Another Day In REIT Paradise: All Eyes On Georgia
Dividend Growth Investing, REITs, Value
Seeking Alpha Analyst Since 2009
Brad Thomas is the CEO of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 100,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.
The WMR brands include: (1) iREIT on Alpha (Seeking Alpha), and (2) The Dividend Kings (Seeking Alpha), and (3) Wide Moat Research. He is also the editor of The Forbes Real Estate Investor.
Thomas has also been featured in Barron's, Forbes Magazine, Kiplinger’s, US News & World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox.
He is the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 (based on page views) and has over 108,000 followers (on Seeking Alpha). Thomas is also the author of The Intelligent REIT Investor Guide (Wiley) and is writing a new book, REITs For Dummies.Thomas received a Bachelor of Science degree in Business/Economics from Presbyterian College and he is married with 5 wonderful kids. He has over 30 years of real estate investing experience and is one of the most prolific writers on Seeking Alpha. To learn more about Brad visit HERE.
- That wasn’t the most positive way to start out the trading year, to be sure. To quote Yahoo again, “New year, same issues.”.
- My team and I have been saying for months that the market is overvalued, but I suppose it’s nice to see acknowledgement of that analysis.
- Throwing out the old calendar didn’t change anything. We’re still looking at illogical levels of euphoria in many stocks that will have further consequences.
Quote for Today:
“Make yourself so valuable in your work that eventually you will become indispensable.” – Og Mandino
“Overheated momentum stocks and rising political risks”: That’s what Yahoo! Finance blamed yesterday’s market “kerfuffle” on.
The Dow, S&P 500, and Nasdaq were all off more than 2% at certain points, though they closed “only” 1.2%-1.4% down by the closing bell.
That wasn’t the most positive way to start out the trading year, to be sure. To quote Yahoo again, “New year, same issues.”
My team and I have been saying for months that the market is overvalued, but I suppose it’s nice to see acknowledgement of that analysis. Throwing out the old calendar didn’t change anything. We’re still looking at illogical levels of euphoria in many stocks that will have further consequences.
Most REITs shouldn’t be suffering that same fate considering how they never participated in the rest of the market’s run-up. Nonetheless, compiling a list of yesterday’s prices results in a sea of red.
You can see in the next segment exactly how bad some of them fell. For now, let’s sum it up as being something significantly less than pretty.
Yet that negative sentiment and complicated economic environment isn’t stopping the best REIT management teams. (It’s not stopping a lot of mid-grade and even low-grade management teams either, for that matter.)
The next segment displays just a slice of what corporate landlords have been up to.
Oh, and before we get to that slice… A tech entertainment company called Epic Games is apparently buying up Cary Towne Center, a 980,000 square-foot shopping mall in North Carolina that fell out of favor as so many are. The plan is to change it into Epic Game’s corporate headquarters within the next three years.
I know I’ve mentioned how difficult it is to transform movie theaters into anything but other movie theaters. And that’s still true. But malls are more versatile, as we learned last year with Amazon’s offer to buy up former J.C. Penney and Sears spaces.
There’s still the unfortunate potential for massive property value write-downs in the process. But at least there’s still that option available for the most distressed mall REITs in our coverage universe.
As for the here and now, Bloomberg reported earlier this morning that:
"U.S. equity futures edged lower as traders braced for a key Senate runoff election and weighed the impact of rising coronavirus cases. The S&P 500 reversed an earlier gain, pointing to further declines after the benchmark suffered its worst drop at the start of a year since 2016.
“Tuesday’s run-off election for two U.S. Senate seats in Georgia is set to determine whether Democrats take effective control of Congress, seen as a tailwind to reflationary trades built around fiscal stimulus.”
Meanwhile, “In Europe, stocks dropped after the UK imposed its third national lockdown to prevent hospitals being overwhelmed.”
We’ll be watching the Georgia results closely at iREIT on Alpha. As proof that we’ve been on top of that situation, we published an exclusive article yesterday highlighting “what long-term midstream investors need to know about the Georgia Senate Runoffs.” That includes how a “short-term weakness in this space could represent one of the final great buying opportunities ahead of an epic 2021 midstream rally.”
Oh, and over in the apartment sector, I’m in the process of editing an iREIT on Alpha article on United Dominion Realty (UDR).
Stay tuned! There’s more hard-hitting analysis and recommendations on the way…
The World According to Commercial Real Estate
As promised up above, here are some of those daily news nuggets that can help you monitor and grow your portfolio:
- Agree Realty (ADC) released a summary of its record investment activity in 2020, including an update on its Q4 activity and December rent collection. For the latter, it received 99% of expected lease payments, having to settle for deferrals for less than 1% of its tenants. As such, it will be going back to offering a monthly cash dividend this month. In addition, it expects to make between $800 million and $1 billion in acquisitions this year, with a disposition guidance of $25 million to $75 million.
- Hersha Hospitality Trust (HT) signed a binding sales agreement for its 245-room Courtyard San Diego. The $64.5 million price tag means it will book a net gain of about $5.4 million, with the full proceeds destined to pay down its credit facilities.
- Power REIT (PW) acquired two properties in Crowley County, Colorado, which amount to 4.21 acres in all. It immediately signed on The Grail Project for a 20-year, triple-net lease on the condition that it will fund an approximately 21,732 square-foot greenhouse and processing facility right away.
That last listing is the kind of action – and an interview with the CEO – that led me to treat iREIT on Alpha members to a Power REIT upgrade last week. We also bought shares in the Small-Cap portfolio.
Shares have already surged 6.7%, and we plan to provide our members with another update this morning.
(Source: Daily REITBeat)
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