AMB Property CorporationAMB

Morningstar Rating

Stock Research and Analysis

by David Rodziewicz

Weakening global fundamentals have created a slower-growth environment for AMB Property. AMB's geographic diversification should allow for more stability than other industrial real estate investment trusts, but the global economic correction will still Read more

Bulls Say

AMB has a large tenant pool, which minimizes the credit risk of individual tenants. The 10 largest tenants together account for just 16% of annualized base rent.

AMB forms alliances with local real estate firms for property development, leasing, and management. Management is therefore able to focus on its core activity of strategic planning and raising capital.

AMB's global footprint contributes to the company's geographic diversity, reducing the impact of a localized economic downturn on profitability. Read more

Bears Say

Declining asset values and rising capitalization rates are likely to weigh on AMB's ability to deleverage through property sales.

The supply of industrial space has continued to increase while demand has declined. This should cause a softening in the market, driving down rents and increasing vacancies.

Depending on management's capital-allocation decisions, a dividend cut is possible during the next few years.

If long-term interest rates rise, in addition to already-increased credit spreads, this firm's cost of capital would increase, pressuring asset values and reducing cash flow. Read more

Strategy

AMB wants to increase its international exposure in order to spur revenue growth. It believes targeting transportation hubs such as London, Paris, Beijing, and Tokyo will win more multinational company Read more

Management

Chairman and CEO Hamid Moghadam cofounded AMB in 1983; through his leadership, the company is taking a proactive stance toward corporate governance that is rare among REITs. AMB was one of the first public companies to expense stock options. Plus, the Read more

Profile

AMB Property is a REIT that owns and manages nearly 160 million square feet of industrial space in North America, Europe, and Asia. Its portfolio serves about 2,600 customers Read more

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