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Washington REIT: 5.6% Yield And Banking On The Nation's Capital

Published Wed, 23 Dec 2020 07:01:48 -0500 on Seeking Alpha

Seeking AlphaREITsWashington REIT: 5.6% Yield And Banking On The Nation's CapitalDec. 23, 2020 7:01 AM ET|| About: Washington Real Estate Investment Trust (WRE)by: Gen AlphaGen Alpha Long Only, Value, Growth, Growth At Reasonable PriceSummaryWashington REIT continues to experience headwinds in the current environment.
However, I see a light at the end of the tunnel, and WRE could benefit from increasing tech company presence in the area.
I find the shares to be reasonably valued, and the 5.6% dividend yield to be safe.
Value is getting harder to come by in the overall expensive market. Judging by the performance of the S&P 500 (SPY), with a 14% return since the start of the year, it almost seems as if the market has been emboldened by the massive amount of government stimulus measures that have been introduced this year. However, I do see pockets of value in the market, with Washington REIT (WRE) being one of them. While it continues to experience headwinds in the current environment, I do see a light at the end of the tunnel. In this article, I evaluate what makes WRE a buy at present, so let’s get started.

(Source: Company website)
A Look Into WRE
Washington REIT is a diversified real estate landlord that focuses on owning and acquiring properties in the Washington D.C. metro area. As of October, 2020, WRE’s portfolio consists of 45 properties, of which 22 are multifamily properties, 15 office properties, and 8 retail centers. In 2019, WRE generated $309M of total revenue. As seen below, half of WRE’s NOI comes from multifamily, 44% from office, and 6% from retail. The majority (80%) of the multifamily properties are in Northern Virginia, and the commercial properties are about evenly split, between Northern VA and D.C., with 6% exposure in Maryland.

(Source: Q3’20 Investor Presentation)
Washington REIT has experienced a number of headwinds in the current economic climate. This is demonstrated by the Q3’20 Core... Read more