Real Estate Sector Ideas

[gfp927z]

>>> Cavco Industries, Inc. (CVCO) designs, produces, and retails factory-built homes primarily in the United States. It operates in two segments, Factory-Built Housing and Financial Services. The company markets its factory-built homes under the Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry, and Solitaire brands. It produces park model RVs; vacation cabins; and factory-built commercial structures, including apartment buildings, condominiums, hotels, workforce housing, schools, and housing for the United States military troops. In addition, the company produces various modular homes, which include single and multi-section ranch, split-level, and Cape Cod style homes, as well as two- and three-story homes, and multi-family units. Further, it provides conforming and non-conforming mortgages and home-only loans to purchasers of various brands of factory-built homes sold by company-owned retail stores, as well as various independent distributors, builders, communities, and developers. Additionally, the company offers property and casualty insurance to owners of manufactured homes. It distributes its products through a network of independent and company-owned retailers, planned community operators, and residential developers. Cavco Industries, Inc. was founded in 1965 and is headquartered in Phoenix, Arizona.

<<<



---

[gfp927z]

Data centers - >>> Amazon has halted some data center leasing talks, Wells Fargo analysts say


Reuters

April 21, 2025


https://finance.yahoo.com/news/amazon-halted-data-center-leasing-220311873.html


(Reuters) - Amazon.com has paused some data center lease talks for its cloud division, particularly in overseas markets, suggesting a short-term slowdown in leasing for large-scale facilities, Wells Fargo analysts said on Monday.

The move by the largest U.S. cloud company is the latest sign that rising economic uncertainty could be forcing companies to rethink how they spend the billions of dollars they have earmarked for AI infrastructure including pricey Nvidia chips.

Wells Fargo analysts said the magnitude of Amazon's pause was unclear, but it was similar to Microsoft's recent pullback.

Rather than canceling any signed deals, Amazon is "digesting aggressive recent lease-up deals," the analysts said.

"It does appear like the hyperscalers (big cloud companies) are being more discerning with leasing large clusters of power, and tightening up pre-lease windows for capacity that (would) be delivered before the end of 2026," they said in a note, adding that the likes of Meta, Alphabet-owned Google and Oracle remain active in leasing.

Amazon downplayed the note. "This is routine capacity management, and there haven't been any recent fundamental changes in our expansion plans," said Kevin Miller, vice president of Amazon Web Services Global Data Centers in a post on LinkedIn.

Rival Microsoft abandoned data center projects set to use 2 gigawatts of electricity in the U.S. and Europe in the last six months due to an oversupply relative to its current demand forecast, TD Cowen analysts had said in March.

Investor skepticism about the hefty artificial intelligence spending by U.S. tech firms has increased due to slow payoffs and the rise of Chinese startup DeepSeek, which showcased AI technology at a much lower cost than its Western rivals.

Like rivals, Amazon is investing heavily in generative AI, including releasing a variety of chatbots serving sellers, businesses and consumers.

CEO Andy Jassy justified its billions of dollars in outlays for artificial intelligence development earlier this month, saying the investment was necessary to remain competitive.

<<<



---

[gfp927z]

>>> Blackstone raises $8 bln in latest real estate debt fund amid nascent sector recovery


Reuters

March 7, 2025


https://www.reuters.com/business/finance/blackstone-raises-8-bln-latest-real-estate-debt-fund-amid-nascent-sector-2025-03-07/


March 7 (Reuters) - Blackstone (BX.N), opens new tab has raised $8 billion in its most recent real estate debt fund, the world's largest alternative asset manager said on Friday, a sign that the property sector is seeing a recovery after a couple of tumultuous years.

The fund - Blackstone Real Estate Debt Strategies V - will be active in North America, Europe and Australia and make loans and buy existing loans, according to the company.

Investors including Blackstone and wealthy individuals are scouting for office properties in New York as companies call employees back to the office, fueling a nascent recovery in the battered commercial real estate market.

In Europe, soaring demand for high-quality offices is pushing rents to records in central London, giving investors cause for optimism even as overall office sale volumes remain at multi-year lows.

Real estate investors, consultants and bankers say demand is rising for top-quality offices in New York, spurring them to strike more deals.

Blackstone's current office exposure accounts for less than 2% of its real estate holdings, versus more than 60% in 2007, according to company data.

<<<



---

[gfp927z]

>>> UFP Industries, Inc. (UFPI), through its subsidiaries, designs, manufactures, and markets wood and non-wood composites, and other materials in North America, Europe, Asia, and Australia. It operates through Retail, Packaging, and Construction segments.

The Retail segment offers treated lumber products, including decking, fencing, lattice, and other products; pressure-treated and fire-retardant products used primarily for outdoor decking environments; and lawn and garden products, consisting of wood and vinyl fencing options, garden beds and planters, pergolas, picnic tables, and other landscaping products. This segment also offers wood plastic composites, composite decking, and related decking accessories, including non- aluminum railing systems, balusters, post caps, and other products, as well as pre-painted and primed shiplap and project boards.

The Packaging segment provides custom and structural packaging products, pallets, corrugate, foam, labels, strapping, and films.

The construction segment offers roof trusses, cut-to-size dimensional and board lumber, plywoods, and oriented strand boards; engineered wood components, including roof and floor trusses, wall panels, I-joists, and lumber packages; and alternate materials components, such as metal trusses, sheathed and pre-finished light gauge metal wall panels, aluminum decks, and rail accessories, as well as distributes siding, electrical, and plumbing products. This segment also engages in the manufacture of components; design, manufacture, and supply of wood forms and related products to set or form concrete for structures, such as parking garages, stadiums, and other infrastructure projects. It also offers interior fixtures, millwork, and casework for retail and commercial structures.

The company was formerly known as Universal Forest Products, Inc. and changed its name to UFP Industries, Inc. in April 2020. UFP Industries, Inc. was incorporated in 1955 and is headquartered in Grand Rapids, Michigan.

<<<

https://finance.yahoo.com/quote/UFPI/profile/

---

[gfp927z]

>>> Watsco, Inc. (WSO), together with its subsidiaries, engages in the distribution of air conditioning, heating, refrigeration equipment, and related parts and supplies in the United States and internationally. The company distributes equipment, including residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment. It also offers parts comprising replacement compressors, evaporator coils, motors, and other component parts; and supplies, such as thermostats, insulation materials, refrigerants, ductworks, grills, registers, sheet metals, tools, copper tubing, concrete pads, tapes, adhesives, and other ancillary supplies, as well as plumbing and bathroom remodeling supplies.

The company serves contractors and dealers that service the replacement and new construction markets for residential and light commercial central air conditioning, heating, and refrigeration systems. Watsco, Inc. was incorporated in 1956 and is headquartered in Miami, Florida.

<<<


https://finance.yahoo.com/quote/WSO/profile/


---

[gfp927z]

>>> Top 10: 3D Construction Printing Companies


Construction Digital

By Sean Ashcroft

November 13, 2024


https://constructiondigital.com/top10/top-10-3d-construction-printing-companies


Top 10 Construction 3D Printing Companies

Construction Digital considers cutting-edge 3D printing companies in construction that aim to revolutionise building methods and promote sustainability

Additive manufacturing – better known as 3D printing – enables firms to print structures through concrete extrusion, a form of 3D concrete printing that uses a nozzle to extrude layers of concrete to build complex structures. This can reduce labour costs by between 50-80% and construction time by up to 60%.

3D printing is ideal for off-site prefabrication and on-site construction. The process minimises waste through precision material usage, with studies showing a 30% reduction in concrete consumption versus standard methods. The method suits social housing programmes due to speed and cost efficiency. Material innovations include recycled concrete mixes and carbon-fibre reinforced polymers.

A number of major construction companies are invested in the 3D concrete printing process:

Saint-Gobain (France): having acquired a stake in XtreeE, a 3D concrete printing company, is focusing on developing 3D-printed building materials and components.

Holcim Group (Switzerland): partnered with XtreeE to develop 3D-printed concrete solutions, is investing in research to create specialised 3D printing materials.

Bouygues Construction (France): collaborating with Dassault Systèmes and XtreeE on 3D-printed building projects, is focusing on integrating 3D printing into traditional construction methods.

Skanska (Sweden): has collaborated with Loughborough University on 3D concrete printing technology, to invest in research to develop 3D-printed building components and structures.

The following are among the leading 3D printing companies and 3D-printer manufacturers that service the construction sector.

10 Constructions-3D

Constructions-3D is a French company that has been designing machines that produce 3D concrete printing structures since 2017. It has developed several machines including The MaxiPrinter, the MiniPrinter PRO, the MiniPrinter EDU and the Constructimètre. It can also provide adapted materials according to the objective of its customers.

The concrete 3D printing process is based on an automation and repeatability system, which also ensures precision.

09 Mighty Buildings

Mighty Buildings is a company that says "we understand construction needs to become more sustainable to better benefit the planet". By using innovative 3D printing, robotics and automation, it builds customisable home kits with, it claims, 99% less waste and a lower carbon footprint than traditionally constructed homes.

The company’s goal is to produce fully carbon-neutral houses by 2028, which is projected to be 22 years ahead of the construction industry. It has been working towards zero-waste production, kit system design, and a unique concrete-free formula to create design-forward homes while reducing time, costs, and emissions.

08 CyBe Construction

CyBe has developed hardware, software, building materials and learning platforms to become a ‘one-stop-shop’ for all things concrete 3D printing. Aiming to lead in innovation, CyBe Construction offer 3D concrete printing solutions and continually aim to develop mobile and modular technology.

The company changes complex building processes to deliver affordable products faster and in a more sustainable way. It also uses fewer raw materials and minimal transportation. CyBe Construction offers 3D concrete printing as an innovative solution to builders of affordable housing, with cheaper, faster and more sustainable construction.

07 SQ4D

SQ4D builds full-size concrete houses and commercial structures using 3D printing technology, and aims to be faster, safer, and stronger, with minimal cost.

The company has recently listed for sale the first 3D printed home in the United States, using SQ4D’s revolutionary Max Autonomous Robotic Construction System (ARCS), which is the first 3D printed home to receive a certificate of occupancy. The company built the home in 80 hours and it was listed at $299,000, which was below the area's median price.

06 XtreeE

XtreeE designs and manufactures large-scale 3D printers and has developed strong expertise in the field of large-scale manufacturing for construction, both on the technological and product design sides. Its research and development-oriented system is based on a medium-scale robot and control and supervision software developed by the company itself.

The company enables high quality custom robotic configurations, with real time process monitoring and post-printing analysis. This ensures that additional measurement features can be constantly developed by XtreeE and therefore adapted to specific user needs.

05 WASP

3D printing by WASP materialises objects made with bio-plastic, clay, silicone and biocompatible materials, which mills wood and aluminium. The aim of the company is to build ‘zero-mile’ homes using materials found in the surrounding area. Its aim is to use renewable energies such as sun, wind and water.

In 2018 Wasp introduced Crane WASP, a collaborative 3D printing system able to print houses. The WASP project studies, realises and sponsors eco-friendly systems that understand that a house is a primary need and a right. It suggests a process to actualise houses with a very low price.

04 Peri 3D Construction

PERI’s construction printing aims to revolutionise the construction industry due to its ability to expedite the industrialisation of the construction process. Wanting to build a greater number of buildings in a short period of time at low cost is a great benefit to this type of technology, but can also pave the way for greater sustainability in construction.

In May 2023, it was announced that PERI would be partnering with Krause Group to build a 3D printed data centre building in Heidelberg, Germany. It is set to be the ‘largest 3D-printed building in Europe’ from the end of 2023.

03 COBOD International

COBOD is a world leader in 3D construction printing solutions. The company constantly aims to improve its printing speed, efficiency, labour need and material cost to challenge conventional construction. With over 50 3D printers sold, COBOD helps to lead the way in 3D construction printing.

It has recently been announced, as reported by 3D Printing Industry, that COBOD’s BOD2 3D printer is being used to construct the first 3D printed school in Lviv, Ukraine. The project has been anticipated to be completed by the end of June 2023, representing a significant milestone in European construction.

02 Apis Cor

Apis Cor is an award-winning construction technology company continuing to make huge progress in the housing construction industry, particularly concerning concrete 3D printing technology. The company uses robotic printers, named Frank, Gary and Mary, to ensure that building is consistent and easy.

