iREIT Daily

One Person Says the Worst Is Over

Brad Thomas

467 postsFebruary 18, 2022

This news just in! Meta Platforms/Facebook (FB) has been knocked off the world’s 10 largest companies list.

It slid from ranking sixth in market value to 11th, with $500 billion lost since its September 2021 peak. And, naturally, yesterday’s market activity didn’t help.

Thursday’s indices closed down, with the S&P 500 off by 94.75 points, or 2.12%; and the Dow off by 622.24 points, or 1.78%. Then there was the tech-heavy Nasdaq, which clearly fared the worst at -407.38 points, or -2.88%.

Ouch! And Ouch!

That made the small-cap-oriented Russell 2000’s 49.21-point, or 2.37%, drop look not-so-bad in comparison.

Elsewhere in the business world, Mario Coredero, the Port of Long Beach’s executive director, told “Mornings With Maria” that “the worst is over in terms of the supply chain.” Capacity constraints “are improving.” And he’s hopeful that, as Covid-19 cases continue to fall and society continues to open up, people will focus their spending “more on services as opposed to goods.”

Until then, the Justice Department and FBI say they’ll search out companies that aren’t cooperating in consumer’s best interest. DOJ Antitrust Division Assistant Attorney General Jonathan Kanter said yesterday that:

Temporary supply chain disruptions should not be allowed to conceal illegal conduct. The Antitrust Division will not allow companies to collude in order to overcharge consumers under the guise of supply chain disruptions.

But that might not be the most effective or ethical practice considering the multitude of reasons behind inflation. It’s also labor issues, which are prompting employers to offer excessively higher pay to fill positions.

Those automatically mean higher business costs that have to be balanced out somehow, someway. Usually by increasing prices.

The way I see it, sending companies into a panic over the possibility of a federal investigation could actually backfire further on consumers.

More Non-REIT News to Know About

Continuing with inflation news, the National Association of Home Builders says that new single-family homes are costing $18,600 more these days. That’s because lumber – the main ingredient necessary to structure most house’s – is so much more expensive.

In a mid-week “Varney & Co.” interview, NAHB CEO Jerry Howard blamed it on:

… a combination of the lack of supply, the supply chain problem, [and] the lack of transportation for them to get lumber from the sites to the builders. It’s a problem with the lumber companies themselves not increasing their production. And it’s a problem with our trade war with Canada on lumber.

On top of that, he added, “I’ve had guys tell me they’re having up to four- or five-month delays in getting everything from cabinets, garage doors, appliances, even trusses.”

Again, properly dealing with inflation is rarely so easy as attacking the free markets.

Those costs alone haven’t stopped housing market demand. But rising mortgage rates might. Yahoo Finance noted:

A week ago, economists projected mortgage rates would reach 4% toward the year-end. Now the rate on the 30-year fixed home loan is just a whisper from that threshold, hitting 3.92%…

Data from Freddie Mac shows that’s up 3.69% week-over-week after rising pretty much the whole year long. It’s also the highest point seen since May 2019.

The article goes on to quote Freddie Mac Chief Economist Sam Khater saying, “As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets.”

That makes sense. However, as I mentioned yesterday, consumers are still consuming left and right. Wynn Resorts (WYNN) CEO Craig Billings confirmed that this week with his comments that, “Premium customers… are traveling and spending again with a vengeance.”

The World According to REITs

We have seven real estate investment trusts (REITs) earnings releases to report. Which is perfect considering how I’ll feature four here and three over at Intelligent REIT Daily.:

Digital Realty (DLR) reported core Q4 funds from operations (FFO) of $1.67 per share and set 2022 guidance at $6.80-$6.90. Its total bookings signed during the quarter should generate $156 million of annualized rental revenue — $11 million of which should come from interconnections. And it signed renewal leases representing $151 million of annualized rental revenue.
Tanger Factory Outlet Centers (SKT) announced per-share Q4 FFO of $0.45 with core 2022 guidance set at $1.68-$1.76. Occupancy reached 95.3% by year’s end compared to 94.4% the previous quarter and 92.2% the previous December 31. And average tenant sales rose 15% year-over-year. For the full year, net operating income was $310.2 million versus 2020’s $267.4 million. While fourth-quarter NOI was $82.8 million versus $78.4 million in Q4-20.
Ventas (VTR) recorded normalized Q4 FFO of $73 per share, with Q1-22 guidance of $0.76-$80 Same-store average occupancy in the fourth quarter increased 200 basis points (bps) to 83.4% year-over-year. But same-store NOI, which stayed stable quarter-over-quarter, fell 3.6% (excluding HHS grants). Meanwhile, its medical office building (MOB) same-store occupancy rose for the fifth quarter in a row.
Washington REIT (WRE) announced Q4 core FFO of $0.17, with 2022 guidance of $0.87-$0.93. Same-store multifamily NOI was 4.2% higher year-over-year and 8% higher on a cash basis. It noted 8.7% effective new lease rate growth. And retention rose to 72% versus Q4-20’s 51%. Meanwhile same-store average occupancy rose 1.9% year-over-year to 95.9%. The REIT had about $930 million in available liquidity at year’s end.

Also, despite the market’s “mean” movements Thursday, we still saw some winners.

(Source: The Daily REITBeat)

Happy Investing

Brad Thomas

467 posts

View all my Posts

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.

Why Do I Celebrate REITs on President’s Day?

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

One Person Says the Worst Is Over

Brad Thomas

467 postsFebruary 18, 2022

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One Person Says the Worst Is Over

467 postsFebruary 18, 2022

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