Another Day In REIT Paradise: Another Day, Another Dollar

Summary

• No matter how crazy-normal or just plain crazy things get, there’s always going to be REITs worth pursuing.
• As I reported in yesterday’s blog, we have a full menu of C-suite interviews to record and debut this week at iREIT on Alpha.
• Today, for instance, I’ll be speaking with Taylor Pickett, CEO of Omega Healthcare Investors and Ivan Kaufman of Arbor Realty in two separate calls.
• Yesterday, I interviewed Kimco Realty CEO Conor Flynn, where he very helpfully explained the REIT’s mezzanine lending platform.

Quote for the Day:

“A U.S. dollar is an IOU from the Federal Reserve Bank. It's a promissory note that doesn't actually promise anything. It's not backed by gold or silver.” – P. J. O'Rourke

(Source: Photo – by Lake Thun in the Swiss Alps)

Am I the only one who feels like they’re getting used to the market’s melodrama?

It starts up in the early morning, pops at the open, turns south a few hours in, and then ends enormously up or down, or intensely mixed. But so what?

Ho. Hum. Another day. Another dollar.

So the fact that the main indexes are down as I write this a bit after 9:00 – with the Nasdaq deflated over 200 points – doesn’t necessarily mean anything. By the time you read this, it might be up 1.67% instead.

Nonetheless, let’s discuss what happened exactly with yesterday’s market action, quoting Investopedia’s The Market Sum e-letter in the process:

“U.S. equity markets split again as the DJIA closed flat for the day, while the S&P 500 fell 0.77% and the tech-heavy Nasdaq tumbled 1.5% on heavy volatility. Shares of Apple (AAPL), Amazon (AMZN), and Tesla (TSLA) led the declines again for the mega-caps; and as they go, so go the cap-weighted indexes.

“We are starting to get used to this pattern of Dow stocks rising as tech stocks have been losing traction. It’s been the theme since the beginning of the year, but it is becoming amplified the more Treasury yields rise. The yield on the 10-year U.S. Treasury hit another 13-month high this morning [i.e., Monday morning] as the economy strengthens. But as it does, big investors have been rotating out of tech and into financials and energy stocks.”

It then goes on to write, “as Treasury bond yields press higher and start to close the gap between the S&P 500’s dividend yield, the frothy stock market may look a little less attractive.”

Investopedia’s overall conclusion, however, is like that of every other analyst out there right now. Ultimately, the strength of the U.S. economy hedges on the virus, the stimulus, and whether we’re in store for more re-openings or more shutdowns.

Again, same-old, same-old.

Likewise, I know you’ve heard me say this next part more than once. With that said, I’m perfectly fine pounding the pulpit on this one as many times as I need to…

No matter how crazy-normal or just plain crazy things get, there’s always going to be REITs worth pursuing.

The World According to Commercial Real Estate

As I reported in yesterday’s blog, we have a full menu of C-suite interviews to record and debut this week at iREIT on Alpha. Today, for instance, I’ll be speaking with Taylor Pickett, CEO of Omega Healthcare Investors (OHI) and Ivan Kaufman of Arbor Realty (ABR) in two separate calls.

Yesterday, I interviewed Kimco Realty (KIM) CEO Conor Flynn, where he very helpfully explained the REIT’s mezzanine lending platform:

“We also have launched our preferred equity and mezzanine financing initiative. And we do think that's a real nice avenue for growth for us because there's a lot of product out there that we would like to own, but it's not for sale. But they are looking for financing.

“And so, the traditional sources of financing have pulled back a little bit and we can come in a position, get high single-digit [or] double-digit type of returns on our equity, and then get a right of first refusal, right of first offer in the future on a property that we know we'd like to own and add to our portfolio.”

(Source: iREIT on Alpha)

iREIT members are really enjoying this content, as it gets them close to management and provides exceptional insight into the value behind each business featured. And that’s on top of “regular” access to one of the most diverse REIT research platforms on the planet, including a daily dose of REIT news powered by the Daily REITBeat.

Today’s compilation includes updates on how:

• Essex Property (ESS) priced $450 million of 1.70% senior notes due 2028. It plans to use the proceeds from that offering to repay upcoming debt maturities, as well as to fund other general corporate and working capital projects and necessities.
• W. P. Carey (WPC) priced €525 million of 0.95% senior notes due 2030 with the intention of putting proceeds toward redeeming its 2.000% senior notes that are due 2023, for general corporate purposes, to pay down debt, and to fund potential future acquisitions.
• Power REIT (PW) signed a new lease agreement with its existing tenant, The Grail Project LLC, to expand a 6,256 square-foot property the cannabis manufacturer is already working. Power REIT’s capital commitment related to the expansion is approximately $517,000 for an annual straight-line rent increase of about $105,000.

The latter, incidentally, didn’t make yesterday’s top 10 movers. But that’s okay with us.

(Source: The Daily REITBeat)

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They’re designed to give you the kind of insider information that puts people ahead of the game. Just think about all the possibilities to profit from when you’re not in the middle of the rat race anymore…

Author's note: Brad Thomas is a Wall Street writer, which means he's not always right with his predictions or recommendations. Since that also applies to his grammar, please excuse any typos you may find. Also, this article is free: written and distributed only to assist in research while providing a forum for second-level thinking.