The Real Estate Reaction: Gauging the Impact of the Fed’s Rate Hikes
The rising interest rate is expected to boost the economy in the long run, but it could severely impact sectors like real estate.
Simon Property Group’s Key Business Segments
Simon Property is the only REIT in the S&P 100 Index and has heavy asset concentration on the US east coast and in the central US.
USMV: A Passive Smart Beta Fund with Active Management
The iShares MSCI USA Minimum Volatility ETF (USMV) tries to mimic the performance of the MSCI USA Minimum Volatility Index. It includes US stocks with low volatility.
Extra Space: Healthy Demand, Marketing Strategies to Drive Q3
Extra Space Storage (EXR) is expected to report its Q3 2018 results on October 30. Wall Street expects AFFO of $1.19 per share.
Where Extra Space Stands among Its Peers after Q2 Results
Extra Space is trading at a premium compared to CubeSmart and Life Storage and at a discount to Public Storage.
Acquisitions, Joint Ventures Expand Extra Space’s Footprint
Acquisitions have helped Extra Space (EXR) expand its domestic footprint. It has acquired properties worth $4.5 billion in the last five years.
Extra Space’s Growth Driven by Demand and Marketing Strategies
Extra Space has adopted digital marketing platforms, including social media and search engines, to drive traffic at its facilities.
Can Extra Space Storage Beat Analysts’ Q2 Estimates?
Extra Space Storage (EXR), set to report its Q2 results on July 31, could continue to benefit from self-storage demand rising.
How Wall Street Analysts View Extra Space
Analysts gave EXR a mean price target of $87.93, implying an ~1.5% rise from its current level of $86.72. It has a market capitalization of ~$10.9 billion.
Extra Space—Valuations on Par with the Industry
EXR’s FFO per share for 2017 is expected to be $4.32–$4.65.
Extra Space and Its Solid Balance Sheet
EXR increased its fixed debt ratio to 80.0% in 3Q17 from 76.1% in 2Q17.
Extra Space’s Occupancy Rate and Other Growth Factors
EXR’s occupancy rate in 2Q17 was 94.5% compared to 94.1% in 2Q16.
Boston Properties Could Ride High on These Factors
Boston Property (BXP) has strong business momentum and has been maintaining a decent growth trajectory for the past few years.
How Wall Street Analysts Rated the Top 3 Self-Storage REITs after 2Q17
Extra Space Storage’s (EXR) analyst target price is $81.13, up 7% from its current price level.
Comparing the Valuations of 3 Leading Self-Storage REITs after 2Q17
Public Storage (PSA) trades at an EV-to-EBITDA multiple of ~21.5x.
Chart in Focus: Self-Storage REITs’ 2Q17 Balance Sheets
CubeSmart issued two notes of $50.0 million each, carrying interest of 4.4% and 4.0% and maturity dates of 2023 and 2025, respectively.
Overview of Self-Storage REITs’ Development Activities in 2Q17
During 1H17, CubeSmart acquired two properties located in Maryland and California worth $21.9 million.
How the Top 3 Self-Storage REITs Managed Their Expenses in 2Q17
Although Public Storage did not provide any guidance for net operating income expected during fiscal 2017, analysts expect the company to report flat YoY NOI of ~$2.0 billion during 2Q17.
Comparing the Top 3 Self-Storage REITs after 2Q17 Earnings
Self-storage REITs are experiencing solid growth in income and revenues in 2017. In this series, we’ll analyze the 2Q17 results for Public Storage (PSA), Extra Space Storage (EXR), and CubeSmart (CUBE).
A Post-2Q17 Comparison of the Top 3 Healthcare REITs
Healthcare Trust of America (HTA) is the most premium among our top three healthcare REITs in terms of price-to-FFO multiple.
How Healthcare REITs Rewarded Stockholders in 2Q17
REITs are required to pay 90.0% of their profits to shareholders in the form of share buybacks or dividends.
Healthcare REITs and Their 2Q17 Capital Deployment Strategies
Welltower spent $292.0 million on development and expansion in 2Q17. Of that, $110.0 million was spent on acquisitions.
Healthcare REITs and How They Managed Expenses in 2Q17
Healthcare REITs fund their working capital through debt and equity. So it’s important to optimize their spending in order to maximize income.
What’s Ahead for the Top 3 Healthcare REITs?
Strong performance in skilled nursing facilities prompted Welltower management to increase its same-store net operating income guidance for fiscal 2017.
Top-Line and Bottom-Line Results for Healthcare REITs in 2Q17
Healthcare REITs have positioned their properties in premium locations where there’s high income growth.
Top 3 Healthcare REITs after 2Q17: A Comparative Analysis
Healthcare REITs that own senior care facilities, hospitals, and nursing homes are seeing growth. With the aging population rising, the need for critical healthcare facilities is also rising.
How Analysts View Public Storage
Analysts have assigned PSA a mean price target of $217.67, which is 4.9% higher than its current price level.
Where Public Storage Stands among Other Major Players
Public Storage has consistently been able to return capital value as well as shareholder returns in the form of dividends and share buybacks.
Public Storage and the Growing US Economy
Public Storage (PSA) is expected to witness a higher cost of debt in 2Q17, mainly due to the Fed’s rate hikes in 2017.
