iREIT Daily

Greater Risks. Greater Rewards?

Brad Thomas

467 postsJanuary 10, 2022

“Goldman Now Expects Four Fed Hikes, Sees Faster Runoff in 2022,” a Bloomberg headline ran late last night.

The Federal Reserve will likely raise interest rates four times this year and will start its balance sheet runoff process in July, if not earlier, according to Goldman Sachs Group Inc. [GS].

I would imagine that many an investor won’t be happy to factor that into their portfolio calculations today. So I wouldn’t be surprised if we have another selloff.

Though that’s not to say I’m taking any official stances on that front. Even with the major indices all down as I type this, it’s not going to happen. Not in this unpredictable, illogical, que-sera-sera market we’re caught up in.

Lo que es ahora mismo (“what is right now,” according to Google Translate) is that the Nasdaq isn’t happy. It hasn’t been for months.

Jason Goepfert of SentimenTrader writes that:

Despite the Nasdaq Compositive hovering relatively close to its recent peak, nearly 40% of stocks on that exchange have been cut in half. Nearly two-thirds of them are in bear markets. This kind of behavior hasn’t been seen since at least 1999…

And Yahoo Finance adds this commentary:

Some of the largest tech sell-offs have been seen in momentum favorites among traders. Streaming media player Roku has seen its stock crash 40% in the past three months, according to Yahoo Finance Plus data. Biotech Modern is down about 30% during that same stretch.

Moreover:

The trading action doesn’t bode well for the Nasdaq this year, Goepfert’s research shows. When at least 35% of stocks are down by half on the Nasdaq, the index has been down by an average of 47%.

Yet, even now, younger investors are all-in for the risk, as I detail in the next segment.

More Non-REIT News

There’s so much I want to address this morning. But I’m going to set a lot of it aside in order to address the Schroders Global Investor Study 2021.

Titled “The Rise of the Risk Investor,” it covers how 2020 birthed “a new breed of retail investor.” The last two years, it accurately assess, have “been defined by extreme investment decisions, the rise of the meme stock, and a general eagerness for rapid returns.”

The study was conducted across “Europe, Asia, the Americas, and more,” covering “23,950 people who invest from 33 locations around the globe.” And here are its main takeaways:

37% “will allocate more [toward] high-risk investments, even if most will allocate more to savings or low-risk investments.”
“Many people have entered high-risk asset classes that are new to them in the past year.”
“Some investors are exhibiting extreme investing” behaviors.
“0% or negative interest rates” incentivize “risky investing. In this scenario, 53% of people would invest in high-risk assets in pursuit of returns…”

And, not surprisingly, that trend is much more marked in the 18-37 age range (44%) than the 38-50 (37%).

On that, I’ll just say to be careful, “young’ns.” I’ve been there and done that before, and it didn’t end well at all.

Moving on, we find that Facebook – i.e., Meta (FB) – just signed Austin, Texas’ biggest lease ever at a still-under-construction building, which will be the city’s tallest tower. To quote Fox Business:

Meta leased the entire portfolio of the commercial side of the 66-story high rise that will feature 349 residential units, from floors 34 to 66, the Austin Business Journal reported.
… Meta signed the lease on New Year’s Eve for 589,000 square feet, spanning across 33 floors of the skyscraper.

Apparently, Meta is “committed” to growth there.

The World According to REITs (and U-Haul)

Tech giants aren’t the only ones interested in Texas, of course. AP News reports that:

Migration to southern states continues to be magnified by the lingering pandemic. And no state netted more U-Haul customers during the last year than Texas.
The Lone Star State earned bragging rights as the leading growth state of 2021, narrowly besting Florida for [top] honors, according to transactional data compiled for the annual U-Haul Growth Index.
Tennessee ranks third, South Carolina fourth, and Arizona fifth among the top growth states.

California, incidentally, came in dead last.

In the middle of all this, we have another round of real estate investment trust (REIT) updates to address. These include end-of-year previews before earnings season begins next month.

Brixmor Property Group (BRX) acquired four shopping centers last quarter for $191.9 million and six for the year. Along with the outparcels, secondary plots, and leasehold rights, that amounted to $259.4 million. Brixmor also says it sold 17 shopping centers in 2021, generating $244.3 million in gross proceeds. And it has about $72 million in acquisitions under hard contract right now.
W.P. Carey (WPC) recorded $1.73 billion worth of investment volume last year, a record amount. Warehouses and other industrial assets made up 70% of its asset gains, with 60% of its total volume picked up in the U.S. and the rest in Europe.
Rexford Industrial Realty (REXR) signed 218 new leases involving 3 million square feet in 2022. It also renewed 268 involving 3.9 million. As of December 31, its properties were 99.1% occupied. And it sold 4.18 million shares through an at-the-market equity offering last quarter at an average $70.17 per share for a $293.3 million gross value.

Then, considering how the markets were last week, I’m featuring two charts down below. The first of which highlights how well some REITs did despite the bigger picture they were operating in:

(Source: The Daily REITBeat)

And then we have our normal compilation of the last trading day:

There’s always something to look at out there, especially these days.

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.

Dividend Growth Stock of the Week: Enterprise Product Partners

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

Greater Risks. Greater Rewards?

Brad Thomas

467 postsJanuary 10, 2022

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Greater Risks. Greater Rewards?

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