iREIT Daily

This Battle Isn’t Over Yet

Brad Thomas

467 postsNovember 10, 2021

I mentioned trendy – and expensive – home-exercise company Peloton (PTON) in Friday’s blog post after it had to trim full-year expectations significantly. Part of the problem, it said, was people stepping out of their homes to frequent regular gyms again.

It’s apparent solution to those waning sales is to announce the debut of a $495 webcam, Peloton Guide. Available in the U.S. and Canada early next year, the device will track owners’ real-time movements and offer corrections where necessary.

Co-founder and Chief Product Officer Tom Cortese says:

“Peloton Guide demystifies strength training to create a more engaging experience that will help members stay motivated. We combined our world-class instructors and class content with the best machine learning technology to create a whole new way to train.”

Basically then, it’s an in-home, non-human version of a personal trainer.

At last check, investors weren’t impressed with the announcement, leaving the stock trending down yet again. Though that’s not the real reason I bring it up today.

The real reason is that Peloton represents the ongoing battle of man vs. machine: of face-to-face interactions vs. face-to-technology ones.

Last summer, it seemed all but inevitable to many that machines would annihilate the competition. But judging by Peloton and even Amazon’s Q3 results, that assumption may have been premature.

That’s not to say the physical world is all smiles and rainbows right now, of course. Take it from Michael Murray, co-chief operating officer at D.R. Horton, the largest U.S. homebuilder by market cap size.

He told participants on yesterday’s earnings call that he still sees “costs really increasing across the board.” And CFO Bill Wheat added that, “Even when we see perhaps some relief from lumber, as we move further into fiscal ’22, I think that will be offset by other cost increases.”

This Too Shall Pass

Lumber prices are down 65% from earlier this year, which was 316% higher than where they began 2020 at. But they remain extremely elevated nonetheless, and other must-have materials are on the rise regardless amidst continuing supply shortages.

Fortunately, Treasury Secretary Janet Yellen assured the MarketPlace radio show yesterday that inflation was set to get better soon.

Co-host Kai Ryssdal asked her to expound on why she considers current inflation to be transitory. “Because you look around now,” he noted, and “it’s not great.”

Her first response was to explain why it feels bad now, including “a dramatic shift in spending away from services toward goods,” houses, and food at home, port closures, and some countries being less capable of meeting production demand – all pandemic related.

To which Ryssdal replied, “… but I want you to explain why you believe by the second half of next year, this is all going to be worked through.”

Then her answer was rising vaccination rates: that those are giving people more peace of mind to get back to life as we knew.

“As people feel safer, the demand for these goods… will diminish. And they’re going to go back to services in a more normal pattern. And at that point, I’d expect the price increases to level off, and we’ll go back to inflation that’s closer to the 2% we consider normal.”

So there we go!

The World According to REITs

We’ve got another real estate investment trust (REIT) laggard today in the Q3 earnings department. That would be Gladstone Land (LAND), which reported adjusted funds from operations (AFFO) of $0.17 per share.

The company acquired five new farms in the three-month period at about $62.3 million. They amounted to 1,516 total acres of land and 5,000 acre-feet of banked water. It also signed six new lease agreements in that time frame.

And here are three more REIT updates to digest:

Public Storage (PSA) priced 17.4 million shares of its 4% series R cumulative preferreds. The offering resulted in gross proceeds of $435 million, parts of which it will use to fund acquisitions and future preferred-share redemptions.
Store Capital (STOR) priced $375 million of 2.70% senior notes due 2031. Net proceeds will be put toward repaying indebtedness, funding property acquisitions, and other general corporate purposes.
Orion Office REIT (ONL), which isn’t actually listed yet, will be added to the S&P SmallCap 600 before the opening bell on November 16.

That’s it for today, though never forget there could always be more tomorrow. A lot more.

That’s why, even as we wind down third-quarter earnings season in the REIT world, it’s still a great idea to sign up for the free Intelligent REIT Daily e-letter. It always features three other updates whenever they’re available.

(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.

Eight Steps Forward, One Step Back

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

This Battle Isn’t Over Yet

Brad Thomas

467 postsNovember 10, 2021

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467 postsNovember 10, 2021

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