iREIT Daily

Could a Cartel Work? That Question Is Now Being Considered

Brad Thomas

467 postsJune 10, 2022

It’s June, which means vacation for many of you readers. Though the following will be relevant even for those of you who will be working the whole 30 days long…

These last few months have been especially infuriating for those on the road. With gas prices surging over these first two quarters, the frustrations associated with filling a tank of gas are enough to drive even the most meek mild-mannered motorists into madness.

Currently, the U.S. is averaging nearly $5 per gallon of regular unleaded – and $5.75 for a gallon of diesel. These prices represent a nearly 50% increase from March of last year.

They’re also the highest our country has ever seen.

Aside from the personal pain of pumping the better part of a $100 bill into our tanks, increased gas prices have affected the entire economy since everything touches a truck at some point. And as shipping costs increase, corporations are passing those expenses to the consumer.

This not only drives up the price of living but ultimately weakens the dollar.

I know that. You know that. And the government is beginning to fully acknowledge that as well now. The Wall Street Journal reports:

“Treasury Secretary Janet Yellen said this week that the U.S. was involved in ‘extremely active’ talks with European allies about efforts to form a buyers’ cartel and set a cap on the price of Russian oil.
“‘I think what we want to do is keep Russian oil flowing into the market to hold down global prices and try to avoid a spike that causes a worldwide recession and drives up oil prices,’ Ms. Yellen said. ‘But absolutely the objective is to limit the revenue going to Russia.‘”

So what is a buyers’ cartel exactly? Is the U.S. about to cut a deal with South American drug runners and start controlling the prices of limes and avocados?

Fortunately, it’s not that kind of cartel. What she’s referring to is essentially an alliance of competing buyers who unanimously refusing to buy until certain terms are met.

The intention is to force Russia to sell its oil at a fixed price. Though China and India are unlikely to comply in this deal, significantly lessening the intended affect.

Knowing that, another idea is to leverage insurers from European countries to levy sanctions on all oil leaving Russia. This could effectively bring down the price of oil not only in Russia but also its allied countries such as the two previously mentioned trading partners.

Keep in mind that “could” is the key word though. I don’t want to give any false hopes here.

And regardless, with so many moving pieces, I wouldn’t expect a final resolution anytime soon. Until then, just close your eyes at the pump.

More Non-REIT News to Know About

Surprise. Surprise. The stock market fell yesterday ahead of today’s inflation report.

That information is out today now – and worse than expected. Quoting Yahoo Finance this time:

“For market participants, the Bureau of Labor Statistics’ release of the Consumer Price Index (CPI) was a key print, offering a fresh look at the extent to which price increases have persisted across the U.S. economy. The index unexpectedly accelerated to post an 8.6% annual increase in May, following April’s 8.3% rise. That marked the biggest jump since late 1981, and took out the prior 41-year high set in the March CPI, which rose 8.5%.
“On a month-over-month basis, CPI also jumped by 1.0%, or more than the 0.7% rise expected and April’s 0.3% increase. Core inflation, which excludes volatile food and energy prices, increased 6.0% on an annual basis after April 6.2% increase.”

Perhaps expecting that – and the Fed’s upcoming reaction to it – the S&P slipped 0.7%, the Dow dipped 0.4%, and the Nasdaq fell 0.9% yesterday. And they’re looking to extend those losses today.

European markets weren’t too keen on the possibilities either. The pan-continental Stoxx Europe 600 closed down nearly a point and a half as the euro fell 0.7% against the dollar yesterday.

Speaking of that area of the world, the European Central Bank announced it would increase its key interest rate from -0.5% to zero or higher. This will begin as quarter-percentage increases starting July 1.

It’s looking to be quite the summer this year… before the summer even officially begins.

The World According to REITs

For nearly a month, Prologis’(PLD) hostile acquisition of Duke Realty (DRE) has been the talk of the REIT world. That’s why many investors showed up to a Wednesday session at REITweek: to see if some tea would be spilled.

Instead, they got dead silence on the subject.

Duke CEO Jim Conor deflected inquiries about the prospective acquisition, saying, “We’ve said all that we have to say on that, and we firmly believe that the ball is Prologis’ court.”

Prologis, for its part, didn’t provide investors with so much as a whisper of a discussion, dismissing any inquiries before its presentation. It even began by declaring talk of the merger as “no-man’s land.”

Okay then.

This is certainly one of the more hostile bids we’ve seen in the REIT sector so far – and one that must be carefully considered as our economic climate grows ever more uncertain. I have to say it was really responsible of both parties involved to keep a lid on it, especially during such a raucous event like REITweek.

But when the news does finally break? I know I for one will be excited to report on the terms.

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.

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

Could a Cartel Work? That Question Is Now Being Considered

Brad Thomas

467 postsJune 10, 2022

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Could a Cartel Work? That Question Is Now Being Considered

467 postsJune 10, 2022

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