REIT Earnings Preview: Who Paid The Rent?
Who paid the rent? Real estate earnings season kicks off this week with more than 200 REITs and housing industry companies reporting earnings over the next month.Rent collection - a metric that was rarely reported in the pre-COVID-19 era - has become the most critical statistic tracked by investors due to its impact on dividend-paying capacity.Dividend cuts have been a major theme throughout the pandemic. 65 of 170 equity REITs have reduced their dividend, but since the start of Q3, dividend increases have outnumbered cuts.REITs enter third-quarter earnings season as the third-worst performing out of 11 GICS equity sectors. Improving rent collection and dividend commentary could be a positive catalyst to drive a recovery.While many commercial property sectors have struggled, several "essential" property sectors have thrived throughout the pandemic. We discuss the trends that we're watching this earnings season in each of the real estate property sectors.
Seekingalpha · 10/19 18:00
Managers of $25 Trillion Are Almost All Bond Quant Believers Now
Many of the biggest quant strategies in the stock market these days are plagued by doubt and debate. In fixed income, they just got a $25 trillion endorsement.
Bloomberg · 10/18 23:01
Cell Tower REITs: 5G Is Here
The high-flying cell tower sector has thrived throughout the pandemic. Cellular network capacity has been pushed to the limits as businesses, schools, and individuals stay connected via virtual interaction.5G is here. Apple's upcoming iPhone 12 launch represents the true "arrival" of 5G, the much-anticipated next-generation mobile network that promises to usher in a new era of technological innovation.Cell tower REITs will be the "hub" of these 5G networks, augmented by higher-density small cells. High-power macro towers provide the most economical mix of wide coverage and capacity.Fixed wireless broadband - using a cell network for home broadband - will be 5G’s true “killer app” and will fundamentally disrupt the telecommunications space, likely to the benefit of consumers.Cell tower REITs continue to benefit from favorable competitive positioning within the telecommunication sector. While these REITs are priced for perfection, low supply and high demand should translate into continued pricing power for cell tower REITs.
Seekingalpha · 10/15 15:00
Healthcare REITs: Signs Of Life
Healthcare REITs - which have been "ground-zero" of the coronavirus pandemic - have shown signs of life over the past quarter on stabilizing fundamentals and on hopes of a potential vaccine.For senior housing REITs, in particular, the pandemic has put a significant dent in near-term demand and has driven significantly higher expenses, but interim updates suggest the worst is behind them.Despite the headwinds, healthcare REITs reported near-perfect rent collection outside of the senior housing sub-sector. Five healthcare REITs have reduced dividends this year, while three have raised.The long-term outlook for senior housing remains intact as the long-awaited demographic-driven demand boom is finally arriving. Attitudes towards senior housing, however, need to be monitored.No healthcare REIT sector is entirely immune from the long-term consequences of the pandemic. Even the "safe haven" Medical Office Building sub-sector faces pressures from the dramatically increased use of telemedicine.
Seekingalpha · 10/13 17:00
Manufactured Housing REITs: Not Enough Homes, So Onto Boats
Manufactured Housing REITs have proven to be immune from coronavirus-related headwinds that have slammed much of the real estate sector, collecting nearly 100% of rents, while also boosting dividends this year.Driven by the macroeconomic tailwinds associated with the affordable housing shortage and favorable demographics, Manufactured Housing ("MH") REITs have been the best-performing real estate sector of the past decade.External growth through acquisitions has provided an added boost. Amid this housing shortage, MH REITs have begun investing in a new - but fundamentally similar - asset class: boat marinas.Headwinds become tailwinds - after a sharp slowdown in late-Spring, recreational vehicle and boat sales have smashed records this summer, while the U.S. housing market has roared back to life.MH REITs aren't cheap, but long-term fundamentals remain stellar for this "essential" property sector. Low supply and strong demographic-driven demand for housing continue to provide a compelling backdrop.
Seekingalpha · 10/06 15:00
U.S. New Home Market Cap Highest Since August 2006
Based on the latest sales data reported by the U.S. Census Bureau, the preliminary nominal estimate of the market capitalization for new homes was $30.6 billion in August 2020.Perhaps more remarkably, the median sale price of new homes sold in the U.S. fell to an initial estimate of $312,700 in August 2020.With the trend for the sale prices of new homes generally flat to slightly falling over the last two years, the only way the market cap of new homes could increase is because of rising sales volumes.
Seekingalpha · 09/30 13:30
Hotel REITs: Winter's Coming
"No vacancy" becomes "no occupancy." Hotel REITs - along with the global leisure and tourism industry - have been decimated by the coronavirus pandemic, plunging more than 50% this year.Following a record year for the industry in 2019, hotels REITs reported occupancy rates below 20% in Q2. Occupancy has recovered to roughly 45% by late summer, but winter is coming.Every hotel REIT has slashed its dividend in an effort to stay afloat, as 40-50% occupancy is needed to "keep the lights on." Suburban-focused and leisure-oriented properties have outperformed urban hotels.Perhaps a more "pure play" on the success of a vaccine than even the pharmaceuticals themselves, a significant "second-wave" of the pandemic would be likely catastrophic for equity holders.While leisure demand should bounce back relatively quickly when the pandemic subsides, business and group demand may take up to a half-decade or longer to fully recover.
