Vanguard REIT ETF

The great American deleveraging has largely been limited to the financial sector (XLF) (IYF). Non-financial debt is still much higher than historical averages.

There are several reasons why the gloomy GDP estimate is not cause for panic. The slowdown in GDP growth seems to be a temporary setback.

Major central banks are now diverging in their monetary policies, a dynamic we saw vividly on display last week with the Federal Reserve ending its quantitative easing (or QE) program, while Japan expanded its version of QE.

During 2Q17, Equity Residential (EQR) reported higher-than-expected top-line and bottom-line results backed by robust rent growth and occupancy levels.

During 1Q17, General Growth Properties’ (GGP) occupancy rate (same-store leased percentage) fell to 95.9% from 96.6% in 1Q16.

In November, RCS Capital terminated a $700 million deal to acquire Cole Capital from ARCP.

GGP reached a debt-to-equity ratio 2.2x in 2014, its highest in the last five years.

In 1Q17, Southern California comprised 25% of Equity Residential’s (EQR) total revenues, 19% of its total revenues came from Washington, D.C., and New York comprised 21% of its total revenues.

The CCI is one of the oldest consumer surveys, originally started as a mail-in survey in 1967. It asks respondents whether certain conditions are positive, negative, or neutral.

What makes the utilities unattractive is the fact that interest rates will likely be rising soon. The utilities require a huge amount of infrastructure.

In this series, we’ll get down to the brass tacks of investing in the REIT sector, the market’s current landscape, and the benefits you can expect from this type of investment.

In 2017, Healthcare Trust of America (HTA) had total leverage of 29.9%.

In the Plum Creek Timber-Weyerhaeuser merger, Weyerhaeuser is paying about 7.4x trailing-12-month revenues and 25.4x trailing-12-month EBITDA.

The rising interest rate is expected to boost the economy in the long run, but it could severely impact sectors like real estate.

Although inflation is low, it’s a good idea to have a small amount of inflation hedge in your portfolio. A small inflation hedge adds diversification.

Dividend stocks have underperformed this year so far. The dividend yield measures dividends payed by a company in the last 12 months relative to its share price.

The Fed, in its latest announcement, has further reduced its bond buying program to $55 billion a month, signalling that the improvement in the economy is on track.

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.

Zoning is the way that governments supervise land development and the kinds of uses each individual property may be directed toward for the public interest.

Municipal bond issuers are state-wide and local. They typically use the funds they accumulate through issuing bonds for infrastructure projects.

In this series, we’ll introduce you to the concept of exchange-traded funds (or ETFs). You’ll find out about the types of ETFs and how they can help your portfolio.

In essence one of the things we have accomplished with these three products is to reduce the volatility inherent in all markets, and in particular very volatile markets like the real asset sectors.

February US crude oil (UWT) (USL) futures contracts rose 0.5% to $61.73 per barrel on January 8. Prices are near the highest level since December 2014.

Simon Property Group is by far the biggest shopping center REIT in the U.S., with a market capitalization of $53 billion. The next biggest REITs are less than half Simon’s size.

By Michael Orzano, Director, Global Equity Indices Publicly traded property stocks, including real estate investment trusts (or REITs) and real estate operating companies (or REOCs), allow investors to gain exposure to real estate, which is generally an illiquid asset class, without sacrificing the liquidity benefits of listed equities. They also typically offer higher yields than […]

The residential REIT sector mainly includes apartments and manufactured housing. It’s one of the largest segments in the REIT industry.

Shopping center REITs mainly own and operate shopping centers that are smaller than retail malls. They’re mainly driven by higher consumer spending.

In December 2008, when the U.S. economy entered its dreadful recessionary phase, the Federal Reserve (or Fed) reduced the federal funds rate to nearly zero in order to stimulate household and business spending and support economic recovery.

General Growth CEO Sandeep Mathrani spent a lot of time on the conference call discussing the impact of e-commerce on his company (and mall REITs in general).

Welltower (HCN) has successfully set itself on a growth trajectory backed by strategic initiatives, aiding its steady top line growth.

The real estate sector (VNQ) has been lagging in performance in 2018. It’s seen a year-to-date loss of 6%.

EQR announced a quarterly dividend of $0.50. The current dividend yield stands at 3.2%, and it has a payout ratio of 135.2% for 3Q17.

