iREIT Daily

More Real Estate Data to Digest – If You Can

Brad Thomas

467 postsJuly 21, 2022

Yesterday, I highlighted some of the housing market’s biggest hurdle s including:

Rapid inflation
Rising interest rates
Inventory shortages
A decline in new construction numbers.

Typically, the U.S. residential real estate market is a good indication of its economic strength. If you remember back to 2008, it was the housing market that set the stage for the perfect storm.

These days, the circumstances might be very different. But there’s still a lot we can learn from our real estate sector. Which is why I’m focusing on it again today.

Now, the National Association of Realtors (NAR) yesterday released its “Existing Home Sales Snapshot for June” report. It found that the U.S. housing market is beginning to cool due to record-high home prices mixed with an increase in mortgage rates.

The median sale price for an existing home shot up to $416,000 last month, mind you – a 13.4% increase year-to-date and the highest amount ever recorded. Concurrently, existing home sales dropped for a fifth straight month, falling 5.4% to an annualized rate of 5.12 million.

The organizations chief economist, Lawrence Yun, had this to say on the matter:

“Falling housing affordability continues to take a toll on potential home buyers. Both mortgage rates and home prices have risen too sharply in a short span of time…
“Finally, there are more homes on the market. Interestingly though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”

After all, real estate is perhaps the most prominently affected market when it comes to interest rate increases. Yet the question remains on how this problem will affect the broader economy.

The Federal Reserve wants to get inflation down to 2%, where it was before the pandemic. So it’s elevated its short-term interest rate target by 1.5% so far.

But what if 2% isn’t going to happen? What if prices continue to climb along with interest?

If the housing market is any indicator, our rising cost discomfort could just be getting started. This is why simple trends in the real estate market can be canaries for the coal mine that is our current economy.

More Non-REIT News to Know About

As I’ve shared before, Netflix (NFLX) – the world’s premier streaming platform – was on the ropes for a little while now. That was to be expected since it endured two straight quarters of waning subscribers… the first time this has happened in its history.

In the last quarter, it lost 970,000 paid subscribers. That’s really not good, but it expected to lose over a million more. So investors ultimately celebrated the results.

Even so, Netflix very well knows it has some work cut out for it. So it’s now betting a lot on a two-pronged approach.

“We’re talking about losing 1 million instead of losing 2 million, so our excitement is tempered by the less-bad results,” Chairman Reed Hastings admitted. “Losing a million and calling it success is tough. But really, we’re set up very well for the next year.”

That’s quite the hopeful statement everything considered. For one thing, Netflix’s stock has shed nearly two-thirds of its value since the beginning of this year. And it’s facing growing competition from rival streaming services like Amazon Prime and Hulu.

To combat that, Netflix is launching a lower-price, ad-supported option. It also plans to crack down on password-sharing by charging households to share accounts.

In a letter to investors earlier this week, Netflix explained the ad initiatives are slated to take effect next year. Though they’ll be working to hamper too much sharing much sooner.

Hopefully, these measures will also help it buy more content. Who wants to see The Office featured there again?

The World According to REITs

Highwoods Properties, Inc. (HIW) tends to be a superstar I keep an eye on.

This real estate investment trust (REIT) owns pristine high-rises and other office environments that truly bring out the best in their business tenants. These are situated in desirable markets like Atlanta, Georgia; Orlando, Florida; Raleigh, North Carolina; and Richmond, Virginia.

Now, this powerhouse is putting down roots in another of the nation’s most prosperous markets… Dallas, Texas.

The Granite Park Six and 23Springs are two brand-new beautiful buildings there with 1.064 million square feet of rentable space. Right now, each property is 50% owned.

Granite Park Six (in the Frisco/Plano area) is 12% preleased and scheduled for completion in Q4-23. And 23Springs (in Uptown Dallas) is 17% preleased and scheduled for completion in Q1-25.

Ted Klinck, president and CEO, stated:

“Today’s announcement is consistent with our long-term strategic plan of owning the highest-quality office buildings in the business districts of markets with favorable economic and demographic trends. With its strong, diverse, and growing economy, Dallas has been at the top of our list for future market expansion.
“We are excited about the opportunity to build and grow a strong presence in Dallas with our combination of proven development expertise, strong asset management platform, and highly-regarded brand.”

Seriously, you have to take a look at these incredible buildings. They’re a credit to their creators, their owners, and their tenants alike.

Author’s Note: If you do determine this stock is right for you, make sure to purchase it at a smart entry point. Even the best of companies can burn you badly if you buy in at inflated prices.

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.

Amazon Wants to Ask What Ails You

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

More Real Estate Data to Digest – If You Can

Brad Thomas

467 postsJuly 21, 2022

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More Real Estate Data to Digest – If You Can

467 postsJuly 21, 2022

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