Inside Public Storage’s 2Q17 Battle with Macro Headwinds
Public Storage (PSA) is expected to post flat top-line and bottom-line results in 2Q17.
What’s Really Driving Public Storage’s Expected 2Q17 Upbeat Results
Wall Street expects PSA to report adjusted FFO (funds from operation) of $2.40, compared with $2.54 in 2Q16.
Will Public Storage’s Cost-Reduction Initiatives Drive Higher NOI in 2Q17?
Wall Street analysts expect Public Storage (PSA) to report NOI (net operating income) of $483.7 million for 2Q17.
Will Public Storage Ride High on Top Line in 2Q17?
Wall Street expects Public Storage (PSA) to report revenue of $667.9 million for 2Q17. Its earnings call will be on July 27, 2017.
What Lies Ahead for Public Storage in 2Q17
Analysts expect PSA to report adjusted FFO (funds from operation) of $2.40, compared with $2.54 in 2Q16.
Where Public Storage Stands Compared to Its Peers
The value of an REIT such as Public Storage (PSA) is commonly measured by using its price-to-FFO (funds from operations) multiple.
How Public Storage Maintains Its Balance Sheet
REITs such as Public Storage (PSA) distribute at least 90% of their taxable incomes to shareholders in the form of dividends and share repurchases.
Public Storage: A Rewarding Stock for Shareholders
Public Storage (PSA) has regularly rewarded its shareholders in the form of quarterly dividends. The company has paid a dividend in every quarter since 1981.
How the Pro-American Environment Boosts Self-Storage
In a higher household income scenario, people tend to spend more on acquiring properties and need more storage space. This need boosts demand for self-storage facilities.
Can Public Storage Survive the Interest Rate Hike?
REITs will likely be significantly affected by rising interest rates. Rising mortgage rates will increase the cost of purchasing investment properties.
Focus on Quality Helps Public Storage Maintain Occupancy
Public Storage (PSA) puts a great deal of focus on the development and redevelopment of its existing facilities. Recently, there’s been a trend of rising rent for self-storage facilities.
Public Storage Is Expected to Ride High on Robust Revenue Growth
Macroeconomic factors such as high rent and demographic changes have resulted in high demand for self-storage facilities.
Public Storage: A Self-Storage REIT with Room to Grow
Rent growth has moderated, but it remains at record highs. In such a scenario, consumers prefer apartments whose rents are affordable. This is where self-storage REITs come in.
How Wall Street Analysts View Simon Property Group
Analysts gave SPG a mean price target of $202.45, implying an ~25.1% rise from its current level of $161.78.
Can REITs Like Simon Property Group Survive the Fed’s Interest Rate Hikes?
The hawkish interest rate environment has added to the woes of mall owners like Simon Property (SPG), as well as the REIT industry.
How Would an Interest Rate Hike Affect Real Estate Valuations?
The real estate sector’s (VNQ) (IYR) performance was subdued in 2016 due to its supply-demand dynamics.
How Would Negative Interest Rates Impact REITs?
A fall in interest rates makes REITs more attractive dividend-yielding investments compared to bonds. This is because REITs have been traditionally viewed as dividend-yielding investments.
House Prices Continued to Rise in November
With increasing home prices, builders might increase the home supply. Due to lower mortgage rates, more customers could be attracted to the housing sector.
Specialized REITs: Value Drivers
Specialized REITs and residential REITs within IYR generated positive returns of 0.2% and 9%, respectively, on a yearly basis.
Specialized REITs: The Unsung Heroes
With the growing economy and global investment horizons, investments have shifted beyond the traditional options to specialized REITs.
A Comparative Analysis of ICF’s Market Performance
ICF tracks the performance of the realty subsector through the average performances of its holdings.
What Should Investors Expect from the REIT Market?
While the higher volatility has affected the broader indices during the past two months, the impact was more evident on REIT stocks.
Labor Shortage in the Construction Industry Hits Contractors
The labor shortage in the construction sector can be attributed to many factors. For example, workers who lost their jobs during the housing crash have moved to other sectors.
REIT Capitalization Rates Fall as Prices Surge
Average capitalization rates in 2Q15 fell to 7.5% across all the property types compared to 8.35% in 2Q14.
Simon Property Group’s Lease Length Exposure
Only 1.2% of Simon Property’s gross annual revenues from inline or freestanding stores comes from month-to-month leases. 6.5% of leases will expire in 2015.
Simon Property Group’s Acquisition Growth Strategy
Simon Property has a strong track record of aggressive acquisitions. Since its IPO in 1993, the company has completed acquisitions worth $40 billion.
Simon Property Group’s Retail Mall Business
Simon Property’s US properties consist of malls, premium outlets, community centers, and retail properties that make up ~182 million square feet of GLA.
REIT ETFs Offer an Alternative Investment Option
REIT ETFs offer one of the alternative investment options for investors seeking exposure to commercial real estate. REIT ETFs take exposure mainly into REIT stocks.
What Sectoral Equity REITs Are Available to Investors?
Equity REITs dominate the REIT market. They account for almost 90% of the total market capitalization of all the REITs. They include specialized REITs.
Why Did REITs Come into Existence?
US REITs came into existence in 1960 when President Eisenhower signed the REIT Act contained in the Cigar Excise Tax Extension.