The Fed indicated that it could implement two more rate hikes in 2017. The market speculates one of the rate hikes could occur in June, and the other one is expected to occur around December 2017.

Equity Residential’s (EQR) top line in 2Q17 surpassed both the year-ago results as well as management’s expectations backed by rent growth.

Last week, Elliott Management filed its 13F for the first quarter of 2020. In the last quarter, the hedge fund’s AUM was worth around $73.15 billion.

At the end of the day, consumers don’t start spending after recessions because they want to. They do it because they have to.

We’ve talked about the dual mandate and factors constraining the Federal Reserve from achieving this mandate. Let’s now assess how close the Fed has come to achieving its macroeconomic objectives.

The ten-year Treasury (IEF) note auction is of great interest to stock and bond (BND) market participants. Ten-year Treasury yields are benchmarks for many interest rates, including mortgages (IYR)(VNQ) and equity risk premiums (QQQ).

There has been a shift to real estate (VNQ), utilities (XLU), and consumer staple (XLP) stocks in 2014 because investors are looking for equities with bond like characteristics that give them a higher income.

In order to eliminate inflation risk for investors, the U.S. Treasury introduced TIPS in 1997—TIPS protect the value of debt securities from eroding due to inflation.

For several years, media headlines have been filled with references to a mythical “deleveraging,” or a reduction in the level of U.S. debt. In reality, U.S. non-financial debt has increased.

Narayana Kocherlakota is an American economist and the 12th and current president of the Federal Reserve Bank of Minneapolis.

US crude oil futures contracts for February delivery also rose 0.6% to $62.01 per barrel on January 4, 2018—the highest settlement since December 2014.

On August 8, Equinix (EQIX) declared a regular quarterly cash dividend of $2.28 per share for the third quarter.

According to the IMF (International Monetary Fund), the world economy grew 3.8% in 2017, the fastest since 2011.

In 2015, 2016 and 2017, Equinix paid regular cash dividend per share of $6.76, $7.00 and $8.00, respectively.

Equity Residential’s (EQR) second-quarter operating expenses increased at a higher rate than the growth rate of same-store revenues.

RAAX’s allocation process provides exposure to segments with better returns profiles while managing overall portfolio risk.

VanEck The VanEck Vectors Real Asset Allocation ETF (RAAX) uses a data-driven, rules-based process that leverages over 50 indicators (technical, macroeconomic and fundamental, commodity price, and sentiment) to allocate across 12 individual real asset segments in five broad real asset sectors. These objective indicators identify the segments with positive expected returns. Then, using correlation and […]

In a continued effort to deregulate the economy, President Donald Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act.

While the US dollar was expected to gain from the growing economy and the rising interest rates, the recent tax cuts have flipped the scenario.

American Tower (AMT) owns and operates over 160,000 communications sites around the world.

Now that we understand why the macro environment is supportive, why don’t you tell us a little bit about the investment process?

Now that we understand the investment process overall, can you give us a few example sectors and how they work?

Building on a legacy in the real asset space, VanEck is soon to debut a new fund, ticker RAAX.

In March, the service sector continued to grow but at a slower pace.

Analysts gave HCP a mean price target of $26.59, implying a significant ~17.0% rise from its current level of $22.68.

HCP has a $2.0 billion credit facility with maturity in 2021, and the majority of its debt matures after 2019.

HCP has indicated that the recently enacted Tax Cut and Jobs Act could materially and adversely affect the company and its stockholders.

In 4Q17, HCP recorded an $84.0 million impairment on the debt investment and reduced the value to $105.0 million.

Rental revenues for HCP increased ~3.0% from $392.0 million in 2016 to $400.0 million in 2017.

Life Science is an 8.0 million square foot portfolio and represents ~25.0% of HCP’s NOI.

Analysts gave HTA a mean price target of $33.38, implying a significant ~26.0% rise from its current level of $26.30.

For 2017, HCP’s funds from operation stood at $1.95 per share, and its same-store cash NOI growth was 3.4%.

HTA has earnings per share of $0.33 and a PE (price-to-earnings) ratio of ~111.0x.

HCP Inc. has a diversified senior housing portfolio, which has a balanced mix of triple net and SHOP (senior housing operating portfolio).

HTA paid dividends of $1.17 in 2015, $1.19 in 2016, and $1.21 in 2017.

