on the web; prices and yields are updated daily at the close. The list is organized by alphabet in ascending order. The list contains working links to the home page of each REIT, and links to Yahoo news. Links to additional REIT lists by property type can be found below the table.

OFFICE REIT LIST Prices & Yields Updated Daily at the Close
REIT Name	Last Price	Change	Yield	News
Alexandria Real Estate Equities	$5.25	+0.21	13.00%	ARE
Biomed Realty Trust	$5.25	+0.21	13.00%	BMR
Brandywine Realty Trust	$5.25	+0.21	13.00%	BDN
Boston Properties	$5.25	+0.21	13.00%	BXP
Corporate Office Properties Trust	$5.25	+0.21	13.00%	OFC
Franklin Street Properties	$5.25	+0.21	13.00%	FSP
Govenment Properties Income Trust	$5.25	+0.21	13.00%	GOV
HRPT Properties Trust	$5.25	+0.21	13.00%	HRP
Hudson Pacific Properties	$5.25	+0.21	13.00%	HPP
Mack-Cali Realty Corp	$5.25	+0.21	13.00%	CLI
Maguire Properties	$5.25	+0.21	13.00%	MPG
Mission West Properties Trust	$5.25	+0.21	13.00%	MSW
Pacific Office Properties	$5.25	+0.21	13.00%	PCE
Parkway Properties	$5.25	+0.21	13.00%	PKY
Piedmont Office REIT	$5.25	+0.21	13.00%	PDM
PS Business Parks	$5.25	+0.21	13.00%	PSB
SL Green Realty Corp	$5.25	+0.21	13.00%	SLG

See also REIT Definition. Scroll down for more REIT and real estate related news, resources and links.

Click here for a list of Apartment REITs
Click here for a list of Healthcare REITs
Click here for a list of Hotel REITs
Click here for a list of Industrial REITs
Click here for a list of Mortgage REITs
Click here for a list of Non-Traded REITs
Click here for a list of Retail REITs
Click here for a list of Storage REITs
Click here for a list of all REITs
Click here for a list of REITs paying dividends in stock
Click here for a REIT ETF list
Click here for a list of REIT Funds

Information on how REITs work can be found in the post REIT Definition.

JP Morgan analyst Anthony Paolone is understandably not bullish on commercial real estate fundamentals, but since the public market is typically ahead of the private market in terms of valuations, he does like certain REITs.

Brandwine in particular has both refinanced existing debt, and repurchased its own debt on the open market (for a quick explanation of the accounting behind debt repurchases, read Muddled REIT Book Values Create Opportunity). The ability to delever in this market is obviously muy bueno, even though Brandywine also diluted shareholders to death in the process.

Paolone also thinks (BDN) will pay a special dividend in Q4. Be aware of the fact that JP Morgan was joint lead underwriter on BDN’s very dilutive equity offering, so do look carefully beneath the hood before plunging in.

Enjoy the vid!

Maguire Properties (MPG), the Office REIT that bought 24 office properties and 11 development sites from Blackstone for $2.88 billion at the height of the market, just got a market read on its Orange County holdings. According to the Wall Street Journal, Emmes Holdings in New York recently agreed to buy MPG’s stake in a newly constructed office property in Irvine, Calif., for about $160 million, representing a 40% discount to its construction cost.

Maguire’s heavy concentration in Orange County gives it exposure to the subprime debacle that probably rivals AIG, given that Orange County was subprime central HQ for many mortgage lenders. This exposure is resulting in an epic struggle to dig out from under the debt incurred in that 2007 purchase. Making matters even worse, the FDIC’s grim reapers are out in full force in Orange County, shuttering bank offices and rejecting leases without the customary remedies afforded to landlords under Chapter 11.

I am not a lawyer but I live in San Francisco and like to play dress up every now and then and Federal bankruptcy laws are complex, but in general, Chapter 11 default remedies for owner/lessors of commercial real estate typically allow 60 days for bankrupt lessees to affirm or reject their leases. For those leases that are rejected, the properties are thrown back on the market in search of a new lessee, and the owner/lessor receives an unsecured claim get in line, buddy limited to three year’s worth of rent.

