Wary investors embrace bricks and mortar
Massachusetts real estate companies are taking advantage of the glowing reputation bricks and mortar now have as investments.
Interest rates remain low, making the financing of acquisitions easier. And choppy stock and bond markets are helping to make real estate look like a greener pasture.
The results are clear: Six publicly traded Massachusetts real estate companies -- including Boston Properties Inc., owner of the Prudential Center, and HRPT Properties Trust of Newton and its two spinoff companies -- are among the Globe 100 for 2004.
None of them did anything substantially different from what they've been doing the last few years, executives said. Many followed the same basic mantra heard on Wall Street: Buy low, sell high. These companies concentrated on adding to their portfolios when they discovered value, and selling in a very hot market when the offers were too good to refuse.
''Last year was a hard time for any real estate company to grow earnings," said Edward H. Linde, chief executive of Boston Properties, whose $1.4 billion in revenue was more than double any Bay State rival's. But Linde said Boston Properties managed to achieve total return for investors of over 16 percent by ''being at the high end of the quality spectrum, being very selective in markets we operate in" within six Eastern states.
HRPT Properties, Hospitality Properties Trust, and Senior Housing Properties Trust -- all based in Newton and at one time related companies -- did well, too.
HRPT added 136 office and industrial properties with 8.3 million square feet last year, to bring its total number of holdings to 375 and 44.1 million square feet. That helped boost revenue 18 percent, said president John A. Mannix.
''A large part of our growth is external, through acquisitions," Mannix said. He said 2004 was ''a good year," even though prices were sky-high. HRPT, which is in 30 states, looked at and bid on about 500 properties, to win 136.
Hospitality Properties, which owns 298 hotel properties, did well by being in a recovering sector, as business travel improved in 2004 after a dramatic falloff following the 2001 terrorist attacks.
''Occupancy started picking up weekdays, and it got everybody's blood flowing," said John G. Murray, president.
As it does in so many other industries, serving aging baby boomers makes for good business in real estate. Senior Housing Properties acquired 31 more senior-care properties from a private owner last year to increase its portfolio to about 180.
''That's probably the main reason" revenue increased more than 12 percent last year, said chief operating officer David J. Hegarty.
Thomas C. Palmer Jr. can be reached at tpalmer@globe.com.