HTA has 3.4% combined pro forma same-store NOI growth, and its development assets are currently 86.0% pre-leased.

Healthcare Trust of America (HTA) completed investments of $2.7 billion in 2017, and 90% of these properties are in key strategic markets.

In 2015, US healthcare spending grew 5.8%, and health spending accounted for 17.8% of the nation’s GDP.

Healthcare Trust of America (HTA) has centers in more than 20 key markets in the US, covering 24 million square feet.

Welltower (HCN) announced a dividend of $0.87 per share for 3Q17 from the previous guidance $0.86 in 3Q16. The dividend yield stands at ~5.6%.

Welltower (HCN) has kept its balance sheet in good shape. It has a cash balance of $236 million and $2.6 billion in credit line availability.

Welltower (HCN) increased its SSNOI (same-store net operating income) to 2.5%–3% from 2.25%–3%. This slight increase is due to strong seniors’ housing operating performance.

EQR reported higher revenues backed by strong growth in rental income.

Since REITs are required to pay 90% of their income as dividends, the tax cuts might reduce their advantage in comparison to other corporations.

Equity Residential (EQR) has properties in Southern California, San Francisco, New York, Washington DC, Boston, and Seattle.

Analysts gave SPG a mean price target of $188.10, implying an ~16.0% rise from its current level of $162.26.

Simon Property Group’s capital expenditure increased ~15.0% in 2Q17 while it decreased ~1.2% in 3Q17.

Simon Property Group (SPG) is expected to pay a dividend of $7.15 per share in 2017, an increase of 10.0%. Its portfolio valuation rose 3.9% for 3Q17 on a year-over-year basis.

For October, service sector activity rose at a pace not seen since the inception of the report. The non-manufacturing index reached a lifetime high of 60.1.

Revenue and earnings HCP (HCP) is a healthcare REIT specializing in US healthcare property investment. In 2016, the company’s revenue growth slowed to 10% from 19% in 2015. The growth was driven by its senior housing operating portfolio, life science segment, and medical office segment, and partially offset by its senior housing triple-net segment. Rental and […]

The S&P 500 Index (SPY) closed the week ending August 25 at 2,443.05 and rose 0.72%—compared to the close on August 11.

Public Storage (PSA) trades at an EV-to-EBITDA multiple of ~21.5x.

During 1H17, CubeSmart acquired two properties located in Maryland and California worth $21.9 million.

Real estate investment trusts have to distribute ~90% of their profits to investors in order to qualify as an REIT.

Industrial REITs (real estate investment trusts) fund their development and redevelopment properties through debt.

GGP’s (GGP) debt-to-equity was 1.55x for 2Q17, which was higher than the industrial mean of 1.07x. As of 2Q17, GGP had $2.0 billion of liquidity.

Simon Property Group (SPG) had 25 redevelopment expansion projects under construction as of 2Q17.

When we consider the top line performance of commercial REITs, we find that they have performed decently during the second quarter.

Welltower’s current price-to-FFO multiple is 17.34x. It had higher-than-expected results in 2Q17 and has an optimistic outlook for fiscal 2017.

Welltower’s (HCN) expected performance in 2017 is reflected in analysts’ ratings for its stock. Analysts have given HCN a mean price target of $72.19.

Equity Residential (EQR) is expected to experience slightly lower margins, mainly due to the higher cost of debt.

The price-to-FFO (funds from operations) multiple is the most popular method of valuing real estate investment trusts (or REIT) such as Welltower (HCN).

Healthcare REITs such as Welltower (HCN) have to pay at least 90% of their taxable incomes as shareholder returns in order to function as REITs.

The new administration under President Donald Trump has taken a key step toward repealing the Affordable Health Care Act, more popularly known as Obamacare.

Welltower’s (HCN) strategic presences in high-barrier and affluent markets help it to maintain its leadership in the healthcare infrastructure industry.

Amid uncertainty in the healthcare sector, Welltower has been able to maintain its business momentum on the back of higher operating efficiency and strategic initiatives.

General Growth Properties (GGP) has been paying dividends to its shareholders consistently in every quarter since it raised its dividend 11.1% during 4Q16 to $0.22.

President Trump doesn’t appear to be inclined to support a higher minimum wage for workers. This could help retail REITs control their operating expenses, boosting their margins.