iREIT Daily

Apple’s Foxconn Searches for a New Home

Brad Thomas

467 postsMarch 15, 2022

Is Saudi Arabia the new China?

That possibility is farfetched, but not as farfetched as it was just last year considering current Foxconn negotiations.

You probably know that name as being Apple’s (AAPL) largest iPhone assembler – and a company with an extremely significant presence in China… which is becoming more and more of a liability.

Let’s start with how the Chinese government has been cracking down on a range of sectors – especially tech – for well over a year now. That means companies within them have to toe the party line or suffer the consequences.

The ongoing Evergreen Group’s woes also show there’s something structurally disconcerting about China’s economy. That enormous real estate conglomerate is so riddled with debt, nobody quite knows what to do with it. And it’s not alone in its financial suffering over there.

This is very problematic considering what a gigantic chunk of the Chinese economy real estate makes for.

Everything above has led to increased international concern about investing in the country. So has continuing Covid-19 measures, with Fox Business writing that China has locked down:

… two major cities, freezing production across a number of auto manufacturers and electronics factories – a move that threatens to further exacerbate the hottest inflation in four decades.
Beijing imposed a seven-day lockdown of Shenzhen, a key port city sometimes referred to as the ‘Silicon Valley of China’…

Where Foxconn is situated.

With no signs that China will back down on its zero-Covid policy anytime soon, it only makes sense that Foxconn is looking to invest elsewhere. And, clearly, Saudi Arabia is willing to give it space.

Specifically, the deal being discussed is to jointly build a $9 billion factory to make electronic parts and pieces. And Foxconn is also in discussions with UAE to host the same project.

More Non-REIT News to Know About

Speaking of China before we get back to tech news, Bloomberg ran this headline yesterday afternoon: “Panic Selling Grips Chinese Stocks in Biggest Plunge Since 2008.” It reads:

Chinese stocks listed in Hong Kong had their worst day since the global financial crisis, as concerns over Beijing’s close relationship with Russia and renewed regulatory risks sparked panic selling.
The Hang Seng China Enterprises Index closed down 7.2% on Monday, the biggest drop since November 2008. The Hang Sang Tech Index tumbled 11% in its worst decline since the gauge was lunched in July 2020, wiping out $2.1 trillion in value since a year-earlier peak.

Elsewhere in the world, markets were largely down as well – just not by as much. London’s FTSE tumbled 1.5%, while France’s CAC and Germany’s DAX lost 1.4% each.

Helping to drive the U.K. selloff was the Office for National Statistics’ admission that the country’s real regular pay fell 1% last quarter – its biggest drubbing since 2014. The Bank of England’s decision to increase interest rates this week doesn’t help in the short-term outlook either.

And as for the U.S., markets were “mixed” yesterday, with the:

S&P 500 falling 31.20 points, or 0.74%
Dow rising 1.05 points, or 0.00%
Nasdaq dropping, or 262.59 points, or 2.04%.

Oil fell as well – significantly so – to $102.14. That was a $7.19 tanking, or 6.58%, thanks to China’s shutdown-fueled reduced energy usage. And gold lost $29.10, or $1.47%.

The World According to REITs

Housing prices are still going up, and so is rent, as Yahoo Finance’s Morning Brief reminds us:

Rent growth, not just soaring energy prices, is doing its part to push inflation to a 40-year high and there’s little sign of it letting up. Rent inflation rose at a seasonally adjusted annual rate of 4.2% (highest since 2007) and an increase of 0.6% month-on-month (highest level since 1987), according to the Bureau of Labor Statistics’ Consumer Price Index (CPI).

Much of that, it adds, is due to continuing interest in four cities: Miami, Florida; Dallas, Texas; Denver, Colorado; and Phoenix, Arizona. Remember that as we keep following real estate investment trusts (REITs) this year.

As for this very moment, here’s what we know about such holdings:

Pennsylvania Real Estate Investment Trust (PEI) reported Q4 funds from operations (FFO) of $0.17 per share. Same-store net operating income (minus lease termination revenue) rose 52.% year-over-year. And, for 2021, it rose 26.4%. Occupancy improved 330 basis points year-over-year for the quarter, and its total core mall leased space was 94.3% while total core mall occupancy was 93.2%.
BRT Apartments (BRT) announced Q4 FFO of $0.35 and same-store NOI of $12.97 million, a 12.3% increase. For the full year, that latter calculation was $44.18 million, an 8.2% gain over 2020. The REIT added that its “entire portfolio increased same-store occupancy by 160 basis points to 95.3% and grew average monthly rent and related revenues by 2.7%.”
CorEnergy Infrastructure (CORR) saw Q4 results, including consolidated revenue of $35.8 million. Average transported crude oil volumes fell by 3.7%, though that was mitigated by the full weight of Q3 tariff increases. As management wrote, the company is now past its “pandemic-related challenges” and is “positioned for the future.”

Investors weren’t impressed with CORR’s news, however, as evidenced by yesterday’s market action.

(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.

Forget the Fed; We’ve Got Oil and “Elona Musk” to Talk About

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

Apple’s Foxconn Searches for a New Home

Brad Thomas

467 postsMarch 15, 2022

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