This is an unusual post that I’m writing. Since last couple of weeks, American Realty Capital Properties, Inc. (ARCP) has been pummeled a lot and it has rebounded also but it’s still close to its 5 years low. I’ve been thinking about it since it started falling since end of October month, a bitching month many says ,when news of accounting issues start pouring out.
ARCP is a real-estate investment trust (REIT) that acquires, owns and operates single-tenant and multi-tenant commercial real estate properties and is world’s largest net lease REIT. It has in total 4,429 properties across 49 states in 94 industries with portfolio occupancy of99.8%, 99.1 million sq footage and total value of $23.8B.
Now, ARCP has dropped so much that its current dividend yield is 11.12% and currently trading at $8.99, closer to its 5 years low of ~$8. I think that current price provides an excellent entry point to investors. As a REIT, it must pay out 90% of its earnings. There are many other (m)REITs that I own: O, NLY, AGNC, OHI, PSEC, and even a REIT ETF from Vanguard: VNQ in my Portfolio, however, I still consider ARCP as a good bet for long-term investors.
Note that ARCP is still not completely out of woods yet and therefore carries a considerable amount of risk, if further issues are uncovered. Also, if the earnings and hence, dividends were to drop precipitously, I would reconsider my decision and might sell.
I’m making a Buffet’esque (BRK.B) move, a bold move for me, to start rolling my snowball faster, and adding another 50 positions on coming Monday.
Full Disclosure – I am long on ARCP.
What are your thoughts about ARCP. Are you going to buy or sell in near future?
Thanks for reading.