iREIT Daily

Making Sense of Yesterday’s Spate of Economic News

Brad Thomas

467 postsFebruary 2, 2022

Let’s start off with all the economic data that came out yesterday after I published Tuesday’s blog. U.S. construction spending was among the facts and figures released, showing that it:

… increased less than expected in December as a solid rise in private projects was partially offset by a sharp decline in outlays on public projects.
The Commerce Department said on Tuesday that construction spending rose 0.2% after advancing 0.6% in November.
Economists polled by Reuters had forecast construction spending gaining 0.6%. Construction spending increased 9.0% on a year-on-year basis in December. It rose 8.2% in 2021.

Those are Reuters’ words, which – as is often true – are pretty academic in nature. So let me try to interpret the report.

Essentially, when factoring in inflation, the construction sector’s real output could be shrinking. After all, construction goods were 0.6% more expensive in December, a 3x+ difference over the spending rate.

Elsewhere, the Institute for Supply Management recorded a 14-month low for U.S. manufacturing activity last month. On the plus side, that same organization (to quote another Reuters story):

… marked the third straight month of signs of improvements in labor and supplier delivery performance. Unfinished work increased at its slowest pace in 15 months, and manufacturers remained upbeat on demand.

ISM Chair Timothy Fiore did acknowledge that material shortages, transportation issues, “and lack of direct labor on factory floors” because of Omicron are still causing problems. But again, we could be seeing that situation clear up in the near- to mid-term.

Last but not least in the list of yesterday’s economic news reported, we have the Labor Department’s job openings number. Of that, we now know there were 10.925 million nationwide vacancies at 2021’s close.

That’s up from November’s 10.775 million as well as the estimated 10.3 million economists expected.

More Non-REIT News to Know About

Speaking of labor shortages, Home Depot (HD) – which, I believe, used to have a rigorous personality test potential employees had to take – will now feature an “accelerated hiring process” to fill positions.

On February 16, it’s hosting a virtual Spring Career Day with the intention of hiring 100,000+ people. Many of those, it hopes, will be a one-and-done kind of deal, where they apply and are accepted the same exact day.

But considering how 4.3 million Americans, or nearly 3% of the U.S. workforce, quit the jobs they did have in December…

Let’s just say I’ll be looking out for any follow-up information on this story in a few weeks.

Those kinds of issues didn’t stop General Motors (GM) from achieving a 56% jump in net income last year. As it reported yesterday, it made $10.02 billion total, making for $7.07 per share (minus one-time items).

That beat estimates of $6.83 per share, though full-year revenue came in at $127 billion instead of the $128.7 billion expected. And we can’t forget that its U.S. sales fell 13%… allowing Toyota (TM) to take the lead in that crucial market.

One other story I’d like to mention in this pre-REIT (real estate investment trust) segment is international in nature. It comes out of the U.K., where gas prices were reportedly almost four times higher in January 2022 than they were in January 2021.

The U.S. wasn’t the only one releasing important economic information yesterday. Britain’s Office for National Statistics also released a report, with data showing that wholesale gas prices had climbed to 12.8 pence per kilowatt-hour.

Last year, it was just 1.5.

And we think we have it bad here in the U.S.

The World According to REITs

We’ve got just one REIT earnings report to write about today. And, I’ve got to say, I’m enjoying this slow pace while it lasts.

I’m just as interested as you in seeing how the larger sector, each subsector, and individual companies performed last quarter and last year… That whirlwind of information can be somewhat exhausting to properly process.

I’m up for the job. Don’t think otherwise. But, again, I’ll enjoy the slower pace until then.

For now, here’s what we’ve got for this publication:

Equity Residential (EQR) announced Q4 normalized funds from operations (FFO) of $0.82 per share. And it’s guiding for $3.40-$3.50 for 2022. The REIT reported a 4.9% increase in quarterly same-store revenue year-over-year. Same-store expenses for all of 2021 rose 3%, and occupancy ended at 96.4%, down from 96.7% in Q3. In separate news, Fitch will withdraw its ratings on the company around March 3 for commercial reasons.
CyrusOne (CONE) says its shareholders approved its plans to be bought out by KKR & Co. (KKR)-affiliated funding and Global Infrastructure Partners – one a major global investment firm and the other the world’s leading infrastructure investor. As a result, each CONE common share will be eligible to receive $90.50 in cash, probably as of next quarter.
Innovative Industrial Properties (IIPR) announced that its IIP Operating Partnership initiated a public offering of $300 million aggregate principal amount of senior notes due 2027. Net proceeds will go toward funding its regular kind of real estate assets, as well as general corporate purposes.

Stay tuned for more where that came from as February unfolds. In fact, get ahead of the game by signing up for my free e-letter, Intelligent REIT Daily today.

