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This is a big week for the markets, and I think it will set up a December to remember. With the Consumer Price Index print for November set to come out tomorrow and the Fed making its next decision on interest rates Wednesday, we’re going to see a lot of market movement this week.
I’ve been saying that a Santa Claus rally is likely since mid-November, and I’m sticking to that assessment – I think the Fed is going to take a more dovish tone than in prior meetings, and that could be just the catalyst the market needs to take off.
But keep in mind that we’re not out of the woods yet, even if we get a late-year rally. Inflation is still running hot, so it’s still important to target investments that generate high levels of income. And even better, right now we have an opportunity for a double-whammy win – high dividends coupled with stock prices on the rise.
We’ve talked before about real estate investment trusts (REITs) and why I like them so much. As a reminder, they’re required to distribute 90% of their taxable income to shareholders annually in the form of dividends and tend to have very steady income streams, either leasing to tenants of the properties they own or holding onto loans backed by real estate.
And the pick I have for you today has some serious tenants – companies like Amazon and Netflix – in some of the fastest-moving economic sectors in the country. It combines a steady dividend with serious upside potential, and I think it’s a must-have for any inflation-beating portfolio.
Kilroy Realty Corp (NYSE: KRC) is a leading U.S. landlord and developer with operations in San Diego, Greater Los Angeles, the San Francisco Bay Area, the Pacific Northwest, and Austin, Texas.
The company leases to some of the world’s leading technology, entertainment, life science, and business services companies, including Amazon, LinkedIn, Netflix, Adobe Systems, Salesforce, DoorDash, and Synopsys.
In short, KRC leases to some of the biggest tech companies in the country’s largest tech-friendly urban centers.
As of September 30, 2022, Kilroy’s stabilized portfolio totaled approximately 16.2 million square feet of space (primarily office spaces and life sciences facilities) that are 90.8% occupied and 92.6% leased. The company also had more than 1,000 residential units in Hollywood and San Diego, with a quarterly average occupancy of 93.5%.
Additionally, the company has one in-process life science redevelopment project with an estimated redevelopment cost of $25.0 million, totaling approximately 52,000 square feet. They also have three in-process development projects with an estimated $1.7 billion investment totaling about 1.7 million square feet of office and life science space.
On October 25, 2022, the company reported Q3 2022 results, including revenue of $276.0 million, up 19% year-over-year.
On the bottom line, net income available to common stockholders was $79.8 million, or $0.68 per diluted share, including a …
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor’s 100 began trading on March 11, 1983, Shah worked in “the pit” as a market maker.
The work he did laid the foundation for what would later become the VIX – to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd’s TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company’s “listed” and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah’s vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story – when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business’s Varney & Co.
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