iREIT Daily

The Reality We Face as Russia Attacks Ukraine

Brad Thomas

467 postsFebruary 24, 2022

Well…

I was collecting news stories yesterday for this morning’s blog. But those are largely out the window thanks to what we learned this morning.

Russia has, in fact, invaded Ukraine.

As I write this non-bright and early at just after 5:00 a.m., it’s no surprise to see futures down between 1.84% and 2.31%. And yes, it’s the Nasdaq that’s slid the most. Cryptocurrencies, both big and small, are almost entirely down as well.

While I could be wrong, I don’t expect to see a single bit of green today outside of perhaps war-related stocks. Gold is finally getting its due as well. And oil?

Well, that’s almost certainly going to stay skyrocketed.

Already, Americans are paying prices at the pump they haven’t seen in practically a decade. Which, again, will almost certainly get worse from here.

Considering where this blog is going – further into negative territory – I’m going to pause here to reiterate everything I said in yesterday’s blog, including this:

If the company’s fundamentals remain strong, its prospects remain solid, and its price isn’t at risk of completely crashing – as in, it’s only dipping 5%, 10% or, at most, 25% from the high it’s hit since you bought in – then it’s very likely worth holding onto. There are no guarantees, of course…
But that rule of thumb has led to much more profitable outcomes than jumping in and out of the markets.
So stay steady, even while you read scary stories…

That includes Ukrainian Minister of Foreign Affairs Dmytro Kuleba acknowledging that “Putin has just launched a full-scale invasion of Ukraine. Peaceful Ukrainian cities are under strikes. This is a war of aggression.”

Putin, for his part, called it “a special military operation” since a “confrontation with” Ukraine “is inevitable.”

More Non-REIT News to Know About

In response, Biden announced he’ll impose sanctions on the 764-mile-long natural gas Nord Stream 2 pipeline, which flows from Russia to Germany – a reversal of his decision to waive them last May.

Germany itself already declared it would cancel the pipeline’s certification process. Which, right move though that might be, we do have to acknowledge that Europe – which is experiencing exceptionally elevated energy prices as-is – will suffer further from here in that regard.

We also have to acknowledge Goldman Sachs’ note to clients late Tuesday about the U.S.’ estimated 4.6 million worker shortage – the most since World War II. As Fox Business reports, its economists say that accounts for “the total number of available jobs… and the size of the labor force.”

As a result, Americans’ incomes are rising across the board as employers have hiked wages in an increasingly competitive market to hire new workers. The Goldman economists said they expect employers to face an even tougher and more expensive year finding workers. Wages are expected to climb 5% in 2022 as companies fight for talent.

Which means so will inflation, as companies pay for those higher wages by up-charging their customers. Forbes adds:

An unexpected and sustained surge in consumer prices has started to impact a wider array of goods and services than has been typical in past inflationary periods – a sign that rising prices will likely linger for months to come, Goldman Sachs warned Tuesday.
In a Tuesday evening note to clients, Goldman’s chief economist, Jan Hatzius, said recent inflation “looks more concerning” now because of the extent to which prices have risen and the growing breadth of core inflation, which excludes volatile food and energy prices to better gauge a consumer’s long-term purchasing power.

So is there any good news at all to hold onto?

The World According to REITs

At this point, I’d like to point you to this same date in 2020, where the markets were also tanking… and destined to slide some more as Covid-19 panic took hold.

In which case, the good news is that we survived that round… with every likelihood that we’re going to survive this one too.

Just be sure to stay steady, sane, and smart.

Our real estate investment trusts (REITs) are certainly going about business as usual – no matter their current (and no doubt temporary) price drops. Sixteen of them reported earnings, including the following four:

American Tower (AMT) brought in Q4 adjusted funds from operations (AFFO) of $2.18 per share. It acquired 20+ data centers and related assets in the quarter through its CoreSite Realty deal. And it spent about $20.8 billion for the full year on almost 33,000 communication sites and affiliated purchases. As of December 31, its balance sheet featured approximately $6.1 billion of total liquidity.
Innovative Industrial Properties (IIPR) recorded Q4 AFFO per share of $1.85. For the full year, it invested $714 million into buying up land and facilities, expanding or improving previous purchases, and agreeing to fund further projects. Since this included 37 new properties, it now boasts 103 in all, amounting to 7.7 million rentable square feet in 19 states. The REIT also had around $406 million in cash, cash equivalents, and short-term investment as of December 31.
Store Capital (STOR) announced AFFO of $0.56 per share for Q4 and raised its 2022 guidance from $2.18-$2.22 to $2.18-$2.22. It invested $486.2 million in 100 properties at a 7.2% weighted average initial cap rate during the quarter. And the full-year numbers were $1.5 billion, 336 properties, and 7.5%, respectively. Meanwhile, its weighted average non-cancelable remaining lease terms (minus renewal options) averaged about 13.4 years as of December 31.
VICI Properties (VICI) reported Q4 AFFO of $0.44 per share and set 2022 guidance at $1.80-$1.84. It expects its MGM Growth Properties (MGP) acquisition to finalize by the end of June and its Mirage purchase to finalize in the second half of the year. The REIT had about $5 billion in liquidity at year’s end after spending $21.3 billion on acquisitions and investments – which came with a 5.9% weighted-average initial yield.

Of course I had to feature those four here, but there were plenty of other big-name REITs to sort through this morning. Three of those were, naturally, published in today’s Intelligent REIT Investor.

We’ve also got the Daily REITBeat graphic below. Shockingly enough, it doesn’t show a sea of pure red recorded yesterday.

We’ll see if we can say the same thing tomorrow.

(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.

Here Is My Secret Sauce Revealed

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 Reality We Face as Russia Attacks Ukraine

Brad Thomas

467 postsFebruary 24, 2022

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