iREIT Daily

How Much News Can One Investor Take?

Brad Thomas

467 postsDecember 17, 2021

There were points and parts yesterday that definitely seemed optimistic. That was especially true considering how the markets seemed so accepting of the Fed’s decision on Wednesday afternoon.

But that ultimately didn’t happen, as evidenced by the following numbers:

S&P 500 – down 41.18 points, or 0.87%, to 4,668.67
Dow – (barely) down 29.79 points, or 0.08%, to 35,897.65
Nasdaq – (intensely) down 385.15 points, or 2.47%, to 15,180.43
Russell 2000 – down 42.75 points, or 1.95%, to 2,152.46.

That negative trend has continued into this morning’ futures trades. Which piece of news they’re reacting to is difficult, if not impossible, to determine.

In my increasing opinion, there’s no getting into the mind of this market. We just have to follow it through with our investing values intact.

If we do, I think we’ll get to keep our dollars – and probably even our sanity along the way. Remember that as you consider the following economy-impacting information that’s emerged over the past 24 hours…

U.S. manufacturing output rose 0.7% month-over-month in November, pretty much as expected, after gaining 1.4% in October. And manufacturing activity fell from a 58.3 reading in November to 57.8 mid-month, its lowest point since last December.

Economists had expected to see it sitting a bit higher at 58.5.

On the plus-side, anything over 50 does indicate growth. Data firm IHS Markit has seen improvements in supply chain delays. And job creation did speed up somewhat.

Perhaps that’s because big companies like Hobby Lobby are finally finding the sweet-spot incentives to entice people back into the workforce. That arts and crafts store just announced it will offer full-time starting per-hour pay of $18.50 as of January 1.

In which case, prices will continue to rise.

Cost-Cutting Moves and China Concerns

No doubt, pay raises are involved in the tentative deal reached between Kellogg (K) and 1,400 of its employees. That strike seemed to have ended earlier this month after management said it couldn’t afford further negotiations.

But then came comments from the White House… and now it looks like employees could return after Christmas.

Meanwhile, Chipotle (CMG) is making a cost-cutting move with its first digital-only establishment opening in Ohio. Nobody will man the registers or clean tables there because there won’t be any registers or tables offered.

Customers will place their orders online and pick them up in person or have them delivered.

Expect more cost-cutting measures at China Evergrande too, which – along with its offshore financing arm Tianji Holding – is now in default according to S&P after failing “to make coupon payments for their outstanding U.S.-dollar senior notes.”

Moreover, the entities in question have done nothing to address the status of that debt. And it’s now being sued for $13 billion+ by creditors.

These developments led Morning Brief editor Javier E. David to write this morning that Evergrande:

… is a stark reminder that while China isn’t quite falling apart, it’s not exactly an island of stability either.
In fact, Deloitte’s fourth-quarter CFO Signals survey, released on Thursday, found that finance chiefs are getting gloomy about what 2022 has in store for the global economy – and China is a particular worry after a surprisingly sluggish 2021.
The firm’s data found that 45% see North America as better, compared to 54% in Q3. Meanwhile, only 27% think China will be better, which is down from a whopping 55% last quarter. Currently, Deloitte found that ‘29% of CFOs see current conditions as good or very good, a significant decline from 52%’ in the Q3.

Quite the fall indeed.

The World According to REITs

Hold on though. Because there’s even more “reactable” news to address before we get to our real estate investment trusts (REITs).

Like how Morgan Stanley (MS) told many of its New York-area employees to stay home until the new year. That’s especially interesting considering how insistent it was about bringing people back earlier this year.

But CEO James Gorman now says he expects the virus to continue causing workplace issues through most of 2022.

I know there are colleges out there that are also returning to online-only classes. But I will say this: I maintain that the average citizen is growing increasingly ready to move on, as even narrowly re-elected New Jersey Governor Phil Murphy recently admitted.

I’m going to return for one more minute to the Nasdaq now. Its fall is being blamed on the Fed’s Wednesday announcement… despite how it supposedly couldn’t care less when the news first broke.

Who knows. Maybe that’s true. Maybe both are true. There’s always some speculation that has to happen when analyzing the markets and our opportunities in them.

Still, I’d prefer to stick to the facts as much as possible, including the following:

Urstadt Biddle Properties (UBA) announced Q4 funds from operations (FFO) of $0.37 per share. Same-property net operating income (NOI) rose $1.9 million, or 9.1%,year-over-year. And 92.1% of its gross leasable portfolio area was leased as of October 31, up 1.6%. It did see a 4.9% average decrease in base rental rates on new leases but an average 9.4% increase on lease renewals.
RPT Realty (RPT) acquired the Highland Lakes shopping center in Palm Harbor, Florida – a Tampa-area purchase – for $15 million. It’s also in the process of finalizing a new lease with an investment-grade grocer to take over previously vacant space.
Four Corners Property Trust (FCPT) strikes again, this time by buying a Maryland property for $1.6 million. The tenant, National Tire and Battery, has five years left to its lease.

Finally, I’d say “Ouch!” about Independence Realty Trust’s (IRT) fall as shown below. But let’s face it, we’ve seen bigger downside moves than that this year overall.

Again, it’s all about knowing the facts and reacting to them accordingly.

Which means putting panic in its proper place.

(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.

Overcoming Fear and Greed in the Stock Market

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

How Much News Can One Investor Take?

Brad Thomas

467 postsDecember 17, 2021

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467 postsDecember 17, 2021

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