Deutsche Bank's Weekly REIT Trader

Deutsche Bank spent some time reviewing companies in the REIT market to discover some significant outperformance. Here is a performance recap of several of those companies: Kilroy Realty Corporation KRC 2010 bonus programs show performance metrics that will exclude the impact of acquisitions made during the year. The company will continue to look for ways to better align shareholder and management interests while developing its 2011 compensation plans. DB feels that this announcement is welcome and is helping to address key on-going investor concerns. Digital Realty Trust DLR DLR announced this week that it will acquire two data centers for $50.3M and have already been 100% leased to major telecom companies. This announcement coincides with guidance hat called for an additional $50M in acquisitions for 2H10. DB estimates roughly $0.04/share of annual FFO to be earned from the deals which has already been accounted for in published estimates. Vornado Realty Trust VNO New York City Council approved plans on 8/25 for VNO's 67-story tower at 15 Penn Plaza. The building has been criticized for its proximity to the Empire State building and its effect on the city skyline. However, the project was approved with only one nay vote and is expected to create 6,000 construction jobs. The actual timing for the project has not been determind. Kimco Realty Corporation KIM KIM issued on Thursday $300M in medium-term notes that will maturing in February 2018 with a yield of 4.356% which KIM will use the proceeds to repay a $100M 5.304% note due in February 2011 and a $150M 7.95% note due April 2011. Prepayment costs are expected to be between $10-12M or $0.03/share. KIM's 2010 FFO/share guidance is unchanged. Equity Residential EQR Invesco Real Estate US acquired the 325-acre Metropolitan at Pentagon City for $125M, located in Arlington, VA. Last October, EQR purchased the sister building (Metropolitan at Pentagon Row) for $100M. Apartment Investment and Management Co. AIV DB spent last Tuesday with AIV management touring its properties (6 total, 5 conventional + 1 affordable) in the Philadelphia portfolio. Conventional properties were in good shape, with numerous amenities and well-executed redevelopments, and impressive, knowledgeable on-site staff. As a result, daily occupancies average above 95% and rents average 26% above market. DB believes AIV is well positioned in the Philadelphia area with quality assets and sound locations.