iREIT Daily

GDP Didn’t Get Mr. Market Down, But These Factors Are

Brad Thomas

467 postsOctober 29, 2021

Mr. Market clearly didn’t mind yesterday’s drastically disappointing news that the U.S. economy grew a mere 2%. Perhaps he figured that would stave off the Fed from tapering a little while longer?

Today though, as I check with him at 9:00, he’s feeling much more gloomy. There’s red across the board, but especially with the Nasdaq, which is down 134 points, or 0.85%.

Then again, by the time you read this, that might be old news.

Frankly, ladies and gentlemen, we’re dealing with a very bipolar creature this final quarter. And we need to treat it accordingly.

So what was the news that drove Mr. Market from one mood to the opposite? That appears to have been Amazon (AMZN) and Apple (AAPL).

Both reported earnings yesterday. And both disappointed investors – one of them intensely. I’ll quote MarketWatch to sum those situations up.

After citing supply chain issues as the reason behind the recorded woes, it writes:

“Apple reported a rare revenue miss – its first since the December quarter of 2018 – with revenue of $83.4 billion coming in $1.7 billion below analysts’ estimates of $85.1 billion for its fiscal fourth quarter… the bulk of the revenue shortfall came from iPhone sales, which came in $2.1 billion below analysts’ expectations. Sales of Macs and iPads, however, exceeded estimates…
“Amazon reported an even sharper-than-expected drop in earnings, with a huge surge in expenses, as it tried to shore up staff and [deal] with unprecedented supply-chain issues. Amazon’s costs to fulfill and ship orders increased to $18.5 billion from $14.71 billion. Amazon reported third-quarter earnings per share of $6.12, a drop of nearly 50% from the year-ago [quarter] and below analysts’ average expectations of $8.90 a share.”

Then again, the GDP numbers could have clued Mr. Market in about such things.

More Tech News and Defining “Stagflation”

Another tech-reliant company, IMAX (IMAX), did just fine last quarter considering everything. The movie-theater company reported $56.6 million in revenue, just under estimates of $57 million.

Not too shabby for a company that was supposed to have been completely collapsed by now.

I can’t say similarly positive things about China Evergrande Group making an overdue interest payment to some bondholders yesterday. That company isn’t making progress. It’s simply keeping its demise at bay – and just barely.

Oh, yeah, and Facebook (FB) officially changed its name. It’s now known as Meta, much to the mockery of many.

Neither last nor least, let’s explore stagflation, a term we’ve been seeing creep into our news feeds as of late.

Fox Business writes, “Those under the age of 40 probably don’t even know what that is – and they’ve certainly never experienced it up front and personal.” But stagflation is essentially slow economic growth combined with inflation.

The reason why the 40-and-under crowd probably doesn’t get it is because it hasn’t happened since the 1970s – back when the misery index was created to measure inflation and unemployment impacts.

I’ll stop using the article there, since some could see the rest as being pretty political. But just understand that this is the era we’re in at the moment.

And while U.S. Treasury Secretary Janet Yellen says the inflation part should only last through mid-2022… she was also one of the people who assured earlier this year that inflation wasn’t a problem at all. Or, at worst, merely a “transitory” one.

Essentially then, don’t hold your breaths about when things will really go back to “normal.”

The World According to REITs

Incidentally, the current market volatility makes for an especially good time to pay attention to your stock wish lists. You never know when your favorite real estate investment trust (REIT) is going to take a temporary fall…

Right down to your desired price point.

Who knows. That may have happened already for certain stocks considering the collection of missed earnings estimates the past day has revealed.

Not all of them missed, mind you. And of those that did, a miss could be by a mere penny, reducing mountainous headlines to mere molehills.

This is why I’ve cautioned before to always read the full story. And then, if possible, read another source too.

You never know what additional information you’ll find to steer you in a more profitable direction.

Speaking of such things, the Daily REITBeat is out until Tuesday, so I don’t have any charts to share. But here’s a short list of what real estate companies reported in the past 24 hours…

Weyerhaeuser (WY), Washington REIT (WRE), and Netstreit (NTST)…

Ladder Capital (LADR), Kite Realty Group (KRG), and LTC Properties (LTC)…

Gaming and Leisure Properties (GLPI), Camden (CPT), Apartment Income REIT (AIRC), and CTO Realty Growth (CTO).

Here are some of those details:

Netstreit was one of the ones that lagged a little in funds from operations (FFO) – but only by a penny at $0.25 per share. Admittedly, it hasn’t been able to surpass those estimates once in the past year. During the quarter, Netstreit purchased 26 properties for around $90.1 million with initial cash cap rates of 6.2%.
Gaming and Leisure Properties missed as well at $0.88 in per-share FFO instead of the expected $0.89. In Q2, it was a penny above. It made sure to point out that its four publicly traded tenants that make up almost all of its rent due “have significantly bolstered their balance sheets and enhanced their liquidity since the onset of the pandemic.”
Ladder Capital, for its part, beat earnings estimates of $0.10 per share by $0.04. Its cash and cash equivalents were down to $758 million for the quarter versus Q3-20’s $1.254 billion. But it’s “pleased to be on plan with strong origination volumes, a robust pipeline, and growing earnings.”
Camden reported FFO of $1.36, up a cent from expectations and $0.11 from last year’s showing. The company completed its scheduled lease-up of Camden Downtown in Houston, Texas, and acquired Camden Central in St. Petersburg, Florida, a 368-home apartment community, for $176.3 million.

As always, click here to get on the Intelligent REIT Daily list for more earnings and other updates. I think it will be worth your while.

Very much so, in fact.

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.

Own Blue Chips, Don’t Trade Them

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

GDP Didn’t Get Mr. Market Down, But These Factors Are

Brad Thomas

467 postsOctober 29, 2021

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GDP Didn’t Get Mr. Market Down, But These Factors Are

467 postsOctober 29, 2021

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