You’ll have access to additional updates there you won’t want to miss.

(Source: The Daily REITBeat)

Happy Investing

Brad Thomas

467 posts

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Brad Thomas is Senior Research Analyst at iREIT and CEO of Wide Moat Research LLC. With over 30 years of real estate experience, he is also long-time Editor of Forbes Real Estate Investor, a monthly subscription-based newsletter that dives deep into the vast world of profitable properties, and since 2021, he has served as an adjunct professor at New York University.

Thomas has also been featured on or in Forbes magazine, Kiplinger's, U.S. News and World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox. And he was the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021 based on both page views and number of followers.

Thomas is the recently-published author of The Intelligent REIT Investor Guide (2021), co-author of The Intelligent REIT Investor (2016), and he wrote The Trump Factor: Unlocking The Secrets Behind The Trump Empire (2016) - all available on Amazon.

Thomas received a bachelor of science in business/economics from Presbyterian College and is married with five wonderful kids.

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REIT Mutual Fund	Symbol
Alpine Realty Income and Growth Fund	AIGYX, AIAGX
American Century Real Estate Fund	REAIX, REACX, AREEX, AREWX, ARYCX, AREDX
Real Estate Securities Fund	MRESX
AR Capital Real Estate Income Fund	ARIAX, ARICX, ARIPX
AssetMark Real Estate Securities Fund	AFREX
Aston/Harrison Street Real Estate Fund	AARIX, ARFCX
Baron Real Estate Fund	BREIX, BREFX
BlackRock Real Estate Securities	BIREX, BAREX, BCREX
Brookfield U.S. Listed Real Estate Fund	BRUAX, BRUCX, BRUIX, BRUYX
CGM Realty Fund	CGMRX
West Loop Realty Fund	REIIX, REIAX, REICX
Cohen & Steers Institutional Realty Shares	CSRIX
Cohen & Steers Realty Income Fund	CSEIX, CSDIX, CSBIX, CSCIX
Cohen & Steers Realty Shares	CSRSX
Columbia Real Estate Equity Fund	CREAX, CREIX, CRRVX, CRERX, CREEX, CRRFX, CREWX, CRECX, CREBX
Compass EMP REC Enhanced Volatility Weighted Fund	CWRAX, CWRIX, CWRTX, CWRCX
Davis Real Estate Fund	RPFRX, DREYX, DRECX, DREBX
Delaware Real Estate Investment Trust Portfolio II	DPRTX, DPRBX
Delaware Real Estate Investment Trust Portfolio	DPREX, DPRSX, DPRRX, DPRCX
DFA Real Estate Securities Portfolio	DFREX
Dunham Real Estate Stock Fund	DAREX, DNREX, DCREX
DWS RREEF Real Estate Securities Fund	RRRRX, RRREX, RRRAX, RRRSX, RRRBX, RRRCX
DWS RREEF Real Estate Securities Income Fund	REFAX, REFCX, REFIX, REFSX
Eaton Vance Real Estate Fund	EAREX, EIREX
EII Realty Securities Fund	EIIRX
Fidelity Advisor Real Estate Fund	FHEIX, FHEAX, FHETX, FHECX, FHEBX
Fidelity Advisor Real Estate Income Fund	FRIRX, FRIQX, FRINX, FRIOX
Fidelity Real Estate Income Fund	FRIFX
Fidelity Real Estate Investment Portfolio	FRESX
Fidelity Spartan Real Estate Index Fund	FSRNX, FRXIX, FSRVX
Fidelity Series Real Estate Equity Fund	FREDX, FREFX
Fidelity Series Real Estate Income Fund	FSREX, FSRWX
Forward Real Estate Long/Short Fund	KSRYX, FRLSX, FFSRX, KSRAX, KSRCX, KSRBX
Forward Real Estate Fund	FPREX, FFREX, KREAX, KRECX
Forward Select Income Fund	KIFYX, FSIMX, FFSLX, KIFAX, KIFBX, KIFCX
Franklin Real Estate Securities Fund	FREEX, FRLAX, FRRSX, FSERX
GMO Real Estate Fund	GMORX
Goldman Sachs Real Estate Securities Fund	GREIX, GRETX, GREAX, GRESX, GRERX, GREBX, GRECX
Great-West Real Estate Fund	MXREX
Heitman REIT Fund	OARTX, OBRTX
ING Real Estate Fund	CRARX, IREWX, IDROX, CLARX, CRWRX, CRCRX, CRBCX
INVESCO Real Estate Fund	REINX, IARFX, IARIX, IARYX, IARAX, IARRX, IARCX, AARBX
Ivy Real Estate Securities Fund	IRSAX, IREIX, IRSYX, IRSRX, IREEX, IRSCX, IRSBX
John Hancock Real Estate Securities Fund	JIREX
Johnson Realty Fund	JRLTX
J.P.Morgan Realty Income Fund	URTLX, JRIRX, URTAX, URTBX, URTCX
J.P. Morgan Security Capital U.S. Core Real Estate Securities Fund	CEEAX, CEERX, CEEFX, CEESX, CEECX
J.P. Morgan U.S. Real Estate Fund	SUSIX
Lazard U.S. Realty Equity Portfolio	LREIX, LREOX
Lazard U.S. Realty Income Portfolio	LRIIX, LRIOX
Manning & Napier Real Estate Series	MNRIX, MNREX
Morgan Stanley Institutional U.S. Real Estate Portfolio	MSUSX, MUSDX, MSULX, MURSX
Natixis AEW Real Estate Fund	NRFAX, NRFYX, NRFBX, NRFCX, NRFNX
Neuberger Berman Real Estate Fund	NBRIX, NBRFX, NREAX, NRERX, NRECX, NRREX
Nuveen Real Estate Securities Fund	FREAX, FARCX, FRSSX, FREBX, FRLCX, FREGX
Oppenheimer Real Estate Fund	OREAX, OREIX, OREYX, ORENX, OREBX, ORECX
PHOCAS Real Estate Fund	PHREX
PIMCO RealEstateRealReturn Strategy Fund	PRRSX, PETPX, PETAX, PETDX, PETCX, PETBX
Pioneer Real Estate Shares	PWREX, PYREX, PCREX, PBREX
Principal Real Estate Securities Fund	PIREX, PIRPX, PREPX, PRETX, PREJX, PRRAX, PRERX, PRENX, PRAEX, PRCEX, PRLEX
ProFunds Real Estate UltraSector ProFund	REPIX
Prudential Select Real Estate Fund	SREAX
Prudential U.S. Real Estate Fund	PJEAX, PJEZX, PJECX, PJEBX
REMS Real Estate Income 50/50 Portfolio	RREIX
REMS Real Estate Value-Opportunity Fund	HLRRX, HLPPX
Rydex Real Estate Fund	RYREX, RYHRX, RYCRX
SA Real Estate Securities Fund	SAREX
SEI Institutional Mgd Real Estate Fund	SETAX, SEIRX
Spirit of America Real Estate Income & Growth Fund	SOAAX
SSgA Clarion Real Estate Fund	SSREX
Stratton Real Estate Fund	STMDX
T.Rowe Price Real Estate Fund	TRREX, PAREX
TIAA-CREF Real Estate Securities Fund	TIREX, TRRPX, TRRSX, TCREX
Vanguard REIT Index Fund	VGSNX, VGRSX, VGSLX, VGSIX
Virtus Real Estate Securities Fund	PHRAX, PHRIX, PHRCX, PHRBX

