How Could an Interest Rate Hike Impact REITs?
Interest rates are inversely related to the REIT sector. A rise in interest rates has a two-fold impact on REITs.
In this article, we’ll compare Communications Sales & Leasing with its peers American Tower Corporation, Rayonier, Potlatch, and InfraREIT.
Communications Sales & Leasing has a market cap of $2.9 billion. Its year-to-date price movement has been falling quarter-over-quarter in 2015.
Store Capital’s peers outperformed the company based on PB value, whereas Store Capital was ahead of some of its peers based on PE as of November 12, 2015.
After its fiscal 3Q15 earnings report, Store Capital rose by 0.74% to close at $21.82 per share on November 12, 2015.
Digital Realty has outperformed its ETFs based on PBV ratio.The PBV ratios of Digital Realty, ICF, SCHH, and FTY are 3.5x, 2.5x, 2.4x, and 2.4x, respectively.
Digital Realty’s (DLR) stock has had its ups and downs in 2015. After the 3Q15 earnings report, DLR fell by 0.94% to close at $71.85 per share on October 29, 2015.
Duke Realty has outperformed its peers based on PE, PBV, and PS. The ETFs are way ahead of Duke based on PBV, but Duke has outperformed its ETFs based on price movement and PE.
Duke Realty reported net revenue of $234.5 million in 3Q15, an increase of 3.8% compared to $225.9 million in 2Q15. Net income and EPS decreased to $77.2 million and $0.22, respectively.
The price-to-sales ratios of Taubman Centers, Simon Property Group, General Growth, and Macerich are 7.95x, 12.35x, 10.30x, and 10.89x, respectively.
Taubman has a market capitalization of $4.7 billion. After its 3Q15 earnings report, it fell by 0.32% to close at $77.75 per share as of October 26, 2015.
Public Storage (PSA) shares closed the trading session on Friday, July 10, at $196.13, rallying 4.75% last week.
Ten-year bond yields influence everything from mortgage rates to corporate debt. It’s now the benchmark for long-term US interest rates.
Interest rates were very volatile as the European Central Bank made a big announcement regarding its own version of quantitative easing.
This week has some critical earnings reports in the homebuilder and REIT sectors, and the FOMC meets.
Capacity utilization was 79.7% in December—a decrease from the downward-revised reading of 80% in November. It bottomed out at 66.9% in 2009.
Commercial retail REITs such as Simon Property Group (SPG) and General Growth Properties (GGP) focused most on disappointing retail sales data on Tuesday.
This week has some critical economic data for the real estate sector, particularly the homebuilders and mortgage originators.
The headline retail sales number fell 0.9%—well below expectations of -0.1% Ex-autos sales fell 1.0%. Ex-autos and ex-gasoline retail sales were down 0.3%.
There were 4.97 million job openings in November, up 21% year-over-year. Those job openings came in above the Wall Street estimate of 4.85 million.