The Daily REITBeat | Friday, November 15th, 2024

"No Rush"

There will be no Daily REITBeat Newsletters next week as I’m on the road for NAREIT. Next “scheduled” daily publication will be week of Thanksgiving.

Good Morning!

Dow futures down around 125 points at the time of this writing as talking heads focus on Chairman Powell’s comments yesterday in Dallas where he signaled that the Fed is in no rush to lower interest rates and 10-year hovers near 4.45% currently.

From Bloomberg

"US futures fell after Jerome Powell signaled the Federal Reserve was in no rush to cut interest rates, and unease built over the composition of President-elect Donald Trump’s cabinet.
Contracts for S&P 500 pointed to a second day of declines on Wall Street, with Nasdaq 100 futures down 0.8%. Drugmakers Moderna Inc., Novavax Inc. and BioNTech SE came under pressure in New York premarket trading after Trump named a prominent vaccine skeptic to a top health-policy role. Domino’s Pizza was a prominent gainer after news that Berkshire Hathaway had taken a stake in the restaurant chain.
The S&P has now ceded roughly one-third of the trough-to-peak gains notched after the US presidential election, as some of the optimism over corporate growth under Trump fades. There’s also growing acceptance that US interest rates will fall less quickly than anticipated, with recent data showing still-elevated inflation pressures and Powell confirming the Fed may take its time easing policy.
After a very strong run for trades linked to Trump’s policy pledges, “there’s been a realization that there is a price to pay for this,” said Charles-Henry Monchau, Chief Investment Officer at Banque Syz & Co. “It will come at the expense of potentially larger budget deficits, potentially larger debt and there is also the inflation dimension.”"

In REIT News

BMO upgrades IRT to Market Perform from Underperform (raise price target by $2 to $21)
Deutsche Bank downgrades ARE to Hold from Buy (lower price target by $23 to $112)
DRH acquired the fee simple interest in the 245-room AC Hotel Minneapolis Downtown for $30 million (~$122K/key) with cash on hand which represents a 8.2% capitalization rate on the Hotel’s forecasted 2024 net operating income and brings the total number of properties in the Company’s portfolio to 37 hotels
EGP announced an update on its recent business activity commenting that 1) In November, the Company acquired Riverpoint Industrial Park, which contains three industrial buildings totaling 779,000 sf in Atlanta, for approximately $88,000,000. This property was developed in 2020 and is 100% leased to six tenants. This acquisition increased the Company’s ownership of operating properties in Atlanta to approximately 2,246,000 sf, which is currently 98.1% leased; 2) scheduled to close on a property containing four industrial buildings, which are currently 100% leased in the Dallas market, for approximately $77,000,000; 3) As of November 13, 2024, its portfolio was 96.3% leased and 95.7% occupied. During the fourth quarter of 2024 to date, 1,208,000 sf of new and renewal leases were signed with rental rate increases averaging 53.1% on a straight-line basis and 30.9% on a cash basis; and 4) During the fourth quarter of 2024 to date, the Company sold 876,709 shares of common stock directly through its sales agents under its continuous common equity offering program at a weighted average price of $174.22/share, providing aggregate net proceeds to the Company of approximately $151,000,000. In addition, during the fourth quarter of 2024 to date, the Company entered into forward equity sale agreements with respect to 642,740 shares of common stock with an initial weighted average forward price of $175.12 per share and approximate gross sales proceeds of $113,000,000, based on the initial forward price
In an 8-K filing, NXRT announced that Brian Mitts is resigning as Chief Financial Officer, Executive VP-Finance, Secretary and Treasurer of the company effective December 31st and will continue to serve as a member of the Board of Directors while the Board appointed Paul Richards as the Company’s Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary effective January 1, 2025
EQC announced that its Board of Trustees has authorized an initial cash liquidating distribution of $19.00 per common share which will be paid on December 6, 2024 to shareholders of record on November 25, 2024 plus updated the estimated aggregate shareholder liquidating distribution range of $19.50 to $21.00 per common share disclosed in its definitive proxy statement filed on October 2, 2024 to an estimated aggregate shareholder liquidating distribution range of $20.00 to $21.00 per common share
Yesterday, Fitch Ratings affirmed HST and its limited partnership’s Long-Term Issuer Default Ratings at “BBB” with a stable outlook
Yesterday, Moody’s affirmed CDP’s “Baa3” issuer, backed senior unsecured and senior unsecure shelf ratings and revised its outlook to positive from stable
Yesterday morning, REXR announced an operating activity update commenting that 1) in the fourth quarter of 2024 to date, the Company executed approximately 657K sf of new and renewal leases, with an average size of 16K sf, including approximately 422K sf of renewal leases and 235K sf of new leases; 2) comparable rental rates on new and renewal leases increased by 80% compared to prior rents on a net effective basis and by 60% on a cash basis; 3) average annual rent steps were 3.9% for leases executed quarter to date; and 4) as of October 31, 2024, year-to-date Same Property Portfolio average occupancy was 96.8% and ending occupancy was 95.9%, in line with its third quarter 2024 guidance outlook
Yesterday morning, VTR priced an underwritten public offering of 10.6 million shares of common stock in a forward sale agreement raising gross proceeds of $677 million (~$63.87/share) and intends to use the net proceeds for working capital and other general corporate purposes, which may include funding acquisitions and investments or repayment of existing indebtedness, and to pay fees and expenses related to the offering

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David Auerbach & Mary Jensen

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David Auerbach
dauerbach@irrealized.com
214.492.3777

David Auerbach boasts over two decades of experience in the securities industry, specializing as an institutional trader with a focus on Real Estate Investment Trusts (REITs), Equity and Preferred stocks, MLPs, ETFs, and Closed End Funds.

Based in Dallas, TX throughout his entire career, David currently serves as the Chief Investment Officer for Hoya Capital, managing the Hoya Housing 100 ETF (Ticker: HOMZ) and The High Yield Dividend ETF (Ticker: RIET).

Previously, David held the position of Managing Director at Armada ETF Advisors, the sub-advisor for the Residential REIT ETF (Ticker: HAUS) and The Private Real Estate Strategy via Liquid REITs ETF (Ticker: PRVT). Additionally, he acts as a consultant with IRRealized, LLC, focusing on corporate access in the REIT industry.

David's industry journey includes roles at World Equity Group, Esposito Securities, and Green Street Advisors where he got his start in the REIT industry. At Esposito Securities, he played a crucial role in building the REIT/Real Estate platform and worked extensively with institutional investors, Equity REITs, and ETF issuers.

Throughout his career, David has been quoted by reputable publications such as Bloomberg, WSJ, Financial Times, REIT.com, and GlobeSt.com. He has also made notable appearances as a featured guest on networks like Yahoo Finance, TD Ameritrade, and Bloomberg.

David holds a BBA in Finance from the University of Texas at Austin (May 1999) and an MBA in Finance from Southern Methodist University (May 2005). He maintains FINRA Series 7, 24, 55, and 63 registrations.

In his leisure time, David is an avid traveler, often found crisscrossing the country in pursuit of attending as many Phish concerts as possible.

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