Andrew T. Babin, CFA, is a Senior Research Analyst covering real estate — apartments, health care, manufactured housing, single-family rental and student housing — at Robert W. Baird & Co.
Prior to joining Baird in 2014, he was a senior financial analyst at CBRE Clarion Securities for eight years and covered several types of real estate. He also worked at Dwight Asset Management.
Mr. Babin was recognized as a “Rising Star” in Institutional Investor magazine’s 2016 Rising Stars of Wall Street list. He received a B.A. in economics from Middlebury College.
In this 3,862 word interview, exclusively for the Wall Street Transcript, Mr. Babin advises investors to find some high quality, undervalued names in the sector he covers:
“I would say DOC, which is our best idea, Physicians Realty, that’s a name that to us just seems very undervalued given the quality of its portfolio. They’ve drastically improved their investment-grade tenancy.
We think that they get somewhat of a bad rap for having lower on-campus medical office exposure than some of their peers. But given the strength of the systems they do business with, as well as the fact that private capital, international capital, has been very interested in this sector — what we’ve found is that yields in the U.S., while low by our standards, are still higher than they are in other places in the world, and foreign capital still remains very interested.
And so you look at a name like Physicians Realty, that’s only slightly over a $3 billion market cap, trading right around net asset value and at a lower multiple than the other pure-play medical office names.
I think that public-private value dislocation could become closed in a hurry if some of that private interest manifests or if management decides to sell assets and buy back stock. That’s a name that we think there’s a lot of option value on if you really get a big private equity play for medical office. And so they may be more of a value idea.
TWST: So Physicians Realty is your best idea. What would your other top picks among the health care REITs be right now, and why?”
Get the rest of Mr. Babin’s high yielding publicly traded real estate names in this exclusive 3,862 word interview, only in the Wall Street Transcript.
42.7% Average Return For This Doctor’s Portfolio
September 09, 2013