However, The FDIC’s authority to reject leases does not fall under Chapter 11 of the Code, and it is even more draconian. If a lease is rejected by the FDIC as receiver, the owner is simply handed the keys imminent default and the contract is extinguished – with absolutely no claim on the estate of the dearly departed. This obviously makes it tough to pay your friendly banker on the first of every month.

This is exactly what has happened with Quintana, an office property jointly owned by Maguire (20%) and Maquarie Office Trust (80% – ASX: MOF). Maguire announced today that the FDIC has rejected the majority of WAMUs lease at Quintana, which is also in Orange County. According to the press release, the FDIC surprise! is “not obligated to pay any rent or other compensation in connection with the lease termination”.

This brings the occupancy of Quintana to approximately 40%, which is unsustainable in relation to the debt (a now completely underwater $106 million CMBS loan maturing in December 2011). Maguire has commenced discussions with the special servicer, and a deed-in-lieu of foreclosure deal is the most likely outcome. This will probably wipe out all of MGP’s equity in the property.

With respect to the sale of the aforementioned newly-constructed property to the Emmes Group, it’s noteworthy that financing was provided by EuroHypo, itself a struggling lender. But don’t get your hopes up – the loan was not new money. EuroHypo simply allowed Emmes to assume the original construction loan in return for injecting fresh equity.

Until Emmes showed up with its $160 million check, EuroHypo was in about as much distress on this deal as MPG. Last month, Maguire took a $23.5 million first-quarter noncash impairment charge on the property, following a $50 million noncash impairment charge on the same property in prior quarter. EuroHypo’s $165 million construction loan was set to mature in September 2009, but it will now live on (with principal reduced) as term financing for a brand new borrower. And the beat goes on!

The Mortgage Bankers Association has released their quarterly survey of commercial/multi-family loan originations, and it shows continued dramatic deterioration in all CRE lending sectors, including an 80% plunge in bank lending.

Earlier this week, I wrote that commercial real estate transaction volume had declined to practically zero, so it’s no surprise that loan originations would show a concurrent decline, but that decline was precipitous: Q1 loan originations declined to the lowest quarterly level in the 7-year period covered by the survey.

The report is unclear as to which tail is wagging this dog, however. Is the decline in loan volume the result of “suicide-tight” underwriting, or simply a lack of buyers transacting on new deals? Anecdotally, there is a lot of equity sitting patiently on the sidelines at the moment, so it’s likely the latter. In addition to the 80% decline in bank lending, insurance company loan activity declined by 66% and GSE lending dropped by 26%. It was so bad, I decided to paint a picture. the things I do for you

There were some intriguing data in the survey though (read the full report here). One interesting finding is that while all loan activity decreased, industrial loan activity this quarter decreased the least vs. the year ago period, even less than multi-family. In fact, industrial loan activity from Q4 to Q1 actually increased by 67%. With loan capital still flowing into that sector, well capitalized industrial REITs are still relatively healthy.

Indeed, industrial REIT yields are among the lowest in the sector. This should enable industrial REITs to recover more quickly. Unfortunately, that is small comfort to those who lost their shirts betting on the likes of Pro-Logis (PLD). It’s also a sign of hope around increased economic activity, and probably of inflation as well…

Not surprising is that Fannie Mae and Freddie Mac continue to be practically the only game town for apartment lending, which declined by 61% in the quarter from one year ago. Hotel loans were down a whopping 88%, followed by healthcare (down 80%), retail (down 76%) and office lending (down 66%). Aside from the good news for industrial REITs, the only other obvious silver lining is that the rate of decrease in activity has slowed. So things aren’t getting much worse, but it’s still awfully hard to see anything even remotely shaped like a “V” on the horizon.

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REIT earnings season got into full swing last week, but there’s a lot more on investor’s minds these days that last quarter’s earnings. Transaction volume has continued to plunge, and CMBS loans placed in special servicing have continued to rise like a poodle in a jetpack.

This can mean only one thing, and in the words David Hamamoto, CEO of Northstar Realty Finance (NRF), it is that there is a growing backlog of motivated sellers who “will begin to transact later this year and who will establish market pricing as deals are completed.” That people will need to sell is not in dispute, but exactly what “market pricing” will be is the $64,000 question.