Seekingalpha · 09/30 13:00
Homebuilders: A V-Shaped Vendetta
An antihero of the prior financial crisis, Homebuilders have seemingly been on a vendetta over the last six months, asserting themselves as the unexpected leader of the early post-pandemic recovery.Homebuilders were slammed at the outset of the pandemic on fears that a coronavirus-induced recession could inflame a repeat of the Great Financial Crisis for the critical U.S. housing.Instead, the U.S. housing industry has roared back to life in recent months. New Home Sales, Existing Home Sales, and Home Prices have all seen a substantial reacceleration this year.The sharp rebound in housing market activity has been aided by longer-term macroeconomic trends of favorable millennial-led demographics, historically low housing supply, and near-record low mortgage rates.Housing remains an “unloved” sector despite the compelling long-term tailwinds at its back. Homebuilders trade at deeply discounted valuations to the S&P 500 despite their stellar growth rates.
Seekingalpha · 09/25 12:00
August New Home Sales Confirm That The Long Leading Housing Sector Has Been Surging
Housing is a long leading sector of the economy, typically giving us information 12 to 18 months into the future.New home sales are the most leading of all housing metrics, but are very volatile and heavily revised.August new home sales hit the highest level in nearly 15 years.Because they confirm the surge in the less volatile single-family housing permits, the new high is almost certainly a signal rather than a noise, a powerful plus for the economy in 2021.
Seekingalpha · 09/25 06:07
Pandemic to accelerate growth in Sunbelt mid-sized cities: KKR's Campbell Roberts
KKR's Paula Campbell Roberts sees the pandemic catalyzing a number of changes in business and the economy in a KKR Viewpoints report titled, "The New Normal."She sees economic activity spreading
Seekingalpha · 09/24 12:25
Industrial REITs: Virus Exposes Frail Supply Chains
The "hub of e-commerce" and the hottest property sector of the last half-decade, Industrial REITs have been unfazed by the coronavirus-induced pain that has encumbered much of the REIT sector.The dramatic acceleration in e-commerce adoption has pulled forward the "retail apocalypse" trends as retailers divert more of their capital away from malls and into distribution supply chains.While much of the REIT sector was slashing dividends this year, nearly half of industrial REITs have raised dividends in 2020. Rent collection has averaged more than 97% since April.Underscoring the sector's favorable supply/demand conditions, Amazon's rumored interest in converting malls into last-mile distribution hubs has turned some heads, but the impact on industrial REITs will be immaterial.Recent earnings reports confirmed that fundamentals are back in-line with pre-pandemic expectations with positive growth expected in 2020. With the pandemic exposing deficiencies in supply chains, we believe the logistics-boom is back in the early-innings.
Seekingalpha · 09/22 17:00
W.P. Carey: High Quality REIT With Inflation Protection
This diversified REIT surprised with 98% rent collection for retail and office holdings in Q2, the heart of the pandemic.It surpassed even our expectations and we were bulls to begin with.We review the recently-released Q2 results and walk our readers through the risks and rewards of owning this REIT.The stock yields 6.3%.
Seekingalpha · 09/22 12:35
SPDR Dow Jones REIT ETF declares quarterly distribution of $0.6509
SPDR Dow Jones REIT ETF (RWR) - $0.6509.30-Day SEC Yield of 4.13% as of Sept. 18.Payable Sep 24; for shareholders of record Sep 22; ex-div Sep 21.
Seekingalpha · 09/21 19:05
Timber REITs: Literally On Fire
One of the best-performing REIT sectors this year, Timber REITs have nearly doubled since their mid-pandemic lows in March, reignited by a rejuvenation in the suddenly red-hot U.S. housing market.Housing has proven to be the "ultimate essential service." Households have exhibited a propensity to prioritize housing-related payments and investments in home improvement and living situation upgrades amid the pandemic.Lumber prices have soared to record-highs from the combination of insatiable demand and reduced supply resulting from pandemic-related production shutdowns and forest fires raging in the Pacific Northwest.Timber REITs were caught off-guard by the velocity of the rebound in lumber demand from single-family homebuilding and remodeling activity and have struggled to meet customer demand.Long-term fundamentals look strong for the Timber REIT and broader housing sectors, powered by demographic trends that suggest a revival of the suburbs and single-family housing in the 2020s.
Seekingalpha · 09/17 17:00
What Goes Up Must Come Down
The "tech-wreck" dragged on as U.S. equity markets declined for the second-straight week after Congress failed to reach a compromise on a renewed stimulus package and after a potential vaccine setback.The seemingly unstoppable rally from the "stay-at-home winners" has come to a screeching halt over the last two weeks. The Nasdaq 100 dipped into "correction territory" with declines of nearly 5%.It was an especially choppy week in the real estate sector as the relatively mundane 2.2% decline from the broad-based Equity REIT ETF masked a sharp dip from retail REITs.It shaped up to be a very busy week of REIT-related news flow, headlined by a flurry of rent collection updates, several dividend increases, and some notable M&A news in the mall and self-storage REIT sectors.Homebuilders were a bright spot this week as housing data continues to impress. Mortgage applications to purchase a single-family home are now higher by a stunning 40% from last year.
Seekingalpha · 09/12 13:00
Equity REIT Performance In A Nutshell: Week 32
Seeking Alpha - Article · 08/10 14:30
A warning about real estate and REITs from famed hedge fund manager Seth Klarman of Baupost
Seeking Alpha - Article · 08/08 17:45
Trends In Housing Supply
Seeking Alpha - Article · 08/04 14:11
Equity REIT Performance In A Nutshell: Week 31
Seeking Alpha - Article · 08/02 19:52
New Home Sales A Bright Spot For U.S. Economy
Seeking Alpha - Article · 07/29 10:26
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