The company designed and successfully tested 3D printed concrete walls as comparable to concrete block walls which are structurally reinforced. Its proprietary concrete material is 33% stronger than concrete block material, according to the company website.

As reported by Yahoo Finance, Apis Cor seeks to introduce automation to the construction industry, providing builders with the technology to increase productivity, speed up construction times, and work towards a goal of building low-rise buildings robotically to meet the high demand for housing.

01 ICON

ICON’s 3D-printed, high-performance homes feature elevated architectural and energy efficient designs that showcase resiliency and sustainability with plenty of the digital possibilities of construction. The company provides plenty of online resources concerning home construction with 3D printers, in addition to sharing the possibilities of off-world construction.

The building completed by the company is delivered at speed using a fleet of ICON’s Vulcan robotic construction systems, software and advanced materials, with each interior and exterior wall of the home produced with less waste and more design freedom. The Vulcan construction system consists of the Vulcan printer and the Magma portable mixing unit that prepares ICON’s proprietary building material, Lavacrete, for printing.

Hardware is driven by the company’s BuildOS software suite, which generates and prepares architecture for printing, then controls the robotic hardware on-site to turn digital plans into physical homes.

<<<



---

[gfp927z]

>>> Boise Cascade Company (NYSE:BCC)

https://www.insidermonkey.com/blog/12-best-land-and-timber-stocks-to-buy-according-to-analysts-1415148/6/

Average Price Target Upside Potential According to Analysts: 22.02%

Number of Hedge Fund Holders: 29

Boise Cascade Company (NYSE:BCC) is a significant player in the North American lumber industry, specializing in engineered wood products and plywood. The company is committed to managing forests responsibly as it relies heavily on timber from forests to produce its products. It also serves as a major wholesale distributor of building materials for both residential and commercial construction.

In the third quarter of 2024, Boise Cascade Company (NYSE:BCC) reported sales of $1.7 billion, down from $1.8 billion in the same period last year. Net income also decreased to $91 million compared to $143.1 million in Q3 2023. This decline reflects a challenging market, with total US housing starts down by 3% and single-family starts down by 1% year-over-year compared to Q3 2024. In the face of market pressures, Boise Cascade Company (NYSE:BCC) has shown resilience by adapting to moderate demand conditions.

In the first three quarters of 2024, Boise Cascade Company (NYSE:BCC) returned $220.5 million to shareholders through dividends and repurchased over 1.2 million shares of its common stock for $158.5 million. This commitment to returning capital demonstrates confidence in its long-term prospects.

On December 10, 2024, the company announced the acquisition of the Parksite door shop in Lakeland, Florida. This strategic move is aimed at expanding the company’s millwork operations to 15 locations and enhancing its product offerings in the state of Florida. Boise Cascade Company’s (NYSE:BCC) focus on strategic investments and shareholder returns positions it well for future growth. The company’s ability to navigate a challenging market while maintaining strong financial practices makes it an attractive stock.

<<<



---

[gfp927z]

>>> Simpson Manufacturing Co. Inc. (NYSE:SSD)

https://www.insidermonkey.com/blog/12-best-land-and-timber-stocks-to-buy-according-to-analysts-1415148/2/

Average Price Target Upside Potential According to Analysts: 15.62%

Number of Hedge Fund Holders: 22

Simpson Manufacturing Co. Inc. (NYSE:SSD) designs, engineers, and manufactures wood construction products. The company’s extensive product range includes connectors, truss plates, fastening systems, fasteners, and shear walls. Simpson Manufacturing Co. Inc. (NYSE:SSD) works closely with manufacturers of engineered wood and composite laminated timber. It also manufactures concrete construction products. SSD is one of the best timber stocks to buy.

For Q3 2024, Simpson Manufacturing Co. Inc. (NYSE:SSD) reported net sales of $587.2 million, showing a slight increase year-over-year despite ongoing challenges in the housing markets in both the US and Europe. The company achieved a notable 500 basis point volume growth in North America by outperforming US housing starts over the past year. To improve profitability amid market pressures, Simpson Manufacturing Co. Inc. (NYSE:SSD) is focused on aligning its costs with current conditions.

The company is investing in its facilities to boost production capabilities, with an expansion of its Columbus, Ohio facility set to be operational by early 2025 and a new fastener facility in Gallatin, Tennessee expected to be completed by late 2025. Additionally, Simpson Manufacturing Co. Inc. (NYSE:SSD) acquired QuickFrames USA during the third quarter of 2024. This acquisition strengthens its market position and expands its product offerings in engineered structural roof frames across North America.

With strategic capital allocations and acquisitions, Simpson Manufacturing Co. Inc. (NYSE:SSD) is well-positioned for future growth. Its proactive approach to adapting to market challenges while enhancing operational capacity makes it an attractive stock.

<<<



---

[gfp927z]

>>> Louisiana-Pacific Corporation (NYSE:LPX)

https://www.insidermonkey.com/blog/12-best-land-and-timber-stocks-to-buy-according-to-analysts-1415148/

Average Price Target Upside Potential According to Analysts: 11.67%

Number of Hedge Fund Holders: 39

Louisiana-Pacific Corporation (NYSE:LPX) is a manufacturer of engineered wood products, serving builders, remodelers, and homeowners worldwide. With 22 plants across the US, Canada, Chile, and Brazil, the company offers a diverse range of products, including siding solutions, structural components, and oriented strand board (OSB). Louisiana-Pacific Corporation (NYSE:LPX) owns timber and timberlands. Most of its manufacturing in the northern regions utilizes trembling aspen, a fast-growing hardwood known for its ability to regenerate quickly. The company harvests areas where trembling aspen is found with other evergreen species in Canada. LPX ranks among the best land and timber stocks to buy according to analysts.

For Q3 2024, Louisiana-Pacific Corporation (NYSE:LPX) reported a slight decline in net sales of 1% compared to the previous year due to changing market conditions. However, siding revenue experienced an increase of $76 million, representing a 22% growth driven by a 15% rise in volume and a 6% increase in prices. In the face of market pressures, the company is committed to adapting and demonstrating resilience.

Louisiana-Pacific Corporation (NYSE:LPX) generated $153 million in EBITDA and $184 million in operating cash flow during the quarter. For the third quarter, the company strategically invested $44 million in capital expenditures while returning $91 million to shareholders through dividends and share repurchases. As of September 30, 2024, Louisiana-Pacific Corporation (NYSE:LPX) maintained about $900 million in liquidity and a strong balance sheet. The company’s focus on returning value to shareholders while carefully investing in growth initiatives positions LPX as an attractive investment opportunity in the land and timber sector.

<<<



---

[gfp927z]

>>> UFP Industries Inc. (NASDAQ:UFPI)

https://www.insidermonkey.com/blog/12-best-land-and-timber-stocks-to-buy-according-to-analysts-1415148/3/

Average Price Target Upside Potential According to Analysts: 17.15%

Number of Hedge Fund Holders: 22

UFP Industries Inc. (NASDAQ:UFPI), formerly known as Universal Forest Products, is a leading manufacturer and distributor of products for construction, packaging, and industrial applications. The company operates over 200 facilities worldwide and is a key supplier of lumber to the manufactured housing industry. As a leading manufacturer and distributor of wood products, the company is committed to protecting forests while sourcing lumber from around the globe.

For Q3 2024, UFP Industries Inc. (NASDAQ:UFPI) reported net sales of $1.65 billion, a 10% decrease year-over-year. This decline was primarily due to a 3% drop in organic unit sales and a 7% reduction in selling prices, largely driven by a significant 21% decrease in the price of Southern Yellow Pine, which accounts for about two-thirds of the company’s lumber purchases. The challenging market conditions have put pressure on both revenue and profit margins.

To navigate these challenges, the company is implementing strategic initiatives aimed at improving efficiency and reducing costs. UFP Industries Inc. (NASDAQ:UFPI) plans to consolidate facilities to enhance capacity utilization and is exploring options for certain business units that do not align with its long-term goals. Through these measures, UFP Industries Inc. (NASDAQ:UFPI) expects to achieve annual cost reductions exceeding $70 million.

Looking ahead, UFP Industries Inc. (NASDAQ:UFPI) is focused on growth and plans to invest approximately $1 billion over the next five years in strategic acquisitions and organic growth opportunities. This includes investments of $300 million towards automation, technology upgrades, and capacity expansion in 2024. With its proactive management strategies, commitment to sustainability, and strong investment plans, UFP Industries Inc. (NASDAQ:UFPI) presents an attractive investment opportunity. The combination of cost-cutting measures and significant capital investment positions the company for future growth despite current market challenges.

<<<



---

[gfp927z]

>>> 'Work From Home Is Dying' – NYC Offices Nearly Full As Workers Return In Droves


Benzinga

by Margaret Jackson

November 19, 2024


https://finance.yahoo.com/news/home-dying-nyc-offices-nearly-120015393.html


New data on office attendance suggest a shift in the remote work trend that surged during the pandemic. In-person work is gaining traction, particularly in major urban centers.

New York City leads the nation in-office visits, with October occupancy reaching 86.2% of pre-pandemic levels, according to Placer.ai, which tracks building traffic using cellphone data. Miami follows closely at 82.6%.

In contrast, San Francisco lags significantly, with office visits at just 51.7% of pre-pandemic levels, reflecting a stronger embrace of remote work.

This emerging pattern highlights a nuanced national landscape: While cities like New York experience a robust return to physical offices, others like San Francisco maintain a stronger preference for remote arrangements.

The evolution of this trend will likely depend on local economic conditions, workplace culture and ongoing negotiations between employers and employees.

"Midtown (Manhattan) is very close to 2019 in attendance," Bryan Park Corp. cofounder Daniel Biederman told the New York Post. "We have some tourists, but most people lunching in the park are office workers.

"Work from home is dying against all predictions."

A desire for in-person connections doesn't solely fuel the rise in office attendance. A key factor is employer pressure. The Placer.ai report highlights that major companies, such as Amazon, Dell, Goldman Sachs, Walmart and UPS, are "cracking down on remote work," with some requiring employees to return to the office full-time.

The trend of stricter remote work policies has drawn positive reactions from some real estate industry leaders, who see it as a welcome return to normalcy for office spaces. However, it's important to acknowledge the combined influence of both employer mandates and employee preferences in shaping the future of work.

While older and less desirable buildings may still face challenges, the prime office towers in areas like Sixth and Park Avenues, Hudson Yards and the World Trade Center are thriving. This is evident to anyone who works, lives or shops in these neighborhoods.

JLL Vice Chairman Joseph Messina told the Post that the rise in Class A leasing is evidenced by the trend of employers pushing for employees to work in the office four to five days per week.

"While initially seen primarily in the financial services sector, recent announcements from major tech firms are now influencing the same trend," he said.

Bloomberg LP recently renewed and expanded its lease in real estate investment trust SL Green Realty Corp.'s building at 919 Third Ave. and Amazon appears to be planning a 300,000-square-foot expansion at 452 Fifth Ave.

"Clearly, a return-to-office mentality is bringing a lot more people back and forcing some of these existing tenants to come back into the market where they had laid off space because they thought they were going to have a more robust hybrid work environment," SL Green Leasing Director Steven Durels said on a recent investors' call. "And now they're bringing the bodies back, it's forcing them to take more space."

<<<



---

[gfp927z]

Crown Castle Intl - >>> EQT-backed Zayo, TPG vie for Crown Castle assets worth nearly $10 billion, sources say


Reuters

by Milana Vinn

October 2, 2024


https://finance.yahoo.com/news/exclusive-eqt-backed-zayo-tpg-140849905.html


By Milana Vinn

NEW YORK (Reuters) - Fiber network owner Zayo Group and buyout firm TPG are competing to acquire the fiber and wireless assets of Crown Castle, in a deal that could be valued at nearly $10 billion, according to people familiar with the matter.

Zayo, which is owned by buyout firms EQT AB and DigitalBridge, and TPG are the two remaining bidders for the assets, which include Crown Castle's fiber business and its small cell business, which provides wireless services and technology, the sources said, requesting anonymity as the discussions are confidential.

Both units are worth less than $5 billion each and it is possible that Crown Castle could choose to sell only one of the assets, one of the sources said. If both assets are sold, the deal is likely to be valued between $8 billion and $10 billion, the source added.

