iREIT Daily

What Did You Say, Mr. Powell?

Brad Thomas

467 postsJune 30, 2022

Another day, another dollar. So the saying goes.

As far as I’m aware, that’s supposed to be a dollar made. But in 2022, there’s no guarantee of any such thing. And even when it does go into our pocket, it’s bound to come back out with far less pricing power.

I’ve said this before across various platforms, and I’ll say it again. The markets make no sense, including when it comes to how they react to the Federal Reserve.

Sometimes, we’re told, they “shrug off” whatever remarks or movements the Fed or other Central Banks make. And sometimes, they crash and burn.

Yesterday was much more of a “shrug,” as The Wall Street Journal notes:

“U.S. stocks rose on Wednesday as investors digested comments from central bankers at a panel in Europe that provided insight into their views on the economy, inflation, and the path of monetary policy.
“The S&P 500 added 0.2% after the broad-market index closed down 2% on Tuesday. The Dow Jones Industrial Average was up 0.5%, while the Nasdaq Composite Index rose less than 0.1%.”

That was after Fed Chair Jerome Powell spoke at a panel for the European Central Bank’s annual economic policy conference in Portugal. That’s where he explained how there might not be an easy way out of our inflationary situation.

He hopes that’s not the case. “We think… there are pathways for us to achieve the path back to 2% inflation while still retaining a strong labor market.” But it’s “going to be quite challenging.”

That’s pretty contrary to what he’s been saying for months. But, hey, what do we expect at this point from someone who insisted that inflation was “transitory” for three-quarters of last year?

It is what it is. It will be what it will be. And we have to learn how to adapt with what we’ve got.

More Non-REIT News to Know About

Just three years ago, Mark Tritton took the reins of home goods titan Bed, Bath & Beyond (BBBY). It was a rough time to take over. Yet he’s since helped the company weather the shutdowns and cull its coupon-driven product line for a private-label launch.

Let’s recognize those efforts for what they’re worth – even if they’re probably going to prove that they’re not worth enough.

At first, doing away with national brands and ushering in a product line of proprietary goods seemed like a good idea. Sadly though, time is telling otherwise.

After several months in a slump, the retail chain reported another quarter of dismal earnings. Sales plunged by 25% year-over-year, while net losses widened to $358 million from $51 million.

Bed, Bath & Beyond’s share price has now slipped more than 55% year-to-date… and almost 80% in the last 12 months. As such, its board just ousted Tritton at the request of multiple investors.

Sue Grove, the company’s new interim CEO, says, “The customer wants to see more of an optimal balance of national brands, direct-to-consumer brands, and company-owned brands. So we’re focused on improving the category mix.”

Will that new focus be able to save it? The answer is up in the air for the time being.

But one bit of advice to Ms. Grove: Everyone seems to love air fryers these days. Don’t lose out on those!

The World According to REITs

Sure, Bed Bath & Beyond may be having a hard go of it. But generally speaking, the retail world seems to be doing surprisingly well.

As I reported yesterday – and despite increased inflation, shipping delays, and product shortages – American consumers are still turning up for the summer shopping season.

One real estate investment trust (REIT) that’s benefitting from this resilience is Phillips Edison & Co. (PECO). It’s one of the nation’s largest owners and operators of grocery-anchored shopping centers with an array of tenants including:

Grocery store Publix
Sprouts Farmers Market (SFM)
Walmart (WMT).

It’s ranked #1 in the retail sector with an overall score of 74 by analysts at InvestorsObserver. They look at both short- and long-term indicators to weigh it against the entire stock market. So when they give it a 74, that means it’s looking better than 74% of other stocks.

And apparently they’re not alone in that evaluation, since PECO’s shares are up over 22% for the year.

In terms of retail REITs, this one is certainly on the right track. With premium fundamentals, excellent analyst rankings, and a rock-solid valuation, this purveyor of grocery stores could really improve any portfolio.

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

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.

Welcome to Reality – Which Way Will It Go?

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

What Did You Say, Mr. Powell?

Brad Thomas

467 postsJune 30, 2022

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What Did You Say, Mr. Powell?

467 postsJune 30, 2022

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