iREIT Daily

Growing Like a Weed

Brad Thomas

467 postsApril 21, 2021

I really do try not to get political in here. But considering how politics are encroaching on what we do and how we do it more and more and more, I’m just going to go for it today.

And, no. Don’t worry. I’m not going to talk about THAT topic. It’s fortunately much less divisive than what you’re probably automatically thinking of as you read this.

I’m only referring to cannabis.

You could say that the legalized marijuana story in the U.S. began in 1973 when Oregon decriminalized it, charging offenders just $100 if they were caught with an ounce or less. The first state to then actually allow it in any form (as far as I can tell) was California in 1996, when it approved medical usage.

November 2012 next saw the states of Colorado and Washington legalize it. And ABC reported mere weeks ago how, “In the last four months, five states have legalized recreational marijuana, meaning now 30% of the country allows its adult residents to possess and use cannabis.”

I’m not going to argue whether that’s good or bad, only that it is and will continue affecting real estate.

Remember when I noted the other day how often industrial real estate investment trust Power REIT (PW) is in the news? It’s on an absolute roll buying up new properties and signing new leases with legal, licensed marijuana growers in various states.

Meanwhile, Axios reported last night that:

“The legalization of weed may be giving an assist to the commercial real estate industry, according to a member survey by the National Association of Realtors.
“Why it matters: More states legalizing weed equals more demand for space to store, grow and sell it.”

In addition:

“Over one-third of respondents in states where weed has been legalized the longest cited the marijuana industry as one of the many reasons why real estate inventory was tight.
“In states where weed was legalized more recently, 23% partially blamed the industry for limited inventory.”

In which case, that is going to prompt more commercial real estate demand, from apartment complexes to grocery stores to net-leased properties for fast-food restaurants to cater to people who have “the munchies.”

That’s not supposed to be a joke any more than previous comments are supposed to be political. This is the reality we’re living in today, and it is affecting the kinds of businesses we invest in.

So let’s keep our eyes open and our minds ready to react when the inevitable real estate plays make themselves known. This could be an enormous secular trend in the making, and I don’t intend to ignore it.

The World According to Commercial Real Estate

Power REIT managed to not make the headlines in the last 24 hours. But we do have some ratings news to report:

Extra Space Storage (EXR) received an upgrade from Investor’s Business Daily, which bumped its Relative Strength Rating from 68 to 72 yesterday. That means it’s outperforming 72% of stocks – not just real estate investment trusts – and puts it that much closer to the 80 mark, which IBD considers very noteworthy.

“Over 100 years of market history reveals that stocks that go on to make the biggest gains typically have an RS Rating north of 80 in the early stages of their moves,” it writes.
Invitation Homes (INVH) saw Fitch give it a BBB issuer default rating, while S&P assigned it a BB-, both with stable outlooks. That makes it an investment-grade stock either way.
Moody’s affirmed Kimco (KIM) and Weingarten Realty’s (WRI) individual Baa1 ratings with stable outlooks in response to their merger announcement.

And here’s two other pieces of REIT news to make up for The Daily REITBeat’s absence this week:

Kilroy (KRC) says its limited operating partnership amended and restated its unsecured revolving credit facility from $750 million to $1.1 billion. The actions taken also reduced its borrowing costs and extended the loan’s maturity date to July 31, 2025, with two possibilities for six-month extensions.
Empire State Realty Trust (ESRT) signed on Zentalis Pharmaceuticals at its 1359 Broadway office building. Zentalis, a cancer-focused biopharmaceutical company will now take up 31,362 square feet of that property, with more to possibly come since CEO Dr. Anthony Sun specifically mentioned continuing expansion efforts in New York City.

While I hardly believe that last part is proof that Big Apple REITs are going to be miraculously fine from here… I do think it’s safe to say that, contrary to popular opinion, they’re not rotten to the core.

I’ll even go so far as to declare that, yes, I still expect to have my pie and eat it too after everything is said and done. Apple pie, of course.

Maybe even ala mode.

Happy Investing

Brad Thomas

467 posts

View all my Posts

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.

Hail the New Year’s First Round of Earnings Reports!

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

Growing Like a Weed

Brad Thomas

467 postsApril 21, 2021

Featured Articles

The Great Housing Market Migration Is VERY Interesting

Let Dividends Help You Deal With Disappointment In The Stock Market

Amazon Wants to Ask What Ails You

Wall Street’s Workforce Crisis Should Be Taken Seriously

Santa Claus Has Left the Building

Growing Like a Weed

467 postsApril 21, 2021

REIT Mutual Funds

REIT ETFs

Not All Dividends Are the Same