Globally, commercial real estate sales plummeted more than 70 percent in the first quarter from the end of 2008, according to Real Capital Analytics. In the United States, first quarter sales were not only anemic, they may also be a form of karmic justice to CRE brokers who are now fond of saying that distressed buyers simply “overleveraged”. Really?

Even apartments, which still enjoy the availability of buyer financing from Fannie Mae and Freddie Mac, saw transaction volume fall 62 percent in 2008, and another 86 percent in the first quarter of 2009 alone. With an average of only 50 apartment sales taking place each month across the entire country, it’s simply no wonder that pricing is unclear.

What is clear, however, is that prices are dropping. And as prices drop, “overleveraged” buyers, or those who were basically convinced to overpay for their assets, are unable to refinance their loans. CMBS loans placed in “special servicing”, which indicates that the borrower is in some form of distress, were dramatically up and to the right at the end of 2008:

That trend accelerated in the first quarter of 2009. CMBS loans in special servicing jumped another 48 percent (as measured by outstanding loan balance), according to Fitch. “Imminent default” was cited as the reason for 73 percent of the special-servicing transfers. Since the end of 2007, the percentage of CMBS loans in special servicing has grown from 0.54 percent to almost 3 percent or outstanding loans.

Nationally, default and delinquency rates for CMBS rose to 1.76%, or $10.7 billion, in the first quarter, up 62 basis points from the previous quarter and more than triple the rate of delinquencies recorded in Q1 2008 (these figures do not include loans associated with the bankruptcy of General Growth Properties). According to REIS Inc., the CMBS default rate could reach 6% by year’s end.

The lack of transaction volume and the increasing levels of distress perfectly illustrate the current market quandary: lenders are unwilling to foreclose on properties that cover debt service, albeit barely, and sellers are unwilling to sell properties at what they believe to be artificially low prices driven by unsustainably low availability of debt capital.

This face-off will not last. Banks must clear their balance sheets at the same time that capitalization rates are rising and NOI is dropping. Rising cap rates mean that a buyer of an office building at a 6 cap in a strong market like Washington D.C. is staring at a 30% decline in value, peak to trough, assuming NOI has remained the same (which is almost certainly not the case). Buyers in tertiary markets are in even worse shape.

However, just as the excess of ready and available credit led to unsustainably high asset values in 2005-2007, so will the dearth of ready and available credit lead to unsustainably low asset values in 2010. Not surprisingly, some investors smell opportunity, and they are betting with real money. Publicly traded REITs raised $10.6 billion in equity in the first quarter, including $6.51 billion in April alone. This is a tidal wave of cash, and the Bloomberg REIT stock index rose by 30%. Nobody ever rings a bell at the bottom of a market, and $10.6 billion says why bother to listen for it now?

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Just two weeks ago, I speculated about REIT capital shortages and the ability of non-traded REIT equity to fill the gap in the post Averting Massive Sector Wide REIT Defaults: Non-Traded Equity May Be Part of the Answer.

Pacific Office Properties Trust (PCE) had just disclosed their intention to raise $350 million through this market, and now NorthStar Realty Finance Corp. (NRF) is following suit with intentions to raise up to $1.1 billion in non-traded REIT equity. Whether NRF actually intends to raise this much in this market is uncertain. Offering $1.1 billion in non-traded REIT equity would be an absolutely huge undertaking, as it represents more than 10% of the market’s entire 2008 initial offering volume.

NRF remains one of my favorite Mortgage REITs, but the market has been just as unkind to NRF as it has to most other REIT stocks. The stock is down almost 70% since NRF’s chairman David Hammamoto bought a bunch of stock on the open market at $8.26/share only months ago. Management owns a significant amount of stock, so it’s no wonder they are pursuing cost-effective ways to recapitalize their balance sheet.

NRF and PCE are two of the only publicly traded Real Estate Investment Trusts to tap this market, but they are only the latest in a growing list of entities accessing this market. But do yourself a favor and don’t even think of buying a non-traded REIT. In just the first three months of the year, five companies have launched efforts to raise $7.2 billion of equity through non-traded REITs. By comparison, $9.6 billion of equity was raised in this market in all of 2008.