REIT ETF	Symbol
Flex Shares	ASET
Wisdom Tree Global Ex-US	DRW
S&P 500 Equal Weight	EWRE
iShares FTSE Industrial/Office	FNIO
MSCI Real Estate Index	FREL
S&P REIT Index	FRI
First Trust S&P REIT	FRI
iShares Real Estate 50	FTY
Flexshares Global	GQRE
iShares Cohen & Streers	ICF
iShares International Developed RE	IFGL
iShares US RE	IYR
Premium Yield Equity REIT	KBWY
ETRACS Monthly Pay 2x Leverage	MORL
Market Vector Mortgage	MORT
iShares Global REIT	REET
iShares FTSE Mortgage	REM
iShares Residential	REZ
IQ US Real Estate Small Cap	ROOF
iShares FTSE NAREIT Retail	RTL
DOW Jones Global RE	RWO
SPDR Dow Jones	RWR
Schwab US REIT	SCHH
Super Dividend REIT	SRET
ProShares Ultra RE	URE
Vanguard REIT	VNQ
Vanguard Global ex-US	VNQI
iShares International Developed	WPS
Wilshire US REIT	WREI
Pacer Benchmark Data & Infrastructure RE	SRVR
Pacer Benchmark Industrial RE	INDS
Pacer Benchmark Retail RE	RTL
Hoya Capital Housing	HOMZ
NetLease Corporate RE	NETL

REIT Name	Ticker	Annual Increases/yr
Federal Realty	FRT	51
Universal Health Realty	UHT	33
National Retail Properties	NNN	29
Realty Income	O	27
Tanger Outlets	SKT	26
Urstadt Biddle	UBA	25
Essex Property Trust	ESS	25
W.P.Carey	WPC	22
National Health Investors	NHI	17
Equity Lifestyle	ELS	15
Digital Realty	DLR	15

Making Sense of Yesterday’s Spate of Economic News

Brad Thomas

467 postsFebruary 2, 2022

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