Kite Realty Group Trust Analyst Report; In the Fed We Trust, Investing in Kite Realty Group Trust's Equity is the Right Thing to do by BrokerBank Securities, Inc.

NEW YORK, July 21, 2014 /PRNewswire/ -- Kite Realty Group Trust (NYSEMKT: KRG) - Investors of a REIT can expect participation in real estate investment without having to go through the laborious process of financing, purchasing, maintaining, and administering real estate properties.  

A lower interest rate environment fuels more mortgage loan generation.  More mortgage loan generation means more demand on real estate properties.  More demand on real estate properties means more value appreciation on real estate properties.  Hence, a rising interest rate environment can hamper property value appreciation (which is a major source of a successful REIT's total return component).  But, it can also hurt REIT's core operation itself as most of them borrow against properties (as collateral) in order to purchase new properties (as capital expenditure).  Higher interest rates put a brake on this REIT's fundamental business model at least in the short term.  Recent hits in REIT equity in the second half of 2013 during the rising interest rate environment explains REIT's strong dependence on the interest rate environment. 

When considering macroeconomic reasons for investment in REIT equities, it should be observed that they are generally expected to do well for the next 12 months or so.  This is because the Fed made it clear that the current historical low interest rate environment will likely be extended for the next 12 to 18 months. 

Interest rates will be artificially controlled at a lower level and it will safely stay that way.  KRG is well suited to take advantage of this environment.  KRG's stock performance was decent.  Despite negative net income in the past years and a few analysts calling for sell or at best hold in recent months, KRG has strong potential to be very profitable in the near future.  In other words, past sluggish net income can be turned around to be robust net income due to KRG's strong fundamentals.  Not every REIT is positioned that way.

Also the recent merger with Inland Diversified will give KRG a more diversified real estate portfolio.
A full in-depth analyst report on KRG that includes risk factors, industry review, financial position, potential revenues, review of current business model, competition landscape, analyst summary, and recommendation can be viewed by using the following link at no cost:

http://bit.ly/-KRG-AnalystReport

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FORWARD-LOOKING DISCLAIMER   

This report may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward- looking statements by definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of mentioned company to be materially different from the statements made herein.   

COMPLIANCE PROCEDURE   

Content is researched, written and reviewed on a best-effort basis. This document, article or report is written and authored by Ujae Augustine Kang, Chartered Financial Analyst. However, we are only human and are prone to make mistakes. If you notice any errors or omissions, please notify us below. We do not engage in high frequency trading.

A full disclaimer can be found by viewing the full analyst report.

If you wish to have your company covered in more detail by our team, or wish to learn more about our services, please contact us at [email protected]. For any urgent concerns or inquiries please contact us at [email protected].    

BrokerBank Securities, Inc. is a member of the Financial Industry Regulatory Authority, CRD number #130116.

SOURCE BrokerBank Securities, Inc.

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