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Published on Jul 28, 2016
Shares
of Hudson Pacific Properties are up an impressive 16% thus far in 2016,
but the California-based REIT is not done being golden, said Mark
Halle, senior portfolio manager of the Prudential Global Real Estate
Fund . 'They really cater to the technology and telecom market in L.A.,
Seattle and San Francisco,' said Halle. 'They have a well-seasoned
management team and an excellent balance sheet.' Halle added that
Hudson's portfolio is 90% leased with rents way below market prices. As
these rents roll over, Halle said Hudson will see '10% to 15% upticks in
its rental portfolio.' The Prudential Global Real Estate Fund is up
7.7% thus far in 2016, according to Morningstar. The $3.5 billion fund
has returned an average of 3.7% annually over the past ten years,
outpacing 60% percent of its rivals in Morningstar's global real estate
category. The trailing 12 month yield for the fund is 1.4%, according to
Morningstar. General Growth Properties , up 16%, is another one of
Halle's top picks. And while many mall-owners are struggling, especially
as anchor tenants fall by the wayside, Halle said General Growth's
portfolio will continue to shine because of its high quality tenants.
'They have good assets in good markets and they have done an excellent
job in taking back space from some big anchors and releasing it at
higher rates,' said Halle. Staying in the retail REIT arena, Halle said
Federal Realty , up 13.5% year-to-date, will continue to shine because
of the embedded value in its portfolio. 'You are buying today for the
next three years projects which are coming online which are virtually
not reflected in the stock price today,' said Halle. Finally, Halle is a
fan of Sun Communities , up 13% year-to-date, saying the manufactured
housing community player is a great place to be as baby boomers age.
'The average tenure of people on these sites is about 13 years, you
can't pick up your home and move it easily, it costs about $10,000 so
people stay and they have great rental growth,' said Halle.
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