Dividend Cuts And Overdue Rent: REIT Earnings Recap

Summary

  • Did the rent get paid? Rent collection and dividend cuts were the primary themes of the most newsworthy and consequential REIT earnings season since the Great Financial Crisis.
  • Rent collection was largely a non-issue for residential REITs, who collected over 95% of April rents. Industrial, office, self-storage, and healthcare rent collection metrics were similarly strong.
  • Economic shutdowns ravaged the economically-sensitive property sectors and punished highly-levered REITs. 50 equity REITs - primarily retail and lodging REITs - announced a cut or suspension of their dividends.
  • 2020 was poised to be a solid year of growth for REITs prior to the pandemic. Even with a faster-than-expected reopening, fundamental metrics are likely to be the weakest since at least 2009.
  • Equity and Mortgage REITs have rebounded significantly in recent weeks, but sector-level selectivity remains especially critical. "Essential" sectors like residential, industrial, and technology will bifurcate from troubled sectors.
  • This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »

Real Estate Earnings Recap

Did the rent get paid? Rent collection and dividend cuts were the primary themes of the most newsworthy and consequential REIT earnings season since the Great Financial Crisis. In this Real Estate Earnings Halftime Report, we break down rent collection statistics for every property sector and analyze the recently released NAREIT T-Tracker data to review the REIT fundamentals over the past quarter and forecast what they could mean for the rest of 2020.

REIT earnings halftime report

(Hoya Capital Real Estate, Co-Produced with Brad Thomas)

Earnings season is now officially complete for the equity and mortgage REIT sectors with a few late-reporting stragglers reporting results this week. While the real estate sector is far from out of the woods - and several troubled REIT sectors are still very much in the thick of it - REIT earnings season was a pleasant surprise for many investors expecting the worst. Rent collection proved to be largely a non-issue for residential, industrial, and office REITs, as each sector has collected over 90% of April rents. Retail REITs, however, struggled to collect rent from "non-essential" tenants. We detail the rent collection from each individual REIT at the end of the report.

real estate earnings calendar

After a historically violent market plunge that saw the Equity REIT ETF (VNQ) dive nearly 45% and the Mortgage REIT ETF (REM) plunged an eye-popping 70% in a month's time, solid rent collection metrics and optimism about a faster-than-expected economic reopening have breathed new life into a sector that was seemingly on its death bed just two months ago with many pundits expecting a repeat of the Great Financial Crisis in which the broad-based REIT indexes plunged roughly 75% from its peak in February 2007 to its trough in March 2009 as seizing credit conditions caught over-extended REITs flatfooted. Equity REITs have

Hoya Capital Teams Up With iREIT

Hoya Capital is excited to announce that we've teamed up with iREIT to cultivate the premier institutional-quality real estate research service on Seeking Alpha! Sign-up for the 2-week free trial today! iREIT on Alpha is your one-stop source for unmatched Equity and Mortgage REIT coverage, Dividend ETF Analysis, High-Yield REIT Preferred Stocks & Bonds, real estate macroeconomic research, REIT and property-level analytics, and real-time market commentary.
hoya ireit ad

This article was written by

Hoya Capital profile picture
32.15K Followers
Build sustainable portfolio income with premium dividend yields up to 10%.

Real EstateHigh Yield Dividend Growth.

 Visit www.HoyaCapital.com for more information and important disclosures. Hoya Capital Research is an affiliate of Hoya Capital Real Estate ("Hoya Capital"), a research-focused Registered Investment Advisor headquartered in Rowayton, Connecticut. 

Founded with a mission to make real estate more accessible to all investors, Hoya Capital specializes in managing institutional and individual portfolios of publicly traded real estate securities, focused on delivering sustainable income, diversification, and attractive total returns. 

Collaborating with ETF Monkey, Retired Investor, Gen Alpha, Alex MansourThe Sunday Investor, and Philip Eric Jones for Marketplace service - Hoya Capital Income Builder. 

Hoya Capital Real Estate ("Hoya Capital") is a registered investment advisory firm based in Rowayton, Connecticut that provides investment advisory services to ETFs, individuals, and institutions. Hoya Capital Research & Index Innovations is an affiliate that provides non-advisory services including research and index administration focused on publicly traded securities in the real estate industry.

This published commentary is for informational and educational purposes only. Nothing on this site nor any commentary published by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. This commentary is impersonal and should not be considered a recommendation that any particular security, portfolio of securities, or investment strategy is suitable for any specific individual, nor should it be viewed as a solicitation or offer for any advisory service offered by Hoya Capital. Please consult with your investment, tax, or legal adviser regarding your individual circumstances before investing.

The views and opinions in all published commentary are as of the date of publication and are subject to change without notice. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Any market data quoted represents past performance, which is no guarantee of future results. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any outlook made in this commentary will be realized.

Readers should understand that investing involves risk and loss of principal is possible. Investments in real estate companies and/or housing industry companies involve unique risks, as do investments in ETFs. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital. An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes.

Hoya Capital has no business relationship with any company discussed or mentioned and never receives compensation from any company discussed or mentioned. Hoya Capital, its affiliates, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A complete list of holdings and additional important disclosures is available at www.HoyaCapital.com.

Disclosure: I am/we are long HOMZ, AMT, ARE, AVB, BXMT, DRE, DLR, EFG, EQIX, FB, FR, MAR, MGP, NLY, NHI, NNN, PLD, REG, ROIC, SBRA, SPG, SRC, STOR, STWD, PSA, EXR, AMH, CUBE, ELS, MAA, UDR, SUI, CPT, NVR, EQR, INVH, ESS, AVB, PEAK, LEN, DHI, HST, AIV, MDC, ACC, PHM, TPH, MTH, WELL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. All commentary published by Hoya Capital Real Estate is available free of charge and is for informational purposes only and is not intended as investment advice. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.

Hoya Capital Real Estate advises an ETF. In addition to the long positions listed above, Hoya Capital is long all components in the Hoya Capital Housing 100 Index. Real Estate and Housing Index definitions and holdings are available at HoyaCapital.com.

Recommended For You

Comments (74)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.