Once again, CommonWealth REIT (NYSE:CWH) is trading at a discount to the value of its assets, which are worth $32.86 per share, so currently the firm is trading at a P/B ratio of 0.7. Moreover, the REIT currently offers investors a 4.3% dividend yield that was easily covered three times by operating cash flow in the fourth quarter of 2012 and 1.3 times by operating cash flow in the first quarter of this year.
Overall, CommonWealth REIT (NYSE:CWH) presents a decent value opportunity with a well-covered dividend payout, low valuation in relation to its peers and trading at a discount to its book value.
Lastly, Brookfield Office Properties Inc (USA) (NYSE:BPO), which is in the market for premium property. The company has recently closed on the acquisition of a second tranche of London properties, purchased from one of the largest REITs in England, Hammerson plc (LON:HMSO). Brookfield’s London properties are in the center of the city, which is well known for high rents and high prices. This takes Brookfield’s assets in the city of London to four office buildings, totaling 800,000 square feet.
The company also owns two million square feet of development density in England’s capital. One of the more appealing aspects of Brookfield is its property management arm, which is much more lucrative than traditional REIT operations as there is no need for such a high level of debt and interest costs.
Like the two companies above, Brookfield is trading below the value of its assets, which are worth around $20.30 per share. However, the firms EPS are expected to drop by 50% this year, which puts the company at a forward P/E ratio of 16 – more expensive than the two above but still cheaper than the average of its ten largest peers, which trade at an average P/E of 19.
All in all, the REIT index may be falling but this has now put some companies on sale with their market capitalization now being well below the value of their assets. The best company for investment in this list looks to be Chambers Street Properties (NYSE:CSG), as the company came to market at a very bad time and the sell-off looks to be overdone.
The article These REITs Are on Special Offer originally appeared on Fool.com and is written by Rupert Hargreaves.
Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Rupert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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