Very Good News For REIT Investors

seekingalpha07-13

REITs have been in a bear market for two years.But we recently had some excellent news that suggests that REITs could soon recover.I present some of my favorite opportunities to buy today. DNY59 The...

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DNY59 The...</p>\n\n<a href=\"https://seekingalpha.com/article/4702999-very-good-news-for-reit-investors\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Very Good News For REIT Investors</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nVery Good News For REIT Investors\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-13 19:45 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4702999-very-good-news-for-reit-investors><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>REITs have been in a bear market for two years.But we recently had some excellent news that suggests that REITs could soon recover.I present some of my favorite opportunities to buy today.   DNY59 The...</p>\n\n<a href=\"https://seekingalpha.com/article/4702999-very-good-news-for-reit-investors\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0314104364.USD","symbol_name":"MANULIFE GF AMERICAN GROWTH \"AA\" (USD) INC","start_time":0,"source_url":"https://seekingalpha.com/article/4702999-very-good-news-for-reit-investors","article_id":"2451754966","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/483863347/image_483863347.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2451754966","pubTimestamp":1720871100,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"REITs have been in a bear market for two years.But we recently had some excellent news that suggests that REITs could soon recover.I present some of my favorite opportunities to buy today.   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DNY59 The real estate investment trust, or REIT, sector enjoyed some very good news over the past month, and it leads us to believe that the window of opportunity could be closing soon. Firstly, many central banks started to cut interest rates. Canada, the Eurozone, Switzerland, Hungary, Sweden, and the Czech Republic have already cut their rates, and England is expected to follow with its first cut in August. I think that this is a strong signal for what to expect in the US as well. The Fed will likely take a bit longer to start cutting rates, but the direction is clearly towards lower rates, and this should be a strong catalyst for the REIT sector. The Fed chair Jerome Powell just said at an event last week that we had made \"remarkable\" progress in bringing inflation down and that they were seeing clear signs of a \"resuming disinflationary trend.\" The independent, private sector inflation measurement of Truflation also shows US inflation under 2% at this point, and the debt market is pricing a 60% chance of a cut in just two months from now, and a 93.3% chance of at least one cut by the end of this year: TruflationFed Watch  The second piece of good news is that the private equity powerhouse KKR (KKR) announced a week ago that it would acquire a multi-billion-dollar apartment portfolio from Lennar (LEN) in its biggest purchase of apartment buildings ever. They commented that now is a \"great moment to invest in real estate\" because new supply is expected to slow down significantly in the near term, which should result in an acceleration in rent growth. We are very heavily invested in apartment REITs, so I take this as good news. KKR has a wonderful track record investing in hated assets at bargain valuations and if they are choosing to invest in apartments, it probably means that we are doing something right. Moreover, they are paying over $400,000 per unit for this portfolio, and many of our apartment REITs are today trading at just about half of that. The upside could be very significant as rent growth accelerates and interest rates are cut in the near term:   BSR REIT  BSR REIT Finally, Blackstone (BX), participated at a conference a couple of weeks ago and made remarks which seem to imply that they will acquire more REITs in the near term: [emphasis added]  So real estate is a simple business. It's just about supply and demand. And if you stop building and the economy keeps growing out a few years, you will get real shortages, and you'll have rents really pop and you'll make a tremendous amount of money. So I've seen in this movie numerous times... It provides amazing opportunities for us because we're the best-capitalized real estate buyer in the world. We have more money and we are not shy to use it. When prices get beat down and the world asks the same question like, oh, my goodness. You're in real estate. Must be terrible. And we look at it now and say, well, geez, this is like bottom land. And we've been buying pretty aggressively now... We've already done a number of big deals this year, and we'll be net buyers for some time. So our attitude towards real estate is quite positive. And can you imagine being down 60%, 70% in construction in good areas? I mean this is how you really make money in real estate.  Keep in mind that these comments are coming after they already announced two major REIT acquisitions earlier this year, They first acquired Tricon Residential (TCN) and Apartment Income REIT (AIRC) and we profited from both transactions in our Investing Group. Now, it appears that we are likely to see more M&A activity, which is just another catalyst that should help the market sentiment of the REIT sector. Just last week, we reported that our biggest retail investment, Whitestone REIT (WSR), had become the target of M&A. That pushed its share price a lot higher even without a deal actually occurring:   Whitestone REIT If REITs continue to trade at a steep discount relative to the fair market value of their assets, we are likely to see more buyouts as interest rates are cut, and transaction activity picks up. It is not just Blackstone, but also KKR, Fortress, MCB Real Estate, Oak Street, GIC, KSL Capital Partners, and a number of other private equity sharks that are circling REITs right now. This is all good news because it gives credibility to our own analysis and also provides a catalyst for future upside realization.   Blackstone & KKR  So I will keep accumulating more shares week after week, just like we have done so far. I will also keep posting Trade Alerts as I make new investment decisions, but right now, I have the following REITs high on my list:  SBA Communications (SBAC): SBAC is now officially the cheapest cell tower REIT in the US, even cheaper than Crown Castle (CCI), and the company is busy buying back shares. It has crashed due to its higher leverage, but this also means that it should benefit the most from rate cuts. SBAC is also a unique REIT in that it retains nearly 70% of its cash flow, and this is an underappreciated advantage in today's higher cost of capital environment. We believe that the company should deliver double-digit total returns from its yield and growth alone, and that it should enjoy ~50% additional upside as interest rates are cut in the coming years.  RCI Hospitality (RICK): RICK has kept dipping lower due to poor same-property performance, the lack of new club acquisitions, and more recently, fears related to allegations that the company was recently raided by the IRS. The company has not provided any updates and this is causing some investors to worry. The good news is that the valuation has now dropped so low that the company does not need to acquire new clubs. It can simply use its large pile of cash to aggressively buy back stock. Moreover, the lack of disclosure relating to the allegations seems to imply things are in order. I started buying at around $15, saw the share price rise all the way to $100, and will gladly buy more if it dips below $40 per share.  Rexford Realty (REXR): REXR is one of our favorite industrial REITs right now, and we plan to make it a large position if it remains at these discounted levels. Its rents are expected to be increased by ~50% as its leases gradually expire, providing a predictable path to growth. Once its rents have been brought back to market levels, REXR will be trading at a high single-digit implied cap rate unless its share price expands to higher levels. Therefore, we think that it is very likely that its shares will enjoy strong upside in the coming years.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2451754966"}