A deal is still several weeks away and not imminent, the sources said, cautioning that a transaction is not guaranteed. Another suitor could also approach Crown Castle, and it is possible that no deal with any party is reached, the sources added.

If the talks are successful, the transaction would come up at a time when dealmaking in the fiber industry is heating up, as the rapid growth of fiber broadband provides a major boost to infrastructure providers, making them attractive acquisition targets.

Crown Castle, TPG, EQT, and DigitalBridge declined to comment. Zayo did not immediately respond to requests for comment.

Houston, Texas-based Crown Castle is a telecommunications infrastructure provider which operates more 40,000 cellular towers across the United States.

The company, which has a market value of roughly $52 billion, has grown its fiber business through several acquisitions since its foray into the sector in 2015. However, the high cost of building fiber infrastructure has weighed on its financial performance, forcing the company to consider a retreat from the business and slash spending.

Crown Castle, which rents out towers to wireless carriers such as Verizon and AT&T, is now looking to focus on growing its tower business, which is expected to benefit from the largest U.S. carriers upgrading their networks to 5G and increasing capacity to meet booming data demand.

The company has been exploring options for its fiber assets, after reaching a deal with activist investor Elliott Investment Management over shaking up its board.

In February, Crown Castle's co-founder Ted Miller told Reuters in an interview that the company could fetch as much as $15 billion by selling its fiber assets if it let him and his partners join its board of directors.

In June, the company cut its annual profit forecast and said it would lay off 10% of its workforce as a result of an operational review of its fiber business.

Boulder, Colorado-based Zayo was taken private in 2019 by EQT and DigitalBridge's infrastructure fund that was known as Digital Colony at the time. Zayo operates a 145,000-mile fiber network across North America and Canada that connects wireless carriers, cloud service providers, data centers, and large corporations.

<<<



---

[gfp927z]

>>> Gladstone Land Corp (NASDAQ:LAND) is a McLean, VA-based specialty REIT, founded in 1997. It owns farmland and related properties in major agricultural U.S. markets and leases or lease-backs its properties to farmers. Gladstone presently owns 168 farms with 112,000 acres across 15 states. Gladstone Land also owns 49,000 acre-feet of banked water in California worth approximately $1.5 billion. About 40% of Gladstone Land's acreage is utilized for organic produce. Its acreage is 99.4% leased.

Gladstone has paid out 135 consecutive monthly cash distributions since its January 2013 IPO and has increased its dividend 34 times over the last 37 quarters.

On May 7, Gladstone Land released its first quarter operating results. FFO of $0.14 missed the estimate of $0.15 and was below the FFO of $0.17 in Q1 2023. Revenue of $20.252 million missed the consensus estimate of $22.307 million and was below revenue of $21.202 million in Q1 2023.

On June 11, Alliance Global Partners initiated coverage on Gladstone Land with a Buy rating and announced a price target of $16. Oppenheimer rates Gladstone Outperform and also has a $16 price target. Gladstone Land was recently trading at $13.60.

<<<


(June 13, 2024)

https://finance.yahoo.com/news/analysts-just-initiated-coverage-four-173951591.html


---

[gfp927z]

>>> Cavco Industries, Inc. (CVCO) designs, produces, and retails factory-built homes primarily in the United States. It operates in two segments, Factory-Built Housing and Financial Services.

The company markets its factory-built homes under the Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry, and Solitaire brands.

It produces park model RVs; vacation cabins; and factory-built commercial structures, including apartment buildings, condominiums, hotels, workforce housing, schools, and housing for the United States military troops.

In addition, the company produces various modular homes, which include single and multi-section ranch, split-level, and Cape Cod style homes, as well as two- and three-story homes, and multi-family units.

Further, it provides conforming and non-conforming mortgages and home-only loans to purchasers of various brands of factory-built homes sold by company-owned retail stores, as well as various independent distributors, builders, communities, and developers.

Additionally, the company offers property and casualty insurance to owners of manufactured homes. It distributes its products through a network of independent and company-owned retailers, planned community operators, and residential developers. Cavco Industries, Inc. was founded in 1965 and is headquartered in Phoenix, Arizona.

<<<


https://finance.yahoo.com/quote/CVCO/profile/


---

[gfp927z]

>>> D.R. Horton -- When interest rates drop, mortgage rates usually do, too. And when mortgage rates decline, more Americans can afford to borrow money to build new homes. Rate cuts, therefore, can provide nice catalysts for housing stocks.

https://finance.yahoo.com/news/3-stocks-buy-hand-over-095000813.html

D.R. Horton (NYSE: DHI) isn't just any housing stock; it's been the biggest homebuilder in the U.S. by volume for over 20 years. The company operates in 118 markets across 33 states. D.R. Horton builds residential houses and single-family and multifamily rental units, and provides mortgage financing and title agency services.

The stock is surprisingly cheap considering the gains it's racked up in recent years. D.R. Horton's forward earnings multiple is only 12.2. Its price-to-earnings-to-growth (PEG) ratio, based on five years of projected earnings growth, is a low 0.64.

Even if the Fed doesn't cut interest rates soon, D.R. Horton should still be a tremendous winner over the long term. The U.S. continues to suffer from an acute housing shortage, and the obvious solution to this problem is to build more homes -- exactly what D.R. Horton wants to do.

<<<



---

[gfp927z]

>>> Lamar Advertising Co. (NASDAQ:LAMR) is a Baton Rouge, Louisiana-based specialty REIT, founded in 1902 with a focus on owning and leasing 363,000 displays throughout the U.S. and Canada, including digital and print billboards, interstate logos and airport advertising formats. Lamar Advertising and Outfront Media Inc. (NYSE:OUT) are the only two REITs exclusively devoted to billboard and display advertising.

https://finance.yahoo.com/news/4-reits-double-digit-total-150016109.html

On Feb. 23, Lamar Advertising reported its fourth-quarter results. FFO of $1.46 per share beat the estimate of $1.35 per share and was 124.62% better than its fourth-quarter 2022 FFO of $0.65 per share. Revenue of $555.91 million topped the estimate of $547.66 million and also bested its revenue of fourth-quarter 2022 revenue of $535.51 million.

On Feb. 26, Morgan Stanley analyst Benjamin Swinburne maintained an Equal-Weight rating on Lamar and increased the price target from $105 to $110. The same day, JPMorgan Chase & Co. analyst Richard Close maintained a Neutral rating on Lamar and raised the price target from $92 to $109.

Lamar pays a quarterly dividend of $1.30 per share, and the annualized $5.20 dividend yields 4.52%. Its total three- and five-year returns are 34% and 67.52%, respectively.

<<<



---

[gfp927z]

>>> A $10 Billion Real-Estate Fund Is Bleeding Cash and Running Out of Options


The Wall Street Journal

by Peter Grant

5-20-24


https://www.msn.com/en-us/money/realestate/a-10-billion-real-estate-fund-is-bleeding-cash-and-running-out-of-options/ar-BB1mHSJw?cvid=b2ff3c3a3bdd460de568db2dc9f0b0e8&ei=39


A giant commercial real-estate fund is scrambling to escape a looming cash crunch caused by the long line of investors who want their money back.

The $10 billion fund from Starwood Capital Group has been trying to preserve its available cash and credit by limiting investor redemptions. In the first quarter, the fund was hit with $1.3 billion in withdrawal requests but satisfied less than $500 million of them, according to regulatory filings.

Even with these limitations, the fund’s liquidity, consisting of cash, marketable securities and a bank line of credit, has been drying up. It totaled $752 million at the end of April, down from $1.1 billion at the end of last year. It was $2.2 billion at the end of 2022, according to filings.

“They don’t have a lot of liquidity left,” said Kevin Gannon, chief executive of Robert A. Stanger, an investment bank that specializes in real-estate funds.

These developments have left the Starwood Real Estate Income Trust, known as Sreit, with three options—none of them appealing. It could take on more debt. It could sell properties into a tough market. Or it could halt completely or limit further redemptions, a move that would greatly impair the fund’s ability to raise new money. Unless it takes one of these three steps, Sreit looks poised to run out of cash and credit before year-end if the current pace of redemptions continues.

Rates, Risk & Real Estate: Starwood REIT limits withdrawals

Other real-estate funds are handling the pressure from the long queue of redemptions in varying degrees. The largest of the funds, Blackstone Real Estate Income Trust, or Breit, has $7.5 billion in liquidity and earlier this year was able to fulfill all redemption requests. But withdrawals continue to exceed new fundraising.

Sreit was one of the most prominent real-estate funds launched between 2017 and 2022, second in size only to Breit. These funds, known as nontraded real-estate investment trusts, invest in commercial property similar to publicly traded REITs. In all, these vehicles raised about $95 billion, mostly from individual investors, according to Stanger.

The funds also were very popular when interest rates were low because they paid dividends in the 5% range. Sold through financial advisers, they also gave small investors the opportunity to participate in what was then a hot commercial-property market.

But investors started to bolt as interest rates jumped and commercial real-estate values fell. In late 2022, Sreit and others began limiting redemptions to as much as 2% of their net asset values a month and up to 5% a quarter.

New fundraising also has dropped sharply as some analysts have criticized the structure of the funds and financial advisers have raised warnings. Sreit’s new fundraising has dwindled to about $15 million a month, down from more than $600 million a month in the first half of 2022.

Sreit’s ability to make redemptions will help determine whether the funds will be a long-term feature of the real-estate market or fade away. Some analysts believe that the funds are proving themselves through a tough commercial-property market. Others say the funds are showing major problems.

Because it can’t raise enough new funds to make up for even its limited redemptions, Starwood has been considering a number of difficult options, say people familiar with the firm’s thinking.

The fund could borrow more, but that would be costly at today’s high interest rates. Sreit’s current debt is already equal to 57% of its assets, which is more than many comparable real-estate funds. Sreit’s target leverage is 50% to 65%.

The fund could sell assets. Sreit owns hundreds of properties throughout the country, mostly warehouses and rental apartment buildings in the Sunbelt. But the value of most commercial real estate has been hammered by high interest rates, which drive up costs in the high-leverage business. Rental apartments have also been hurt by overbuilding in many markets.

Most rental-apartment owners who bought in the years just before the interest-rate spike “would prefer not to sell in this market,” said Matthew Werner, managing director with asset manager Chilton Capital Management.

Finally, Sreit could halt or limit further investor redemptions. But analysts believe that would be a last resort because it would make it even harder to raise new money. One of the main selling points of Sreit has been that investors would be able to redeem their shares, subject to the 2% and 5% restrictions.

A redemption halt “would be fatal,” Stanger’s Gannon said. “You wouldn’t be able to raise another dime.”

Sreit was launched in 2018 by Starwood Capital, a private-equity firm headed by Barry Sternlicht, the storied real-estate investor and founder of the Starwood Hotels chain. Sreit raised more than $13.5 billion in equity, which it used to buy more than $25 billion in real-estate assets.

The fund attempted to sell properties last year as the redemption queues began to lengthen. Sreit sold a portfolio of single-family rental homes to Dallas-based Invitation Homes for $650 million, including debt.

But more recently, the fund has slowed sales because of depressed prices. Like other owners, Sreit is hoping prices will rebound later this year, especially if the Federal Reserve begins to cut interest rates.

Instead, Sreit has relied on its line of credit. But that won’t last much longer at the rate the fund is drawing it down. The line has $275 million of capacity, down from its original size of $1.55 billion.

<<<



---

[gfp927z]

>>> World’s largest 3D printer can build a small house in 80 hours


Interesting Engineering

by Maria Mocerino

4-24-24


https://www.msn.com/en-us/money/other/world-s-largest-3d-printer-can-build-a-small-house-in-80-hours/ar-AA1nzt4N


The University of Maine has smashed its own world record by creating the largest polymer 3D printer, paving the way for the future of sustainable manufacturing.

In 2019, they unleashed the first record-breaking 3D printer that constructed a 600-square-foot house made of recyclable materials.

Built to meet a demand for more affordable housing, the state of Maine needs another 80,000 homes over the next six years with a shortage of manpower to make it happen.

The bigger and better Factory of the Future 1.0 (FoF 1.0) 3D printer is here to help its predecessor reach this goal of providing more for less.

The FoF 1.0 3D printer will build affordable housing

The university, with a longstanding relationship with the US government, wanted to demonstrate that a 3D printer could print a home with a lower carbon footprint – as the construction industry produces about 37% of greenhouse gas emissions, according to the United Nations Environment Program.