For Northstar, a non-traded REIT offering is an incredibly cheap source of equity capital. NRF intends to raise the equity through a new entity, so existing shareholders in NRF common will not be diluted. The new NRF non-traded REIT intends to pay its investors an annual REIT dividend of 8 percent, which would be higher than the 5-7 percent typically paid by non-traded REITs and far better terms on equity than what NRF could get elsewhere.

While the offering is undoubtedly very attractive to NRF with respect to the scant alternatives available, it remains to be seen how well shareholders in the new entity will fare. Investors will pay fees of as much as 7 percent to cover the cost of selling commissions; a 3 percent dealer-manager fee, and 3 percent to cover the costs of organizing the entity. Accordingly, only 87 percent of every dollar raised will actually go toward investing in mortgages.

NorthStar’s aim is to execute what it termed a “liquidity transaction” within five years of raising the capital. That could be a sale of assets, merger or listing on a stock exchange. Historical non-traded REIT returns are hard to quantify, because so few have executed their so-called liquidity events. Given how cheap this capital is, it’s no wonder.

Disclosures: Long NRF at the time of publication
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By now the REIT story is a familiar one. They face a weakening economy, decreasing rents, lower occupancy, great difficulty refinancing old debt and even more difficulty raising new capital of almost any sort. The JP Morgan analyst in this video interview sees at least 5% more downside from here.

However, he does like at least one REIT: Boston Properties (BXP). Boston Properties is primarily an office REIT (see the office REIT list for a list of office REITs, including current yields). The analyst likes BXP Management and believes they have the highest quality portfolio in the group. If the video below does not load, you can view it here.

Click here for a list of Office REITs, including current yields

Click here for a list of REITs paying dividends in stock

Information on how REITs work can be found in the post REIT Definition.

Disclosures: None at the time of publication
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Broadway Partners, the heavily indebted private equity firm that purchased Boston’s landmark Hancock Tower at the top of the market in 2006 defaulted on a key loan payment last week. The iconic office building is a trophy property in the heart of Boston’s Back Bay district. The real estate fund manager purchased the property for $1.3 billion from Beacon Capital Partners, but the office tower now appears to be headed toward foreclosure.

Defunct Lehman Brothers, described a few months ago by the New York Times as a “real estate ATM” arranged a $472 million mezzanine loan to help fund the acquisition, behind Royal Bank of Scotland’s first mortgage in the amount of $640 million. The RBS loan was arranged by its real estate affiliate, Greenwich Capital Markets. The Boston Globe reported earlier that the property was worth no more than $1 billion, according a local real estate executive with access to the numbers.

Of course, the Lehman and RBS loans were both short-term variable rate deals based on “pro-forma rent” and occupancy levels. With the tower about to report a 15% vacancy rate this month, it’s unlikely that it came even close to meeting the original rent growth assumptions in the pro forma, and rents are likely to keep going down, not up.

The building is the tallest tower in New England and also features a 2,000 stall parking garage. Betwen 2002 and 2007, Broadway Partners spent more than $13 billion buying up trophy office towers across the country, including large trophy assets in New York and San Francisco.

The firm’s founder got his start in 2000, with the purchase of an old school building in Hartsdale, New York for less than $5 million, which is basically the real estate equivalent of buying penny stocks. But his luck has now run out, and he and his firm are racing to sell whatever assets they can while they still can. The firm’s deal to sell a San Francisco office tower has been stalled since May of 2008, and it now looks unlikely to close at all unless accompanied by the sound of a gavel.

According to the Boston Herald, Broadway Partners issued a statement yesterday in an attempt to calm the nerves of its institutional investors, all of whom look increasingly likely to take a big haircut on the relationship:

“Despite difficult market conditions, we continue to work hard with our lenders and partners to address debt obligations,” the statement read. “In the meantime, Broadway Partners continues to operate great buildings with high service standards.”

Under the terms of Broadway’s mortgage, a default gives Greenwich the right to potentially sell the Hancock Tower, auction it off or take over the building’s management and rental income. Given the rapidly weakening economy, neither option is likely to result in full recovery. For a more background on why, click on the post relating to commercial real estate values in this market. As a consequence of those economics and the bloodletting that needs to occur, Moody’s sees no bottom in commercial real estate until 2010.

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