Zacks Analyst Interview Highlights: Mid-America Apartment Communities, Prologis and Newcastle Investment Corp

Business Wire, April 19, 2007

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Greg Sukenik, who discusses Mid-America Apartment Communities (NYSE: MAA), Prologis (NYSE: PLD) and Newcastle Investment Corp. (NYSE: NCT).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

Which REIT sectors do you recommend in 2007? Do you have any specific recommendations on which companies to buy?

We still like apartments in 2007. Apartment REITs continue to report good results. We haven't reached the bottom of the housing market, and more people are opting to sit on the sidelines and rent instead of buying. This will help apartment REITs in the next 12 months. We prefer some of the smaller apartment REITs where valuations are still modest.

Operationally, many 2nd-tier apartment markets are performing very well. One name we have a buy on is Mid-America Apartment Communities (NYSE: MAA), an apartment REIT that has a concentration of assets in the Southeastern U.S. The company pays an above-average yield, exceeded our 2006 estimates, and still represents a good value compared to many peers.

We also like industrial-focused companies that own in the best markets. Overall industrial absorption continues to increase as global trade is expanding at a torrid pace. We like industrial companies that have a strong presence in U.S. gateway markets, as well as a growing international operating platform. Many emerging Asian countries offer much better growth prospects than the U.S. We like Prologis (NYSE: PLD), the largest U.S. industrial REIT. The company performed well in 2006, has a growing international presence, and operations should improve as the company turns its large development pipeline into profits.

We have a Buy of Newcastle Investment Corp. (NYSE: NCT), a mortgage-focused REIT that issues and manages investments in mortgage backed assets and securitizes real estate debt. NCT pays a good yield and a majority of the company's debt is commercial investment grade, or good credit. Newcastle has traded off recently due to the sub-prime mess, although the dividend appears safe as operations are still good. While the company's current exposure to sub-prime residential is low, NCT is looking at purchasing $1.7 billion in sub-prime loans, which could be a good value in today's environment.

Read the full interview at http://at.zacks.com/?id=2647.

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