The FoF 1.0 prints four times faster, which means that it can print a bio home in about 80 hours. A single-story bungalow, for example, could take a few months to build, but this printer can complete the project in less than four days.

The goal wasn’t to build a cheap house, but rather to build one that people wanted to live in, said Dr Habib Dagher, the Director of the Advanced Structures and Composites Center at the University of Maine.

Present for the official unveiling of the FoF 1.0 were representatives from the US Department of Defense, Energy, the Maine State Housing Authority, as well as other stakeholders who plan to put this Factory of the Future 1.0 3D printer to good use.

The FoF 1.0: The future of manufacturing and defense

The thermoplastic polymer printer can print objects as large as 96 feet long by 32 feet wide by 18 feet high — consuming 500 pounds of material per hour.

Its applications range from industries to national security — meaning, if they need to build ships fast, they have the technology to do so.

Though, typically, it takes years to build military ships, in WWII, the US manufactured the Liberty ships in 42 days. These large-scale 3D printers could feasibly meet that speed and maybe surpass it if needed.

The applications of the 3D printer, however, are far-reaching.

“UMaine and the Advanced Structures and Composites Center possess the innovation, capacity, and workforce to support the future needs of the Department of Defense in advanced manufacturing,” said US Sen. Susan Collins. “This is a great day for our University, our State, and our Nation.”

Because the FoF 1.0 is so much more than a printer. It can switch functionalities between “additive manufacturing, subtractive manufacturing, continuous tap layup, and robotic arm operations.”

It’s both a computer and a manufacturer that the Office of the Secretary of Defense and US Army Corps of Engineers helped to design and build.

The FoF 1.0 stands to revolutionize a variety of industries. That includes affordable housing, public works such as bridge construction, and ocean and wind energy. And it’s all recyclable.

“You can basically deconstruct it, grind it up if you wish, the 3D printed parts, and reprint with them, do it again,” Dr Dagher said.

FoF 1.0 sits at the center of a new research center in Maine

With two immensely powerful machines, the University of Maine can develop biobased, locally sourced feedstocks, print affordable homes, and meet national security demands quickly.

The University of Maine System Chancellor Dannel Malloy called it an intersection of engineering and computing that will “accelerate solutions that strengthen the state’s economy and communities.”

The FoF 1.0 3D printer is only the beginning. Set to open this summer, the Green-Engineering and Material Factory of the Future (GEM) will break new ground as a 47,000 square foot manufacturing innovation center.

Creating sustainable manufacturing practices and filling a much-needed gap in the workforce is its objective. They intend to nurture the next generation of leaders through a sustainable model.

“The Maine College of Engineering and Computing is proud to be a strong partner in developing the Factory of the Future 1.0,” said Giovanna Guidoboni, inaugural dean of MCEC.

<<<



---

[gfp927z]

>>> SBA Communications Corporation (NASDAQ:SBAC) -- Average Analyst Price Target: $264.63

https://www.insidermonkey.com/blog/5-best-real-estate-and-realty-stocks-to-buy-according-to-analysts-1264847/4/

Upside Potential: 27.05%

Number of Hedge Fund Holders: 41

SBA Communications Corporation (NASDAQ:SBAC) is a telecom tower REIT based in Boca Raton, Florida. The company is an independent owner of wireless communications infrastructure such as towers, buildings, and rooftops.

In the fourth quarter, 41 hedge funds were long SBA Communications Corporation (NASDAQ:SBAC), with a total stake value of $1.5 billion.

An Outperform rating and a $265 price target were maintained on SBA Communications Corporation (NASDAQ:SBAC) on February 27 by BMO Capital.

Baron Funds mentioned SBA Communications Corporation (NASDAQ:SBAC) in its third-quarter 2023 investor letter:

“We reduced our stake in long-term holding SBA Communications Corporation (NASDAQ:SBAC), which owns and operates cellular towers, on concerns that higher interest rates will increase its debt servicing costs and indications that its primary customers will spend less on upgrading their cellular networks.”

<<<



---

[gfp927z]

>>> VICI Properties Inc. (NYSE:VICI) -- Average Analyst Price Target: $34.59

https://www.insidermonkey.com/blog/5-best-real-estate-and-realty-stocks-to-buy-according-to-analysts-1264847/

Upside Potential: 16.94%

Number of Hedge Fund Holders: 44

VICI Properties Inc. (NYSE:VICI) is an experiential REIT based in New York. It owns one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations.

Mizuho maintains a Buy rating and a $33 price target on VICI Properties Inc. (NYSE:VICI) as of January 10.

There were 44 hedge funds long VICI Properties Inc. (NYSE:VICI) in the fourth quarter, with a total stake value of $960.1 million.

<<<



---

[gfp927z]

>>> American Tower Corporation (NYSE:AMT) -- Average Analyst Price Target: $231.93

https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html

Upside Potential: 14.95%

Number of Hedge Fund Holders: 56

American Tower Corporation (NYSE:AMT) is another telecom tower REIT on our list of the best real estate stocks to buy. It is based in Boston, Massachusetts, and is an independent owner, operator, and developer of multitenant communications real estate.

An Overweight rating and a $230 price target were maintained on American Tower Corporation (NYSE:AMT) on February 28 by JPMorgan analysts.

We saw 56 hedge funds long American Tower Corporation (NYSE:AMT) in the fourth quarter, with a total stake value of $3.2 billion.

Baron Funds mentioned American Tower Corporation (NYSE:AMT) in its fourth-quarter 2023 investor letter:

“Early in 2023, we sold the majority of our position in American Tower Corporation (NYSE:AMT), a global operator of over 200,000 wireless towers, and even further reduced our modest position in the third quarter of 2023. We had concluded in late 2022 and early 2023 that growth expectations were too high given forthcoming headwinds from significantly higher financing costs (20%-plus exposure to floating rate debt), upcoming debt maturities, continued payment shortfalls from a key tenant in India, foreign exchange headwinds, and a reduction in mobile carrier capital expenditures.

Following a sharp decline in American Tower’s shares in the first nine months of 2023, we began rebuilding our position because we believed that the company’s shares had become more attractively valued, growth headwinds were better understood, and the potential monetization event of its India business would ultimately be value accretive to its business. Further, we believe that 2023 will mark the trough in earnings growth for American Tower and growth should reaccelerate in the next few years.”

Like KE Holdings Inc (NYSE:BEKE), Crown Castle International Corp. (NYSE:CCI), and Realty Income Corporation (NYSE:O), American Tower Corporation (NYSE:AMT) is among the best real estate stocks to buy now.

<<<



---

[gfp927z]

>>> AvalonBay Communities, Inc. (NYSE:AVB) -- Average Analyst Price Target: $194.70

https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html

Upside Potential: 9.3%

Number of Hedge Fund Holders: 29

AvalonBay Communities, Inc. (NYSE:AVB) had 29 hedge funds long its stock in the fourth quarter, with a total stake value of $234.7 million.

Morgan Stanley upgraded AvalonBay Communities, Inc. (NYSE:AVB) from Equal Weight to Overweight on February 26, alongside placing a $191.5 piece target on the stock.

AvalonBay Communities, Inc. (NYSE:AVB) is a multi-family residential REIT based in Arlington, Virginia. The company owns or holds a direct or indirect ownership interest in 299 apartment communities containing 90,669 apartment homes in 12 states and the District of Columbia.

At the end of the fourth quarter, AEW Capital Management was the largest shareholder in AvalonBay Communities, Inc. (NYSE:AVB), holding 769,788 shares in the company.

Baron Funds mentioned AvalonBay Communities, Inc. (NYSE:AVB) in its third-quarter 2023 investor letter:

“In the third quarter, we maintained our exposure to apartment REIT AvalonBay Communities, Inc. (NYSE:AVB). We believe public valuations remain discounted relative to the private market. Tenant demand remains healthy and rent growth has modestly improved since the first quarter of 2023. Rental apartments continue to benefit from the current homeownership affordability challenges. Multi-family REITs provide partial inflation protection to offset rising costs due to leases that can be reset at higher rents, in some cases, annually. We continue to closely monitor new supply deliveries and job losses in key geographic markets.”

<<<



---

[gfp927z]

>>> Prologis, Inc. (NYSE:PLD) -- Average Analyst Price Target: $144.94

https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html

Upside Potential: 7.68%

Number of Hedge Fund Holders: 46

Prologis, Inc. (NYSE:PLD) is an industrial REIT based in San Francisco, California. The company is a global leader in logistics real estate with a focus on high-barrier, high-growth markets.

In total, 46 hedge funds were long Prologis, Inc. (NYSE:PLD) in the fourth quarter, with a total stake value of $678.3 million.

As of February 16, RBC Capital maintains an Outperform rating and a $145 price target on Prologis, Inc. (NYSE:PLD).

<<<



---

[gfp927z]

>>> Invitation Homes Inc. (NYSE:INVH) -- Average Analyst Price Target: $37.14

https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html

Upside Potential: 7.53%

Number of Hedge Fund Holders: 25

D1 Capital Partners was the most prominent shareholder in Invitation Homes Inc. (NYSE:INVH) at the end of the fourth quarter, holding 7.5 million shares in the company.

Invitation Homes Inc. (NYSE:INVH) is a single-family residential REIT based in Dallas, Texas. The company leases single-family homes to meet changing lifestyle demands and provide access to high-quality, updated homes in close proximity to good schools and workplaces.

RBC Capital reiterated an Outperform rating and a $36 price target on February 15 on Invitation Homes Inc. (NYSE:INVH).

Our hedge fund data for the fourth quarter shows 25 hedge funds long Invitation Homes Inc. (NYSE:INVH), with a total stake value of $497.8 million.

Here's what Baron Funds said about Invitation Homes Inc. (NYSE:INVH) in its third-quarter 2023 investor letter:

“Following strong second quarter results, we modestly increased our investments in single-family rental REITs Invitation Homes, Inc. (NYSE:INVH). Demand conditions for rental homes are attractive due to the sharp decline in home affordability; the propensity to rent in order to avoid mortgage down payments, avoid higher monthly mortgage costs, and maintain flexibility; and the stronger demand for home rentals in suburbs rather than apartment rentals in cities. Rising construction costs are limiting the supply of single-family rental homes in the U.S. housing market. This limited inventory combined with strong demand is leading to robust rent growth.

Invitation Homes have an opportunity to partially offset the impact of inflation given that their in-place annual leases are significantly below market rents. Valuations are compelling at mid-5% capitalization rates, and we believe the shares are currently valued at a discount to our assessment of net asset value. We remain mindful that expense headwinds and slower top-line growth could weigh on growth later in 2023 and 2024. We will continue to closely monitor business developments and will adjust our exposures accordingly.”

<<<



---

[gfp927z]

>>> Crown Castle International Corp. (NYSE:CCI) -- Average Analyst Price Target: $118.54

https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html

Upside Potential: 6.74%

Number of Hedge Fund Holders: 45

This January, Ari Klein at BMO Capital placed a Market Perform rating and a $110 price target on Crown Castle International Corp. (NYSE:CCI).

Crown Castle International Corp. (NYSE:CCI) is a telecom tower REIT based in Houston, Texas. The company owns, operates, and leases over 40,000 cell towers and about 90,000 route miles of fiber supporting small cells and fiber solutions across US markets and is among the best real estate stocks to buy.

We saw 45 hedge funds long Crown Castle International Corp. (NYSE:CCI) in the fourth quarter, with a total stake value of $1.6 billion.

Fisher Asset Management was the largest shareholder in Crown Castle International Corp. (NYSE:CCI) at the end of the fourth quarter, holding 4.6 million shares in the company.

<<<



---

[gfp927z]

>>> Extra Space Storage, Inc. (NYSE:EXR) -- Average Analyst Price Target: $149.78

https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html

Upside Potential: 4.48%

Number of Hedge Fund Holders: 26

Extra Space Storage, Inc. (NYSE:EXR) is a self-storage real estate investment trust (REIT) company based in Salt Lake City, Utah. The company owns and operates 3,651 self-storage stores in 42 states and Washington, D.C.

As of this January, Goldman Sachs analyst Caitlin Burrows maintains a Buy rating and a $187 price target on Extra Space Storage, Inc. (NYSE:EXR).

