iREIT Daily

Let’s Talk About Russia and Ukraine Already

Brad Thomas

467 postsFebruary 22, 2022

I haven’t said much about the Russia-Ukraine crisis before, what with so many rumors running around. But I’ll go for it now considering how stocks are staggering under that news yet again.

Yesterday, Russian President Vladimir Putin deployed more troops into Ukraine. And U.S. and U.K. leaders promised to inflict significant sanctions on the oil-rich country as a result.

Sevens Report Research founder Tom Esssaye told Yahoo Finance that:

The reasons stocks are down on that news is… people fear that is the start of a full-on invasion of Ukraine. And if that happens, then we can expect a serious test of the January lows.

While Charles Schwab Chief Investment Strategist Liz Ann Sonders’ take is that near-term volatility isn’t the issue. It’s the longer-term impact:

We know in the past that surging oil prices, especially in a waning growth environment, alone, have caused recessions. You add… the energy crisis happening around the globe already and the fact we are now heading into a Fed tightening cycle, I think it would probably elevate fears about recession if, indeed, we see some sort of protracted military event.

Speaking of energy…

Government-assistance advocates HelpAdvisor told Fox Business that 24% of Americans cut back on food and medication in the last year. Why? To afford heating their houses.

The article adds:

About half of American homes use natural gas for heat, according to the U.S. Energy Information Administration. The recent Consumer Price Index shows those consumers are paying 23.9% more for natural gas than a year ago.
Prices for natural gas on the NYMEX have increased by about 44% over the last year, while storage of natural gas has slumped, 17.5% lower than a year ago, according to the EIA.

Not ideal, to say the least.

More Non-REIT News to Know About

Amidst all this, apartment rents just keep climbing thanks to the housing shortage.

Realtor.com released its Monthly Rental Report this week, which showed how unaffordable they’ve become. Last month, it turns out, it was cheaper to pay mortgage on a starter home than to rent.

Which, I’m sure, would motivate many a person into buying instead… Except that buying is so exceptionally difficult considering all the market factors I’ve mentioned before:

A decade-long lack of new supply
The work-from-home phenomenon
Inflation, which is devaluing the worth of so much, making real estate more attractive
Big-name companies buying up houses left and right, with the cash on hand to easily outbid the average Joe and Jane.

Put it all together, and that adds up to very high demand for apartments or houses to rent. Here are January’s highlights, according to the report (all quoted directly):

January 2022 marks the eighth month in a row where rent growth has reached double-digits for 0-2 bedrooms properties (19.8% [year-over-year]), pushing the median rent in the 50 largest metros to $1,789.
Rent by size: Studio: $1,476, up 21.0% ($256) year-over-year; 1-bed: $1,652, up 19.2% ($266); 2-bed: $2,000, up 19.2% ($323). This is a second consecutive month favoring price gains for smaller vs. larger units.
Rents continue to increase the most in the Sun Belt… growing by over 25% compared to last January.

For that last point, it specifically mentioned Miami, Tampa, Orlando, and Jacksonville, Florida; San Diego and Riverside, California; Austin, Texas; Las Vegas, Nevada; Phoenix, Arizona; and Memphis, Tennessee.

Meanwhile…

The World According to REITs

Four real estate investment trusts (REITs) reported earnings since I last wrote an “official” blog post. So here they are:

Healthcare Realty Trust (HR) announced Q4 normalized funds from operations (FFO) of $0.44 per share. Same-store cash net operating income (NOI) rose 2.7% year-over-year, not accounting for $0.3 million in deferred repayments. And portfolio leasing activity totaled 544,000 square feet from 145 new, renewed, and expanded leases. HR also used the quarter to purchase 19 medical office buildings (MOBs) for $298.2 million.
National Storage Affiliates Trust (NSA) recorded Q4 FFO of $0.64 per share and set 2022 guidance at $2.68-$2.74. Same-store NOI rose 21.7% year-over-year thanks to a 17.4% increase in affiliated revenue while those operating expenses increased 6.5%. Similarly, same-store NOI rose 19.8% for the full year, with a 15.1% uptick in same-store total revenue and a 4% bump in such property operation expenses. Occupancy was 94.8% as of December 31.
Sabra Health Care REIT (SBRA) saw Q4 FFO of $0.39 per share. It highlighted that it’s collected 99.6% of forecasted rent from the beginning of the shutdowns through last month. And February 2022 is looking good so far too. Last quarter, it sold four skilled nursing/transitional care facilities, two senior housing communities, and two hospitals. Combined gross proceeds were $85.9 million and, by year’s end, SBRA had about $1.1 billion of liquidity.
Sun Communities (SUI) announced Q4 core FFO of $1.31 per share and set 2022 guidance of $7.07-$7.23. Same-community NOI rose 8.4% year-over-year for the quarter and 11.2% for 2021. And acquisitions came in at $385.4 million during and since Q4 ended – including 12 RV resorts and seven marinas. Plus, SUI continued to expand on existing sites as well. As of December 31, mobile home and annual RV occupancy was a solid 97.4%, up 10 basis points (bps) compared to 2020.

Also courtesy of The Daily REITBeat, we have Friday’s numbers to display… which show that Power REIT (PW) was back in investors’ good graces, at least for the day.

(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.

Even When It Doesn’t Feel Like REIT Paradise at All…

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 Talk About Russia and Ukraine Already

Brad Thomas

467 postsFebruary 22, 2022

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Let’s Talk About Russia and Ukraine Already

467 postsFebruary 22, 2022

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