This morning’s earnings call from J.P. Morgan Chase & Co. (NYSE: JPM) echoes some of our concern of what is coming in the next wave of real estate problems which could cause the next wave of economic problems. Commercial real estate. This forecast by Jamie Dimon, along with profit taking in a down-market morning, is acting to hit large-scale commercial property stocks in REITs and in operating companies. These are not the only stocks by any means in these sectors, but our go-to universe includes Boston Properties Inc. (NYSE: BXP), Liberty Property Trust (NYSE: LRY), Corporate Office Properties Trust Inc. (NYSE: OFC), Simon Property Group Inc. (NYSE: SPG), ProLogis (NYSE: PLD), Digital Realty Trust Inc. (NYSE: DLR), AMB Property Corp. (NYSE: AMB), and CB Richard Ellis Group, Inc. (NYSE: CBG). All of these are getting hit this morning. We have provided some detailed information, brief technical analysis, and charts for each below.
Boston Properties Inc. (NYSE: BXP) is a $5.7 billion urban office properties REIT and its shares are down 1.3% at $47.17. The 52-week range is $29.30 to $105.80. This charts is at a critical juncture, or at least will be in a few days when those 50-day and 200-day moving average converge. Shares are also at the top of a near-term trading range. CHART
Liberty Property Trust (NYSE: LRY) is a $2.4 billion diversified industrial and office spaces REIT. Shares are down 1.25% at $22.95 and its 52-week range is $11.83 to $44.62. Its stock is at a critical level as it passed its 50-day moving average yesterday and had been trading between its 50-day and 200-day moving average for most of the last month. CHART
Corporate Office Properties Trust Inc. (NYSE: OFC) is a $1.7 billion operator suburban office properties whose shares are down close to 2% at $29.73, and its 52-week range is $20.39 to $43.50. This one has bounced hard over the last few days and is now back above its 50-day moving average. Prior to that, its 200-day moving average had been acting as support. CHART
Simon Property Group Inc. (NYSE: SPG) is the giant $12.8 billion large-scale mall and retail REIT. Its shares are down over 1% at $50.12 this morning and its 52-week range is $24.27 to $106.43. Where this gets interesting is that it is nested between its 50-day and 200-day moving averages and the 200-day moving average crossed under the 50-day average at the end of June. CHART
ProLogis (NYSE: PLD) is the giant owner of corporate warehouse and office parks worth about $3.4 billion, although that figure may be adjusted after recent refinancings. With shares down 2% at $7.58, its 52-week range is $2.20 to $54.89. Shares are still up considerably in recent days, but this one is still using the 50-day moving average as an overhang and is very far under the 200-day moving average. CHART
Digital Realty Trust Inc. (NYSE: DLR) is a $2.8 billion technology-related real estate operator as a REIT. Its stock is down less than 1% at $37.65 today and its 52-week range is $18.04 to $51.28. This one is actually doing very well oin the charts and is well above its 50-day moving average and even much higher than that above its 200-day moving average. CHART
AMB Property Corp. (NYSE: AMB) is an industrial properties REIT worth close to $2.5 billion. While shares are down over 2%, it is still above the lower-end of a trading range of $16.50 to $18.50 of the last month. But it has also not been able to get back above the 50-day moving average and that 200-day moving average is close to converging over the next week or two. CHART
CB Richard Ellis Group, Inc. (NYSE: CBG) is the large $2.4 billion commercial real estate services firm worldwide. Its shares are down 1.6% at $9.07 and its 52-week range is $2.34 to $21.00. As you will see in its chart, this one has been holding up well for over a month despite the pullback. This is still above the 50-day moving average and is well above the 200-day moving average. CHART
The good news that is in here is that these stocks are all so far under their former glory days that much of the bad data ahead ‘may’ be at least somewhat factored in. We would also note that the concerns are not necessarily new concerns, but they are another reminder that the waves of problems here are still looming rather than being in the rear-view mirror.
As it has been a difficult sell to get the belief that the stock market acts as an effective discounting mechanism, we would still expect some of these to face more downside pressure if and when the problems start to arise later in 2009 on the commercial side. Some have raised substantial cash and that will help to act as a cushion after the waves of REIT stock sales in May and part of June.
All the chart links herein from StockCharts.com show the current prices as well as the 50-day and 200-day moving average.
JON C. OGG
JULY 16, 2009