Select Income REIT’s overarching mission is to provide secure and growing cash flows for the company and its investors. The company seeks to accomplish this by:
Selectively Acquiring Strategic Office and Industrial Assets – SIR seeks to acquire appropriately priced single tenant net leased office and industrial properties that are strategic to tenants, such as corporate headquarters, build-to-suit facilities, strategic distribution hubs and other buildings in which tenants have invested a significant amount of their own capital. In its acquisition underwriting, SIR favors fully occupied properties with remaining lease terms of at least 10 years for industrial and 7 years for office.
Generating Continued Rent Growth in Hawaii – As Hawaii’s largest industrial land owner, SIR has benefitted from the significant and prolonged appreciation of real estate on the island of Oahu. This has enabled SIR to generate an average rent increase of more than 40% from rent resets in Hawaii since the company’s IPO in 2012.
Maintaining its Dividend Strength and Payout Ratio Flexibility – Since its IPO in 2012, SIR has raised its quarterly dividend six times for an aggregate increase of 25 percent. With a quarterly dividend rate of $0.51 per share today, SIR’s yield is superior to virtually all of its peers. In addition, SIR’s quarterly distribution equated to just 72 percent of its funds from operations for the fourth quarter of 2016, indicating a capacity for continued distribution growth.
Retaining its Investment Grade Ratings: SIR has conservatively managed its balance sheet, which has enabled the company to earn investment grade ratings from both Moody’s (Baa2) and S&P (BBB-). SIR plans to maintain – or improve upon – these ratings going forward.