There were 26 hedge funds long Extra Space Storage, Inc. (NYSE:EXR) in the fourth quarter, with a total stake value of $330.8 million.

Diamond Hill Capital mentioned Extra Space Storage, Inc. (NYSE:EXR) in its third-quarter 2023 investor letter:

“Following a dip in share price after Q2 earnings and rising interest rates, we had an opportunity to make an initial investment in Extra Space Storage Inc. (NYSE:EXR). Despite facing near-term challenges like normalizing street rents and occupancy rates after two years of robust demand, as well as the recent merger with Life Storage, we believe EXR is well positioned for long-term growth of its intrinsic value. It boasts an impressive franchise and perhaps the industry’s best operating platform. The Life Storage acquisition broadens its real estate portfolio and presents more opportunities for growth. While the company faces some near-term headwinds, the recent sell-off created an opportunity for us to acquire shares in this high-quality franchise at a very reasonable price.”

Like KE Holdings Inc (NYSE:BEKE), Crown Castle International Corp. (NYSE:CCI), and Realty Income Corporation (NYSE:O), Extra Space Storage, Inc. (NYSE:EXR) is among the best real estate and realty stocks to buy now.

<<<



---

[gfp927z]

>>> 14 Best Real Estate and Realty Stocks To Buy According to Analysts


Insider Monkey

by Fatima Farooq

Mar 4, 2024


https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html


In this article, we will be taking a look at the 14 best real estate and realty stocks to buy according to analysts. To skip our detailed analysis of the real estate sector, you can go directly to see the 5 Best Real Estate and Realty Stocks To Buy According to Analysts.

Housing Versus Retail: Where to Invest in Real Estate?

The real estate sector has been battling with elevated mortgage rates this year, resulting in the US housing market suffering from a lack of demand among the population. However, some may expect the struggles of the real estate sector to abate as the year progresses, especially as many financial professionals begin to analyze the state of US real estate markets. Several spaces within the real estate sector are under-invested in, leaving the arena free and open for investors looking to make a real estate play.

On February 29, Carly Trip, the Head of Investments at Nuveen Real Estate, joined CNBC's "Closing Bell Overtime" to discuss the state of the US real estate markets. Here's what she had to say:

"On the residential market, it's kind of like no new news, however what's interesting is that the consumer is really starting to explain their tolerance for mortgage rates. In December we saw really strong numbers, mortgage rates had come in about 50 basis points, bouncing around six and a half. As they have suddenly come up since then and hover above 7%, consumers do not like that. And so we're seeing the results of that in pending home sales. So we expect that that is not gonna improve, inventory will remain low until rates come around 6%, in which case your cost to own versus cost to rent margin really starts to shrink."

Despite the above observations, Tripp noted that other areas in the real estate markets are doing better. Here's what she said:

"Retail's doing amazingly well. So retail has been the underdog of the last decade. And what we're seeing in our centres is increased activity, a lot of demand, increased sales. The consumer is obviously very resilient and strong. That is accomodating to retail spending, 80% of retail sales do involve a physical store which is a positive for our centres. And not only that, there's no new supply added to retail. Over the last five years, about a 130 million square feet of retail has been converted to other uses, so it's really been under-invested in. So the outlook for retail is very, very strong."

Industrial Real Estate Performs Well

Similarly, for the industrial real estate side, Tripp had positive insights to share. Here are some of the comments she made:

"Industrial's been incredible. It has performed exactly as real estate should perform. Income has outpaced inflation, right, real estate is expected to be an inflation hedge, that's why it's such a great diversifier to a portfolio. And so we continue to see incredibly strong demand for industrial. Supply has slowed, that was the concern pre-pandemic. However, due to lack of construction spending, lack of financing just generally speaking, bottlenecks in the construction system, we expect that demand is just gonna continue to flow. E-commerce spending is not going anywhere.

Considering these highlights, while the residential side of real estate seems to be still struggling in 2024, that does not mean all real estate should be avoided this year. Several other areas within the sector remain ripe for investment. As such, we have compiled a list of some of the best real estate stocks to invest in, including names such as KE Holdings Inc (NYSE:BEKE), Crown Castle International Corp. (NYSE:CCI), and Realty Income Corporation (NYSE:O). These include some of the best real estate stocks with dividends and some of the best real estate stocks to buy for the long term.

<<<

(see next posts)



---

[gfp927z]

>>> Blackstone to take Apartment Income REIT private in $10 billion deal


Reuters

Apr 8, 2024


https://finance.yahoo.com/news/blackstone-apartment-income-reit-private-122428050.html


(Reuters) -Asset manager Blackstone said on Monday it would take private rental housing firm Apartment Income REIT, known as AIR Communities, for $10 billion in cash, including debt, in what analysts see as a bet on easing pressure within the commercial real estate market.

Under the deal, Blackstone will pay $39.12 for each share of the real estate investment trust, representing a premium of about 25% to its closing price on Friday. Shares of the REIT jumped about 23%.

Elevated interest rates have put pressure on landlords with loans on rental housing and other commercial real estate properties. Monday's deal was seen by some analysts as a vote of confidence that this pressure has begun easing.

"With this transaction, we believe Blackstone is messaging they view interest rates as stabilizing and access to capital as improved, acting as a positive read-through for the sub-sector," Jefferies analysts wrote.

A top real estate investor, Blackstone has been sharpening its focus on rental housing, betting on its revival as the supply of apartments in the U.S. is expected to decline due to a slowdown in construction.

This was likely to lift rental growth, which has over the past few months remained flat or declined modestly due to fresh supply in many U.S. markets.

AIR Communities, which has a relatively diversified portfolio with apartments in both Eastern and Western coastal markets, has been largely insulated from such pressures.

"(It) represents the highest quality, large scale apartment portfolio we have ever acquired, and is located in markets where multifamily fundamentals are strong," said Nadeem Meghji, global co-head of Blackstone Real Estate.

The rental housing provider reported a 6.2% rise in same-store rental revenue in the fourth quarter, higher than the 2%-4% growth by other publicly listed REITs such as Mid-America Apartments and Equity Residential.

Blackstone plans to invest another $400 million to improve the firm's 76 rental housing communities. Its flagship Blackstone Real Estate Income Trust, which stabilized after some turbulence in late 2022, has outperformed non-listed peers by 600 basis points in 2023.

The company, whose real estate portfolio is valued at $586 billion, had in January agreed to take private Canadian single-family rental housing firm Tricon Residential.

<<<



---

[gfp927z]

>>> 3 Types of REITs That Have Outperformed the S&P 500


by Matt DiLallo

Motley Fool

March 30, 2024


https://finance.yahoo.com/news/3-types-reits-outperformed-p-091300103.html


Congress created real estate investment trusts (REITs) in 1960 to level the playing field. REITs empower anyone to invest in wealth-creating, income-producing real estate.

They've certainly done that over the years. Over the long term, our research found that REITs have outperformed stocks. Since 1994, three REIT subgroups stood out for their ability to beat the S&P 500. Here's a closer look at these market-beating REIT types.

Storing up wealth

According to data from Nareit, self-storage REITs have delivered a 17.3% average annual total return since 1994. That has obliterated the S&P 500's 10.1% average annual total return during that period.

Self-storage REITs have routinely delivered strong returns compared to other REITs:

As that slide highlights, the group has delivered the No. 1 cumulative-sector return since 1999. The space has delivered strong returns over the past decade:

Extra Space Storage (NYSE: EXR) has led the way. As of the final day of 2023, it was the second-best performing REIT over the past decade, with a 443% total return.

A few factors have driven the sector's strong returns. Self-storage properties are very profitable, requiring an occupancy level of 40% to 45% to break even (compared to 60% for most multifamily properties). Meanwhile, demand is steadily rising and relatively economically resilient. On top of that, self-storage leases are short term, which enables operators to increase rents to market rates reasonably quickly. These catalysts have enabled the top-three remaining publicly traded self-storage REITs to grow their core funds from operations (FFO) per share by more than 200% apiece since 2011, with Extra Space growing by nearly 690%. That has enabled all three to deliver robust dividend growth. The rapidly rising dividend income and earnings have enabled these REITs to handily beat the S&P 500.

Dual catalysts

Industrial REITs have delivered the second-best performance in the sector since 1994, with an average annual total return of 14.4%. They have also delivered strong performance over the past decade, with Rexford Industrial and Prologis (NYSE: PLD) delivering two of the five highest returns among REITs at 440.8% and 379%, respectively, as of the end of last year.

Two factors have helped drive the performance of industrial REITs: The accelerating adoption of e-commerce and changing supply chain practices. They've enabled industrial REITs focused on logistics properties to deliver strong core FFO and dividend growth. Over the last five years, logistics REITs have grown their core FFO per share by 9% annually (with 12% from industry-leader Prologis) while delivering 10% compound annual dividend growth (and 12% from Prologis).

The sector expects to continue growing rapidly. Rents on existing warehouse properties are skyrocketing due to high demand and low vacancy levels. That's enabling REITs to develop additional properties. These catalysts drive Prologis' view that it can grow its core FFO per share by 9% to 11% annually through 2026. That should also enable the company to continue increasing its dividend at a strong rate. Those two drivers could enable the leading industrial REIT to maintain its market-beating performance.

Capitalizing on the housing shortage

Residential REITs have delivered the third-highest performance among REIT subgroups since 1994 at 12.7% annually. A few factors have helped drive the sector's strong performance. They include relatively economically resilient demand for rental homes (people need a place to live), enabling landlords to steadily increase rents. Housing market imbalances, especially since the Financial Crisis, have also helped drive demand for rental housing.

As an investment, manufactured home communities have stood out. Equity LifeStyle (NYSE: ELS) was the fourth-best performing REIT over the past decade, delivering a nearly 400% total return as of the end of last year. A big driver is the economic resiliency of manufactured-home communities. These landlords can continue raising rents during a recession because the costs of moving a manufactured home to another community are often too prohibitive.

That driver has enabled Equity LifeStyle to grow its same-store net-operating income at a 4.3% annual rate since 1998, faster than the REIT sector average and apartments (both at 3.3%). Add in an ever-expanding portfolio (which also includes RV parks and marinas), and the company has grown its normalized FFO per share at an 8.6% compound annual rate since 2006. That has allowed it to deliver 21% compound annual dividend growth during that period.

REITs can make great investments

REITs have outperformed the S&P 500 over the long term. A big driver has been the robust returns from self-storage, industrial, and residential REITs. The factors that have enabled those REIT subgroups to deliver strong returns remain in place. That's why investors should consider adding one or more of those REIT classes to their portfolio.

<<<



---

[gfp927z]

>>> Innovative Industrial Properties (IIPR)

https://finance.yahoo.com/news/7-superstar-stocks-supercharge-dividend-203000230.html

In 2023, Innovative Industrial Properties (NYSE:IIPR) paid a $7.22 dividend per share, following constant increases for six years, and the company’s forward dividend yield stands at 7.5%. The Board’s planned dividend payout range of 75% to 85% of adjusted funds from operations (AFFO) was met by the company’s most recent quarterly dividend of $1.82 per share in Q4 2023.

Furthermore, a dividend payout ratio within the intended range suggests sustained growth potential and careful money management. Innovative Industrial Properties has a flexible and cautious balance sheet with a debt-to-total gross assets ratio of 12% and no variable-rate debt. The company’s overall liquidity at the end of Q4 2023 was over $175 million. This includes cash and short-term investments as well as availability under its revolving credit facility.

Moreover, Innovative Industrial Properties pledged up to $119.5 million in 2023 for upgrades to infrastructure, new leases, lease revisions, and property purchases. Overall, the company has a proactive attitude towards growing its property portfolio. Therefore, this facilitates the expansion of its tenant partners, as evidenced by its substantial capital commitments and investment activities.

<<<

>>> Innovative Industrial Properties, Inc. (IIPR) is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized properties leased to experienced, state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017. <<<



---

[gfp927z]

>>> Realty Income's Third-Largest Customer Is Closing 1,000 Locations. Should Investors Be Worried?


by Adam Spatacco

Motley Fool

March 19, 2024


https://finance.yahoo.com/news/realty-incomes-third-largest-customer-104500172.html


One of the most lucrative sources of dividend income is real estate investment trusts (REIT). Realty Income (NYSE: O) is a retail REIT that leases space to brick-and-mortar stores.

