iREIT Daily

The News That Rocked the Markets

Brad Thomas

467 postsFebruary 11, 2022

Since inflation was the name of the game yesterday, let’s get right to it.

The Bureau of Labor Statistics released its Consumer Price Index (CPI) numbers for January on Thursday. And everyone knew it wouldn’t be good.

Analysts were calling for a 7.3% year-over-year increase, which would have been excessive enough. But when it came out that it was 7.5% – the biggest jump since 1982 – the markets lost it, taking the:

S&P 500 down 83.10 points, or 1.81%
Dow down 526.47 points, or 1.47%
Nasdaq down 304.73 points, or 2.10%.

It didn’t help how economists expected the CPI to decline month-over-month, while it actually rose as well by 0.6%. As Yahoo Finance’s Emily McCormick writes:

The report served as one of the clearest affirmations that inflation – described as recently as November by the Federal Reserve as ‘transitory’ – has become a persistent feature of the economic recovery. And for many economists, the further jump in prices in January serves as additional fuel to the argument that the Fed must hasten to pivot away from accommodative monetary policies and tighten financial conditions to help bring down elevated prices.

That’s definitely how investors read into it. And Deutsche Bank economists agree, saying they expect two more quarter-point hikes than they were predicting before the news broke. They now forecast a 50 basis-point rate hike to be announced in March.

If that does happen, it would be the first time the Fed made such a move since 2000 – a fairly clear signal that, in line with analyst criticism for weeks now, the central bank is starting from behind.

All told, while the CPI also showed that average hourly pay grew 0.6% month-over-month and 5.3% year-over-year, that’s before inflation.

After that economic toll is taken, this number falls to 1.3%.

More Non-REIT News to Know About

Biden addressed the report directly, saying:

On higher prices, we have been using every tool at our disposal. And while today is a reminder that Americans’ budgets are being stretched in ways that create real stress at the kitchen table, there are also signs that we will make it through this challenge.
While today’s report is elevated, forecasters continue to project inflation easing substantially by the end of 2022.

Great Britain, meanwhile, just reported that its economy grew 7.5% last year, easily topping other G7 countries’ figures. No matter though, since its FTSE 100 dropped 0.9%.

So did Germany’s DAX, for that matter, while France’s CAC closed down 1.2%.

In individual stock news, Expedia (EXPE) announced an adjusted Q4 profit of $167 million – up intensely over Q4-20’s $376 million loss. Gross bookings climbed 131%, lodging revenue rose 116%, and total revenue was 148% higher at $2.28 billion.

And Zillow (Z) reported as well. As one MarketWatch headline notes, it “… lost more than $230 million in its iBuying fire sale, but the stock is still surging.”

The lengthy subline reads, “Zillow sells more than 8,300 homes in fourth quarter, averaging a loss of more than $27,000 apiece. But wind-down of iBuying business leads to record revenue and a beat on earnings forecast.”

Peloton (PTON), however, just can’t catch much of a break. As my daughter, Lauren Thomas, reported at CNBC the other day:

Peloton held a virtual all-hands meeting Wednesday that was meant to introduce its new CEO, Barry McCarthy. Instead, a conversation between McCarthy and former CEO John Foley ended early, according to three people familiar with the details of the meeting.

That was because “current and former employees started firing off angry comments” about recent jobs cuts with additional accusations about mismanagement.

The World According to REITs

We’ve got another eight real estate investment trust (REIT) earnings reports to choose from today. Though it really wasn’t difficult to narrow down which ones to feature in today’s blog…

Federal Realty Trust (FRT) announced Q4 funds from operations (FFO) of $1.47 per share. And it raised its 2022 guidance by $0.10 to $5.75-$5.95. That’s after signing 116 leases for 597,673 square feet of comparable space in the quarter and a record 462 for 2.1 million square feet for the full year. The portfolio was 91.1% occupied at the end of the year and 93.6% leased, a 90 basis-point (bps) boost quarter-over-quarter.
Corporate Office Properties Trust (OFC) posted Q4 FFO of $0.58 per share with 2022 guidance of $2.30-$2.38. It closed 2021 with its portfolio being 92.6% occupied and 94.4% leased. And its same-property cash net operating income (NOI) rose 0.5% over Q4-20 and 1.2% for the full year. OFC leased 1.2 million square feet in Q4: 701,000 from renewals, 196,000 from new tenants, and 263,000 from projects in development.
Alpine Income Property Trust (PINE) saw Q4 FFO of $0.42 per share and gave guidance of $1.53-$1.58 for 2022. It purchased 26 net-lease retail properties during the three-month period for $101.6 million with a 6.2% weighted average going-in cash capitalization rate. And for the full year, those figures were 68, $260.3 million, and 6.8%, respectively. It also issued 761,902 common shares under its at-the-market program for total net proceeds of $2.8 million.
W. P. Carey (WPC) announced Q4 adjusted FFO (AFFO) of $1.30 per share with guidance of $5.18-$5.30 for 2022. It collected 99.8% of rent due for the fourth quarter and ended the year with 98.5% occupancy. Investment volume was $531.8 million for the quarter and $1.72 billion for the year. And it issued 464,449 shares under its ATM program during the quarter for net proceeds of $37 million.

You’ll probably notice below, then, that Preferred Apartment Communities (APTS) jumped. A lot. During a bad market day.

That’s because there are now rumors circulating that it will be acquired sometime soon. In which case, investors want to get in while they still can.

(Source: The Daily REITBeat)

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.

Place Bets On The Super Bowl, Not 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

The News That Rocked the Markets

Brad Thomas

467 postsFebruary 11, 2022

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467 postsFebruary 11, 2022

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