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The 2014 All-America Research Team: REITs, No. 2: Michael Bilerman & team
Total appearances: 20
Team debut: 1973
Citi’s 11-member troupe notches its fifth consecutive second-place finish under the direction ofMichael Bilerman, who one money manager reports “is seen as an industry thought leader.” The group also wins many plaudits for its Citi Global Property CEO Conference, which convenes each March in Florida. The event is “by far, the best REIT conference in the industry,” according to one attendee. Bilerman explains that a company is allowed to participate only if its chief executive officer is present, a requirement that has “solidified the investor base.” He and his colleagues are sanguine on the future for U.S. real estate investment trusts, which outperformed the nation’s broad market by 5.8 percent points year to date through mid-September, rising 13.1 percent. The crew chief ticks off an impressive list of reasons for their optimism: “Operating fundamentals remain solid. Supply is low. Capital is widely available at historically low costs. [Capitalization] rates are compressing as global capital chases real estate. REIT dividend yields remain relatively attractive, with low payout ratios,” he says, and “funds flow to the space is positive.” He also notes that management teams have planted the seeds for future growth via redevelopment, development and accretive refinancings. The researchers’ top picks include large-cap blue chips like Massachusetts-based Boston Properties, an office property developer; and Indianapolis’s Simon Property Group, which focuses on shopping mall properties. These REITs boast attractive internal growth profiles, external expansion potential, strong balance sheets and experienced executive leadership.