The company has a generous history of raising its dividend -- certainly a nice characteristic for anyone looking for passive income. However, one of Realty Income's largest customers appears to be in some trouble.

Dollar Tree is Realty Income's third-largest tenant, and the cost-conscious retailer announced last week that it plans to close 1,000 locations. Not only could this spell trouble for Realty Income, but should investors be worried about the sustainability of its dividend?

Let's dig into the full details and assess what's going on.

What's happening at Dollar Tree?

Dollar Tree is a discount retailer known for selling basic items from home goods, school supplies, candy, and more. In addition to its namesake locations, the company also operates a fleet of stores under the Family Dollar moniker.

During its fourth-quarter earnings, management announced that 1,000 stores will be closing. On the surface, this looks like pretty bad news for Realty Income. But as the old adage goes, there are three sides to every story. Before hitting the panic button, let's dig into how this scenario really impacts Realty Income.

How does this impact Realty Income?

As of Dec. 31, Family Dollar and Dollar Tree represented 3.3% of Realty Income's total annualized-contractual rent.

Per Realty Income's investor presentation, the company leases 1,229 locations to Family Dollar and Dollar Tree. While this might seem like a lot, it actually represents less than 10% of the dollar store's total store count. That's right -- Dollar Tree and Family Dollar have more than 16,000 locations combined.

This dynamic should ease some investor panic as it's clear that Realty Income is just a small fraction of Dollar Tree's overall retail footprint.

Should investors be worried?

In addition to the details explored above, there is one more important nuance as it relates to the store closures. Dollar Tree will be conducting these closures over a multiyear period and will wait for the lease terms to expire for all the identified locations.

This means that even if some of Realty Income's locations are at risk of closure, Dollar Tree will at least continue to pay rent until the lease is up. Not only does this provide Realty Income with some level of predictable income, but it also provides the company time to seek new tenants.

Moreover, Realty Income's recent acquisition of Spirit Realty now looks even savvier in retrospect. The deal broadens Realty Income's reach by opening it up to additional end-markets. The new revenue streams from the acquired properties can help mitigate any losses Realty Income potentially experiences as a result of the Dollar Tree closures.

The last important detail to point out is that Realty Income announced yet another monthly-dividend increase. On the same day the Dollar Tree news broke, Realty Income declared its 645th consecutive monthly-dividend raise since the company's inception.

I would not worry if I was a Realty Income investor. Candidly, store closures are an inherent risk of any retail-related investment. With a long-term occupancy rate of 98.2%, Realty Income has proven that it can keep its properties filled.

I see the Dollar Tree news as more of an attention-grabbing headline than an inherent risk to Realty Income's future. With such a long history of dividend raises, I think now is as good a time as ever to scoop up shares in Realty Income for passive income investors.

<<<



---

[gfp927z]

>>> The 6% commission on buying or selling a home is gone after Realtors association agrees to seismic settlement


by David Goldman and Anna Bahney

CNN

March 15, 2024


https://finance.yahoo.com/news/realtor-settlement-commission-fixing-could-141747151.html


The 6% commission, a standard in home purchase transactions, is no more.

In a sweeping move expected to dramatically reduce the cost of buying and selling a home, the National Association of Realtors announced Friday a settlement with groups of homesellers, agreeing to end landmark antitrust lawsuits by paying $418 million in damages and eliminating rules on commissions.

The NAR, which represents more than 1 million Realtors, also agreed to put in place a set of new rules. One prohibits agents’ compensation from being included on listings placed on local centralized listing portals known as multiple listing services, which critics say led brokers to push more expensive properties on customers. Another ends requirements that brokers subscribe to multiple listing services — many of which are owned by NAR subsidiaries — where homes are given a wide viewing in a local market. Another new rule will require buyers’ brokers to enter into written agreements with their buyers.

The agreement effectively will destroy the current homebuying and selling business model, in which sellers pay both their broker and a buyer’s broker, which critics say have driven housing prices artificially higher.

By some estimates, real estate commissions are expected to fall 25% to 50%, according to TD Cowen Insights. This will open up opportunities for alternative models of selling real estate that already exist but don’t have much market share, including flat-fee and discount brokerages.

Homebuilder stocks rose Friday midday on the news: Lennar shares gained 2.6%, PulteGroup shares added 1.1% and Toll Brothers shares added 1%.

For the average-priced American home for sale — $417,000 — sellers are paying more than $25,000 in brokerage fees. Those costs are passed on to the buyer, boosting the price of homes in America. That fee could fall by between $6,000 and $12,000, according to TD Cowen Insights’ analysis.

“While the settlement comes at a significant cost, we believe the benefits it will provide to our industry are worth that cost,” said Kevin Sears, president of the NAR, in a statement.

In November, a federal jury in Missouri found the NAR and two brokerages liable for $1.8 billion in damages for conspiring to keep agent commissions artificially high. Because it was an antitrust case, the NAR was potentially on the hook for triple those damages — $5.4 billion.

The NAR had pledged to appeal the case, but other brokerages settled — and, eventually, so did the NAR, on Friday.

“NAR has worked hard for years to resolve this litigation in a manner that benefits our members and American consumers,” said Nykia Wright, interim CEO of NAR, in a statement. “It has always been our goal to preserve consumer choice and protect our members to the greatest extent possible. This settlement achieves both of those goals.”

The NAR had required homesellers to include the compensation for agents when placing a listing on a multiple listing service. Although NAR has long said commissions are negotiable and that the structure helped making housing more affordable for buyers, critics have long argued that the fees were expected and homesellers felt they would lose buyers if they didn’t offer them.

Settlement could lead to lower homebuying costs

Homesellers who brought lawsuits against the NAR have argued that in a competitive market, the cost of the buyer’s agent’s commission should be paid by the buyer who received the service, not by the seller. The sellers who brought the lawsuit against the NAR and the brokerages said that buyers should be able to negotiate the fee with their agent, and that the sellers should not be on the hook for paying it.

This settlement, which is subject to a judge’s approval, opens the door to a more competitive housing market. Realtors could now compete on commissions, allowing for prospective buyers to shop around on rates before they commit to buying a home. Brokers could begin to advertise their fees, allowing customers to choose lower-cost agents. The NAR, in its announcement, did not set a suggested fee.

This marks the biggest change to the housing market in a century, said Norm Miller, professor emeritus of real estate at the University of San Diego.

“I’ve been waiting 50 years for this,” Miller said.

Although it’s unclear what the future of the housing market will look like, Miller said he expected homebuying to pick up somewhat as costs fall dramatically for homebuyers.

“There are all kinds of models we might see in the future, and no one knows what they are,” he said, suggesting some brokers may charge, say, a $3,000 fee for selling a home, while others will offer a competitive commission.

The agreement will bring sweeping reforms for millions of Americans, said Benjamin D. Brown, managing partner of Cohen Milstein Sellers & Toll and co-chair of its antitrust practice, who helped craft the settlement.

“For years, anticompetitive rules in the real estate industry have financially harmed millions of Americans,” said Brown.

Individual sellers often feel powerless to negotiate a better deal for themselves, given the risk that offering lower commissions could cause brokers to steer buyers to other properties, said Robert Braun, a partner in Cohen Milstein’s antitrust practice.

“For far too long, home sellers have faced a system recognized by many as blatantly unfair. This class action and settlement provides justice for our clients and will require important changes that help future home sellers,” said Braun.

Although most realtors are included in the settlement, agents affiliated with the brokerage HomeServices of America continue to fight the case in court, the NAR said.

The NAR said it had encouraged HomeServices of America to join the settlement, but said it was pleased to have more than 1 million of its members on board with the agreement.

“Ultimately, continuing to litigate would have hurt members and their small businesses,” said Wright in a statement. “While there could be no perfect outcome, this agreement is the best outcome we could achieve in the circumstances.”

Miller said the settlement could lead to a mass exodus of brokers from the industry — potentially half of the 2 million or so agents in America. But he said most brokers are making a living from the commissions — even if they sell just one home a year.

Lower fees mean mediocre agents are likely to leave the field, but top brokers will get more business. “The good ones will absolutely do better,” he said.

America’s fees are significantly higher than in foreign countries, Miller noted. In Israel, Singapore and the UK, brokers charge between 1% to 2% for the same thing that agents do in the United States.

Years of trouble for NAR

The NAR has been fighting off US antitrust officials and litigation for years regarding alleged anti-competitive practices. But November’s verdict marked the association’s biggest setback yet — and ultimately led to the downfall of the rules that have long protected its compensation model.

The association also faces scrutiny from the US Department of Justice, and it’s unclear whether this settlement with sellers will impact the government’s scrutiny of the brokerage industry.

The trade group has also undergone severe leadership turmoil over the past year.

In January, the former president of the NAR, Tracy Kasper, stepped down, after she said she received a threat to disclose a past personal, non-financial matter unless she compromised her position at NAR. Sears replaced Kasper earlier this year.

Kasper had just taken over the role in August 2023, after Kenny Parcell, the former president, resigned amid sexual harassment allegations that were first published by the New York Times. NAR employees reportedly said Parcell improperly touched them and sent lewd photos and texts. In the Times article, Parcell denied the accusations.

In November 2023, the chief executive of NAR, Bob Goldberg, also stepped down, and was replaced by Wright. Goldberg stepped down two days after the $1.8 billion judgment against the NAR.

<<<



---

[gfp927z]

>>> Terreno Realty Corporation Announces Development Starts in Hialeah, FL


BusinessWire

February 26, 2024


https://finance.yahoo.com/news/terreno-realty-corporation-announces-development-141500772.html


BELLEVUE, Wash., February 26, 2024--(BUSINESS WIRE)--Terreno Realty Corporation (NYSE:TRNO), an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, announced today that it has commenced construction of Countyline Corporate Park Phase IV Buildings 32 and 33 in Hialeah, Florida. Building 32 of Terreno Realty Corporation’s Countyline Corporate Park is a 164,000 square foot 36-foot clear height rear-load industrial distribution building on 8.3 acres with 53 dock-high and two grade-level loading positions and parking for 148 cars. Building 33 of Terreno Realty Corporation’s Countyline Corporate Park is a 158,000 square foot 36-foot clear height rear-load industrial distribution building on 9.0 acres with 53 dock-high and two grade-level loading positions and parking for 136 cars. The buildings are expected to be completed in 2025 and achieve LEED certification, the total expected investment is $79.1 million and the estimated stabilized cap rate is 6.0%.

Countyline Corporate Park Phase IV consists of a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings in Miami’s Countyline Corporate Park ("Countyline"), immediately adjacent to Terreno Realty Corporation’s seven fully-leased buildings within Countyline (Countyline Corporate Park Phase III). Countyline is a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75 located at the intersection of NW 170th Street and NW 107th Avenue. At expected completion in 2027, Countyline Corporate Park Phase IV is expected to contain ten LEED-certified industrial distribution buildings totaling approximately 2.2 million square feet providing 660 dock-high and 22 grade-level loading positions and parking for 1,875 cars for a total expected investment of approximately $511.5 million.

Taken together, Terreno Realty Corporation’s Countyline Corporate Park Phase III and IV will contain 17 industrial distribution buildings and 3.5 million square feet.

Estimated stabilized cap rates are calculated as annualized cash basis net operating income stabilized to market occupancy (generally 95%) divided by total acquisition cost. Total acquisition cost includes the initial purchase price, the effects of marking assumed debt to market, buyer’s due diligence and closing costs, estimated near-term capital expenditures and leasing costs necessary to achieve stabilization.

Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles; Northern New Jersey/New York City; San Francisco Bay Area; Seattle; Miami; and Washington, D.C.

<<<



---

[gfp927z]

>>> Is Prologis Stock a Buy?


by Reuben Brewer

Motley Fool

March 2, 2024


https://finance.yahoo.com/news/prologis-stock-buy-141800671.html


Prologis (NYSE: PLD) has a market cap of $120 billion, making it one of the largest publicly traded real estate investment trusts (REITs) you can buy. There's a good reason it's so large, but size alone is no reason to buy the stock of a company. In fact, Prologis, despite being a well-run company, may be a less than desirable choice for some investors. Here's what you need to know.

Prologis' business is big, diversified, and attractive

Prologis owns warehouses, which is not unique at all in the REIT sector. What sets it apart from its peers is the size and diversification of its portfolio. Prologis owns 1.2 billion square feet of leasable space spread over 5,500 properties across four continents and 20 countries. No other warehouse REIT comes close to those statistics.

