iREIT Daily

Let’s Look at the Labor Market

Brad Thomas

467 postsJuly 7, 2022

In the last several years, employees have had their run of the job market. We all know it’s their field to play in these days.

Before the Covid-19 chaos erupted, unemployment numbers had reached record lows. Many companies were competing for top talent at the time.

It seemed all that progress was lost though when, in mere weeks, unemployment reached a fever pitch. Many businesses were forced to close, with some unable to ever reopen or otherwise recover.

But then another reversal came along, this time with the infusion of stimulus cash and the Paycheck Protection Program. Then, all of a sudden, the number of job openings far exceeded the number of people seeking work.

At first glance, this looks perfectly peachy for employees. Being in such high demand means they can negotiate higher pay, more benefits, and flexible work schedules. Many companies have adopted permanent work-from-home policies as well.

But for employers, it means higher costs of staying afloat, which means raised prices on everything – and therefore a heightened cost of living overall.

Like all things economic, the labor market is a balancing act. And while I do have to say we’re not anywhere close to being balanced right now, our current situation isn’t a bad one in terms of the recession we’re probably in store for.

This way, there will be options for those laid off – such as has been the case with companies like Tesla (TSLA) and Netflix (NFLX).

As of May, employers posted 11.3 million job openings, according to the Labor Department. This is just a slight decrease from the 11.7 million openings reported in April and the record-high 11.9 million job openings in March.

As The Wall Street Journal reports:

“Employers added 390,000 jobs in May, a robust gain but below the average pace of monthly job growth last year. And the unemployment rate held at a low 3.6%. The Labor Department will release its June employment numbers on Friday; economists surveyed by The Wall Street Journal think employers created 250,000 jobs last month and the unemployment rate held at 3.6%.”

I’d comment further from there, but with everything being as complex, complicated, and up-in-the-air as it is…

I think I’ll just leave it there and move on to our next subject at hand.

More Non-REIT News to Know About

For months now, air travel has been one of the iffiest methods of transportation around.

Amidst a national pilot shortage, flight cancellations have become the reported norm. With seamless travel looking like a thing of the past, every airline has seen a huge uptick in upset passengers.

As a result, many passengers expected increased delays, inconsistent service, and inconvenient cancellations this past holiday weekend. Thankfully though – and surprisingly – it wasn’t that bad all things considered.

U.S. airlines canceled about 1,400 flights during that stretch, which was about 1.5% of total scheduled flights. Almost 20%, meanwhile, were delayed – both of which were marked improvements over other major travel weekends this year.

As far as the labor market goes, the airline industry is one area where tight conditions can truly cause concern. As many airlines scramble for pilots, major brands like American Airlines (AA) are offering huge pay incentives.

Others plan to attract pilots with subsidiary companies that skirt pilot requirements. Which sounds a little more than disconcerting, I know.

In any case, America’s airline industry is due for a major course correction. Let’s hope Independence Day was a good indication that the chaos of summer travel may soon be under control.

I wouldn’t exactly bet on it, but you never know… It could happen!

The World According to REITs

Next up… cannabis real estate investment trusts (REITs)! They’ve been enjoying relaxed state laws and a growing contingent of eager customers.

Take NewLake Capital Partners (NLCP), which – like its peers – provides real estate capital to state-licensed cannabis operators. It’s quickly becoming a power player in the pot realm. Just yesterday, it announced $50 million in investments.

“We are excited to announce these transactions, where 98% of our capital commitment was funded at closing,” said CEO David Weinstein. “Through these… we have added a new publicly traded MSO Tenant partner, a new market to NewLake’s portfolio, and taken advantage of built-in growth in our portfolio.”

The two properties mentioned include:

A 38,000 square-foot cultivation facility in Pennsylvania for $14.5 million – for which it’s also providing $750,000 extra for tenant improvements
A $13.6 million 56,500 square-foot cultivation facility in Nevada, which represents new territory for NewLake.

Even so, this REIT still hasn’t found its footing on the ticker. Its stock has shed about 36% year-to-date despite its revenue rising 130% and net income spiking 243% year-over-year.

Everything considered, I rate NewLake Capital Partners as a Buy – though a speculative one.

Author’s Note: If you do determine this stock is right for you, make sure to purchase it at a smart entry point. Even the best of companies can burn you badly by buying in at inflated prices.

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.

So When You Say Recession…

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

Let’s Look at the Labor Market

Brad Thomas

467 postsJuly 7, 2022

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Let’s Look at the Labor Market

467 postsJuly 7, 2022

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