Meetings With REIT Management Teams At REIT Week (Part 2/3)
I recently attended REIT Week in NYC, the biggest annual REIT conference in the world, where I participated in roundtable discussions with a number of REIT management teams.
In Part 1, I shared my main takeaways from my meetings with NNN REIT, Prologis, First Industrial, Invitation Homes, and Rexford Industrial.
Today, in Part 2, I will cover four more REITs:
Rayonier
AH Realty Trust
Realty Income
EPR Properties
As before, I will focus on the unique insights that I gained from the management discussions, rather than repeating generalities about these companies.
Rayonier (RYN)
Rayonier’s main message was that its stock trades at a sizable discount to private market values. Management noted that the company is currently valued at about $1,850 per acre, while high-quality timberland can trade at up to $3,000 per acre in the private market.
Rayonier believes that its portfolio is above average, which would imply that the discount to private market value is significant.
Because of this discount, the company has been actively buying back shares. In Q1, it only bought back about $31 million of stock, but this was partly because it was restricted by blackout periods related to its pending merger and earnings release. This seems to imply that Rayonier may become more active with buybacks going into Q2.
Management also emphasized its commitment to maintaining a conservative balance sheet. Debt to EBITDA is about 3x based on mid-cycle earnings, which they view as conservative. The main takeaway is that Rayonier believes the public market is valuing its timberland at a large discount to private market values, and it is using buybacks to take advantage of this gap.