Notably, the properties Prologis owns are mostly located in key global distribution hubs. So not only is its portfolio big, but its properties are located where its over 6,700 customers want to operate. Given its scale, meanwhile, Prologis can actually offer something of a one-stop shop for customers with global operations.

On top of that, the company has been benefiting from leases ending and being resigned at materially higher rates. So there's built-in growth within the active properties it owns. Prologis, however, also owns over 12,000 acres of developable land around the world. That's another $40 billion growth opportunity, by management's estimate.

Now add in a decade of dividend growth at a compound annual rate of around 11%. That's an attractive track record for any company, but particularly impressive for a REIT. The most recent annual increase was 10%, so the company is still going strong on this measure. Given the business backdrop, meanwhile, there's good reason to think the dividend growth story will continue. If you are a dividend growth investor, Prologis could be a very attractive choice.

Prologis' yield is both good and bad

Prologis is currently offering investors a 2.8% dividend yield. If you're looking to live off of the income your portfolio generates, that probably won't be the least bit exciting to you. The average REIT, using Vanguard Real Estate ETF (NYSEMKT: VNQ) as a proxy, is offering a yield of over 4.1%. This is a dividend growth stock, not a high-yield stock.

That said, the dividend yield is around the middle of the road if you look at the REIT's yield range over the past decade. So while it would be hard to suggest the stock is cheap right now, it also doesn't look expensive, using yield as a rough proxy for valuation. If you're a growth-and-income or dividend growth-focused investor, a fair price for a well-positioned industry giant like Prologis is a pretty attractive proposition.

But the stock isn't trading at depressed levels, so value investors will probably also want to take a pass here. A yield above 3% would be a far more compelling entry point if you're value conscious. However, even that might not be enough to entice a yield-focused investor.

A fair price for a great company

Prologis is not a value stock, and it's not a high yield stock. It will probably never be either of those things, given its strong industry position. But it is a solid option for dividend growth and growth-and-income investors. While it looks fully priced today, it's not a bad thing to pay a fair price for a well-run company if you have a long investment horizon.

<<<



---

[gfp927z]

>>> The Best Performing Self-Storage REITs Over The Past Year


Benzinga

by Ethan Roberts

Jan 25, 2024


https://finance.yahoo.com/news/best-performing-self-storage-reits-215814670.html


Of all the real estate investment trust (REIT) subsectors, self-storage is one of the most difficult to classify. According to the National Association of Real Estate Investment Trusts (Nareit), "Self-storage REITs own and manage storage facilities and collect rent from customers. Self-storage REITs rent space to both individuals and businesses."

Self-storage REITs often get classified as specialized REITs, but the specialized category also includes REITs that own timber, farmland, data centers and other types of properties, so it can be confusing. The basic self-storage REITs include:

CubeSmart (NYSE:CUBE), Public Storage (NYSE:PSA), Extra Space Storage Inc. (NYSE:EXR), National Storage Affiliates Trust (NYSE:NSA), U-Haul Holding Co. (NYSE:UHAL), Iron Mountain Inc. (NYSE:IRM) and AmeriCold RealtyTrust Inc. (NYSE:COLD).

But these REITs do not perform equally. Take a look at which storage companies have performed best over the past 52 weeks:


Iron Mountain Inc. is a Portsmouth, New Hampshire-based specialty REIT with a focus on information management and storage, data center infrastructure and asset lifecycle management. Iron Mountain was founded in 1951, became a REIT in 2014 and has more than 225,000 customers worldwide. In recent years, it has shifted most of its focus from paper to data storage.

In June 2023, Iron Mountain raised its quarterly dividend from $0.62 to $0.65. The forward annual dividend of $2.60 presently yields 3.84%.

In November, Iron Mountain acquired Regency Technologies, a provider of IT asset disposition (ITAD) services in the U.S. for $200 million.

Over the past 52 weeks, Iron Mountain has had a total return of 33.32%, far surpassing all the other storage REITs.


CubeSmart is a Malvern, Pennsylvania-based, internally managed self-storage REIT with 1,374 storage facilities across the U.S. It had its initial public offering (IPO) in 2004 under the name, U-Store-It. In 2011, it was rebranded as CubeSmart. Between 2012 and 2022, CubeSmart grew its funds from operations (FFO) per share by 242%. Its same-store occupancy rate was recently 92.1%.

On Dec. 7, CubeSmart announced an increase in its quarterly dividend from $0.49 to $0.51 per share. The dividend has increased by 55% over the past five years. The $2.04 annual dividend presently yields 4.46%.

On Jan. 2, Jefferies analyst Jonathan Petersen upgraded CubeSmart from Hold to Buy and raised the price target from $38 to $53.

Over the past 52 weeks, CubeSmart has had a total return of 10.11%, making it the second-best-performing self-storage REIT.


Public Storage is a Glendale, California-based, self-managed self-storage REIT that is one of the largest brands of self-storage services in the United States. Its portfolio includes 3,028 self-storage facilities with 217 million rentable square feet across 40 states. It has the largest market cap rate of all self-storage facilities with $51.63 billion.

In addition to providing storage units, it also sells packing and moving supplies and provides insurance services. Public Storage was founded in 1972 and became a publicly traded REIT in 1995 when it merged with Storage Equities. It was added to the S&P 500 in 2005. As of the end of the third quarter, its occupancy rate was 92.1%, but occupancy declined 1.2% from the third quarter of 2022.

Public Storage pays a $3 quarterly dividend. Its $12 annual dividend presently yields 4.09%.

Both Goldman Sachs and Truist Securities recently maintained Buy ratings on Public Storage. On Jan. 11, Goldman Sachs analyst Andrew Rosivach raised the price target from $307 to $340, and on Dec. 28, Truist Securities analyst Ki Bin Kim raised the price target from $285 to $315.

Over the past 52 weeks, Public Storage has had a total return of 5.09%, the third largest return among self-storage REITs.


Extra Space Storage Inc. is a Salt Lake City-based self-storage REIT with over 3,500 self-storage properties, comprising 2.5 million units totaling 280 million square feet across 43 states and Washington, D.C. It has a market cap of $32.72 billion.

In July 2023, Extra Space Storage and Life Storage Inc. completed a merger in an all-stock transaction that added 1,200 properties to Extra Space's total portfolio, making it the largest self-storage company in the United States.

On Jan. 11, Goldman Sachs analyst Caitlin Burrows maintained a Buy rating on Extra Space Storage and raised the price target from $149 to $168.

Extra Space Storage pays a quarterly dividend of $1.62. The annual dividend of $6.48 presently yields 4.36%.

Despite being the largest self-storage REIT, over the past 52 weeks Extra Space Storage only returned 2.57%, the fourth-best total among the self-storage REITs.

<<<



---

[gfp927z]

Iron Mountain - >>> AI Revolution's Hidden Gem: This REIT Hack Profits from SMCI, AMD, and NVDA


Benzinga

by Shay Boloor

Feb 8, 2024


https://finance.yahoo.com/news/ai-revolutions-hidden-gem-reit-164844302.html


Iron Mountain Incorporated (NYSE:IRM), boasting a dividend yield of 3.8%, emerges as a pivotal investment opportunity within the real estate sector, uniquely positioned to capitalize on the exponential growth of data driven by advancements in artificial intelligence (AI). The company’s role in supporting the tech industry’s infrastructure needs, amid the rapid advancements by companies like Super Micro Computer (NASDAQ:SMCI), Advanced Micro Devices (NASDAQ:AMD), and NVIDIA (NASDAQ:NVDA), underscores its potential for growth and dividend sustainability. As AI technologies evolve and become more integrated into business operations, the demand for data storage, security, and management escalates, placing Iron Mountain at the forefront of this growing market.

The explosion of data generated by AI applications, from machine learning datasets to complex algorithms, necessitates robust data management and storage solutions. Iron Mountain, which specializes in information storage and management services, is strategically aligned with this demand. The company’s extensive portfolio of data centers and secure storage facilities is essential for businesses navigating the data-intensive landscape of AI, making Iron Mountain an integral player in the digital transformation era.

Investing in Iron Mountain offers investors a direct conduit to benefit from the AI-driven data boom. The company’s services are crucial for a wide array of industries leveraging AI, from tech giants to healthcare and financial services, all of which require secure and efficient data management solutions to harness the full potential of AI technologies. This widespread need for Iron Mountain’s services underscores its growth potential and investment appeal in an AI-driven future. Reflecting its strategic market position and confidence in its operational strategy, Iron Mountain announced a quarterly dividend of $0.65 per share in the fourth quarter of 2023, leading to an annual payout rate of $1.89.

The trade-off between growth and income that investors often face is elegantly balanced by Iron Mountain. As a REIT, it provides a steady income through dividends, fulfilling the income aspect. Simultaneously, its pivotal role in the data management sector, fueled by the AI revolution, positions Iron Mountain for significant growth, addressing the growth component investors seek.

Investing in Iron Mountain transcends traditional real estate investment, offering a strategic stake in the infrastructure underpinning the AI revolution. As the reliance on AI continues to escalate, driving unprecedented data growth, Iron Mountain’s services become increasingly indispensable, potentially enhancing its dividend prospects and solidifying its position as a compelling investment choice for those looking to capitalize on the digital and AI-driven future.

<<<



---

[gfp927z]

>>> Commercial real estate a 'manageable' problem but some banks will close: Powell


Yahoo Finance

by David Hollerith

Feb 5, 2024


https://finance.yahoo.com/news/commercial-real-estate-a-manageable-problem-but-some-banks-will-close-powell-161201936.html


Federal Reserve Chair Jerome Powell is predicting that more small banks will likely close or merge due to commercial real estate weaknesses, but that the problem is ultimately "manageable."

The central bank official made this point during a "60 Minutes" interview that aired Sunday night. It was Powell’s first comments about the industry following a new bout of turmoil cascading through the stocks of many regional banks.

"I don't think there's much risk of a repeat of 2008," Powell said, referring to a financial crisis 16 years ago that took down some of the biggest institutions on Wall Street as well as hundreds of banks across the US.

"I do think it’s a manageable problem," he added.

The new concerns about regional banks were triggered by $116 billion commercial real estate lender New York Community Bancorp (NYCB), which shocked Wall Street last Wednesday when it slashed its dividend, reported a surprise quarterly loss, and stockpiled millions for future loan losses related to commercial real estate holdings.

The stock of the Hicksville, N.Y.-based lender fell 38% on Wednesday and another 11% on Thursday, dragging the rest of the sector down with it. The stocks recovered Friday but dropped once again on Monday as New York Community Bancorp fell more than 10%.

Powell acknowledged in his "60 Minutes" interview that some smaller banks will "have to be closed" or merged "out of existence" due to losses tied to the falling values of properties across the US that are suddenly worth much less due to the Fed’s elevated interest rates and the effect of a pandemic that emptied out many city-center buildings.

But "we looked at the larger banks' balance sheets, and it appears to be a manageable problem," Powell said.

"There's some smaller and regional banks that have concentrated exposures in these areas that are challenged. And, you know, we're working with them. This is something we've been aware of for, you know, a long time, and we're working with them to make sure that they have the resources and a plan to work their way through the expected losses."

Regional banks are particularly vulnerable because they hold a lot more exposure to these properties than larger rivals. For banks with more than $100 billion in assets, commercial real estate loans only account for 13% of total credit. For smaller banks, they account for 44% of total bank credit.

Loans tied to offices and certain multifamily housing properties are showing the most weakness. Not all segments of commercial real estate are expected to face the same problems.

Demand for commercial real estate loans from US banks, meanwhile, weakened in the fourth quarter of 2023 as bank officers tightened their standards, according to a new Fed report released Monday. These officers expect standards to stay tight in 2024 on all loan categories except for residential real estate.

David Chiaverini, a regional and midsized bank analyst for Wedbush Securities, told Yahoo Finance that commercial real estate "will be managed better at some of the other banks" than at New York Community Bancorp, which also has a high level of exposure to rent-controlled apartment complexes in New York City. Those buildings account for 22% of its loans.

Chiaverini said the bank should have set aside more in reserves last year while booking a gain from its purchase of assets from the failed Signature Bank.

"The severity of the issue is, I would say, mostly idiosyncratic to New York Community Bank because they were so under-reserved relative to the risk in their portfolio," he added.

The "perfect storm" that could create problems for the rest of the industry, according to Chiaverini, is if inflation goes back up, forcing the Fed to keep rates higher for longer, and the US economy enters a recession. Borrowers would then have problems keeping up with their loans.

If those things don’t happen, the commercial real estate pain should be "manageable" for the banks, he added.

The Fed chair repeated that same word three times in his "60 Minutes" interview.

"It should be manageable," Powell said.

<<<



---

[gfp927z]

>>> Iron Mountain Incorporated (IRM) is a global leader in information management, innovative storage, data center infrastructure, and asset lifecycle management. Founded in 1951 and trusted by more than 225,000 customers worldwide, Iron Mountain serves to protect and elevate the power of our customers' work. Through a range of offerings including digital transformation, data centers, secure records storage, information management, asset lifecycle management, secure destruction, and art storage and logistics, Iron Mountain helps businesses bring light to their dark data, enabling customers to unlock value and intelligence from their stored digital and physical assets at speed and with security, while helping them meet their environmental goals.

<<<


https://finance.yahoo.com/quote/IRM/profile?p=IRM


---

[gfp927z]

>>> NVR, Inc. (NVR) operates as a homebuilder in the United States. The company operates through, Homebuilding and Mortgage Banking segments. It engages in the construction and sale of single-family detached homes, townhomes, and condominium buildings under the Ryan Homes, NVHomes, and Heartland Homes names. The company markets its Ryan Homes products to first-time and first-time move-up buyers; and NVHomes and Heartland Homes products to move-up and luxury buyers. It also provides various mortgage related services to its homebuilding customers, as well as brokers title insurance; performs title searches in connection with mortgage loan closings; and sells mortgage loans to investors in the secondary markets on a servicing released basis. The company primarily serves in Maryland, Virginia, West Virginia, Delaware, New Jersey, Eastern Pennsylvania, New York, Ohio, Western Pennsylvania, Indiana, Illinois, North Carolina, South Carolina, Florida, Tennessee, and Washington, D.C. NVR, Inc. was founded in 1980 and is headquartered in Reston, Virginia.

<<<


https://finance.yahoo.com/quote/NVR/profile?p=NVR


Note - NVR is a Berkshire holding



---

[gfp927z]

>>> Realtors found liable for $1.8 billion in damages in conspiracy to keep commissions high


CNN

by Elisabeth Buchwald

November 2, 2023


https://finance.yahoo.com/news/realtors-found-liable-1-8-191400056.html


Washington, DC (CNN) — A Missouri jury on Tuesday found the National Association of Realtors, a real estate industry trade group, and some residential brokerages liable for nearly $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high.

The lawsuit covered home sales that took place between April 2015 to June 2022.

“We view it as a tremendous day of accountability for these companies,” Michael Ketchmark, the lead attorney for the plaintiffs, told CNN.

Despite the verdict, the matter is still far from being resolved.

“This matter is not close to being final. We will appeal the liability finding because we stand by the fact that NAR rules serve the best interests of consumers, support market-driven pricing and advance business competition,” NAR president Tracy Kasper said in a statement after the verdict was announced.

However, she said NAR “can’t speak to the specifics” to its basis of appeal until it is filed. “In the interim, we will ask the court to reduce the damages awarded by the jury,” Kasper added.

Warren Buffett’s Berkshire Hathaway-owned HomeServices of America and two subsidiaries, as well as Keller Williams Realty, were among the other real estate groups the jury found guilty of conspiring.

A spokesperson from HomeServices told CNN the company is “disappointed with the court’s ruling and intends to appeal.”

“Today’s decision means that buyers will face even more obstacles in an already challenging real estate market and sellers will have a harder time realizing the value of their homes,” the spokesperson said.

Keller Williams did not immediately respond to CNN’s request for a comment.

Ketchmark said groups like HomeServices are claiming this “because they’re desperate to hang on to the system that they have rigged against everyone.”

“They made that same argument in court for the last couple of weeks and it took a jury all of two and a half hours to disregard it,” he said.

Appeals process could be protracted

The appeals process could take up to three years, said Jaret Seiberg, a housing policy analyst at TD Cowen. The losing party he said will likely attempt to have the case tried by the Supreme Court.

But Tuesday’s verdict does not mean “buyer commissions are a thing of the past,” he said.

The judge presiding over the case will have to decide the scope of the injunction, which could end up amounting to “minor tweaks” to the current commission-sharing system. “If that is the case, then the impact may be limited as we expect most brokers will continue to offer commission sharing to boost interest in the property,” Seiberg. added.

Minutes after Tuesday’s victory, Ketchmark filed a new class-action lawsuit against real estate companies including Douglas Elliman, Compass and Redfin. The new suit also alleges the companies violated antitrust laws by conspiring to keep commissions high.

Douglas Elliman and Compass declined to comment on the new case. Redfin CEO Glenn Kelman labeled it “a copycat lawsuit.”

<<<



---

[gfp927z]

>>> One 'safe' trade wallops another


Yahoo Finance

by Julie Hyman

October 4, 2023


https://finance.yahoo.com/news/one-safe-trade-wallops-another-100038814.html


Bond yields are the new bane of the equity market.

But unlike other market moments over the past 18 months — like when they smacked down tech stocks — the pain is being felt much more widely.

In particular, traditional interest rate sectors that had mostly shrugged off earlier surges are now taking a hit. Since the beginning of August, when the 10-year yield hit 4%, utilities and real estate have plunged, falling about 16% and 14%, respectively.

Two key factors make these sectors particularly sensitive to rising rates. First off, they tend to have high debt loads, so their servicing costs are soaring.

Secondly, these have relatively high dividend yields, so they are in direct competition with Treasuries.

The SPDR Utility ETF yields 3.3%; the SPDR Real Estate ETF yields 3.9%. Contrast that with 10-year notes, where investors’ yield is hovering around 4.75% — ever higher out to 30 years. And as government debt, it’s viewed as virtually risk-free.

The latest bout of selling in utilities in particular on Monday was sparked by a warning last week from NextEra Energy (NEE) subsidiary NextEra Energy Partners (NEP).

NextEra happens to be the largest power company in the US by market cap.

The folks over at Bespoke Investment Group highlighted the slump in utilities in their Tuesday morning note, writing that shares have been “decimated.” Looking at the sector’s five-day slide, they found it’s underperforming the S&P 500 over that period by the most in a year.

So now what? Perhaps a bounce — which investors saw (at least somewhat) on Tuesday as the SPDR Utility ETF rose 1.1% while the S&P 500 fell in counterpoint 1.37%.

“It isn’t often that you see the sector get this oversold,” Bespoke wrote in that pre-bounce note.

Cantor Fitzgerald head of derivatives and cross asset Eric Johnston said “utes” could be poised to rebound.

In a Tuesday morning note, he laid out the momentum and technical indicators showing the XLU — that utility ETF — could bounce.

“With the macro getting very dicey, investors may soon look to utes again as a place of safety. At that point, everyone has already sold,” Johnston wrote.

Utilities could prove attractive if investors get more worried about the macro picture, since they’re typically viewed as defensive, which, to be fair, is a status at times in conflict with its interest rate sensitivity.

Maybe it was just all this positive energy that fueled Tuesday’s gains. Or perhaps the bounce is real and we’re pulling up off the bottom.

<<<



---

[gfp927z]

>>> Severe Crash Is Coming for US Office Properties, Investors Say


https://finance.yahoo.com/news/severe-crash-coming-us-office-000003441.html


(Bloomberg) -- Office prices in the US are due for a crash, and the commercial real estate market faces at least another nine months of declines, according to Bloomberg’s latest Markets Live Pulse survey.

About two-thirds of the 919 respondents surveyed by Bloomberg believe that the US office market will only rebound after a severe collapse. An even greater majority says that US commercial real estate prices won’t hit bottom until the second half of 2024 or later.

That’s bad news for the $1.5 trillion of commercial real estate debt that according to Morgan Stanley is due before the end of 2025. Refinancing it won’t be easy, particularly the roughly 25% of commercial property that is office buildings. A Green Street index of commercial property prices has already fallen 16% from its peak in March 2022.

Commercial property values are getting hit hard by the Federal Reserve’s aggressive tightening campaign, which lifts a key cost of owning property — the expense of financing. But lenders looking to offload their exposure now are finding few palatable options, because there aren’t many buyers convinced the market is close to a bottom.

“Nobody wants to sell at a huge loss,” said Lea Overby, an analyst at Barclays Plc. “These are properties that don’t need to be sold for long periods of time, and that means holders are likely to delay a sale as long as they can.”

Adding to the trouble is stress among regional banks, which held about 30% of office building debt as of 2022, according to a March report from Goldman Sachs Group Inc. Smaller banks saw their deposits shrink by nearly 2% over the 12 months ended in August, according to the Fed, after Silicon Valley Bank and Signature Bank collapsed. That translates to less funding for the banks, giving them less capacity to lend.

Pain from higher interest rates can take years to filter through to owners of the US commercial real estate, which Morgan Stanley values at $11 trillion in total. Investors in office buildings, for example, often have long-term fixed-rate financing in place, and their tenants can be subject to long-term leases as well.

It will take until 2027 for leases that are in place today to roll over to lower revenue expectations, according to research by Moody’s Investors Service published in March. If current trends hold, then revenues by then will be 10% lower than today.

“It tends to be a slow reckoning for US real estate when rates change,” Barclays’s Overby said. “And the office sector is deeply distressed, which will take a long time to work out.”

Even if there is a serious and prolonged downturn in US commercial real estate, including major loan losses from a cratering office sector, Overby isn’t worried it will threaten overall market stability. The property sector is large, but the debt is spread across a wide enough array of investors to absorb losses, she said.

Besides high interest rates, offices are struggling with tenants cutting back or moving out, with the trend especially strong in the US, where office workers are more reluctant to badge in than in Europe or Asia. Some of the resistance to the return to offices could be attributed to commuting pains. More than 40% of MLIV Pulse respondents said they would be enticed to come to the office more often if they had better public transit options available. Faster, more frequent or cheaper public transit options may be of particular appeal to Americans and Canadians. Among 649 respondents from that region, about half said they currently use a car to get to the office.

About 20% of respondents said that they moved farther away from their office during the pandemic and only 3% regretted their escape. Nearly a third said their commutes got longer than before Covid, probably either because they moved, or because of pandemic-era transit service cuts.

<<<



---

[gfp927z]

>>> Prologis to buy industrial properties from Blackstone for $3.1 billion


by Reuters

June 26, 2023


https://www.msn.com/en-us/money/other/prologis-to-buy-industrial-properties-from-blackstone-for-3-1-billion/ar-AA1d3tsV?OCID=ansmsnnews11


(Reuters) - Prologis Inc said on Monday it has agreed to buy 14 million square feet of industrial properties from real estate funds affiliated with Blackstone for $3.1 billion in an all-cash deal.

The acquisition price represents about "4% cap rate in the first year and a 5.75% cap rate when adjusting to today's market rents", the warehouse-focused real estate investment trust (REIT) said in a statement.

This deal expands Prologis' presence to Atlanta, Washington DC, California, Dallas, Las Vegas, New York regions, Phoenix and South Florida, and its relationship with 50 existing customers and adds 77 new customers.

The company plans to hold all of the properties acquired. It currently owns 1.2 billion square feet of logistics real estate in 19 countries.

"This transaction demonstrates the exceptional demand for high-quality warehouses. With near record-low vacancy, logistics remains a high conviction theme for us," Nadeem Meghji, head of Blackstone Real Estate Americas, said.

Prologis and Blackstone have completed more than a dozen transactions together in the past 11 years, according to the statement.

Prologis has been expanding its presence in the U.S., with the company last year acquiring Duke Realty Corp for about $23 billion, including debt, in an all-stock deal.

The deal with Blackstone is expected to close by the end of the second quarter.

Eastdil Secured, Barclays, BofA Securities, Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs, J.P.Morgan Securities, Morgan Stanley, PJT Partners and Wells Fargo acted as financial advisers to Blackstone.

<<<



---

[gfp927z]

>>> Landlords Face a $1.5 Trillion Bill for Interest Only Commercial Mortgages

Interest-only loans as a share of new commercial mortgage-backed securities issuance increased to 88% in 2021, up from 51% in 2013, according to Trepp.


Mish Talk

JUN 6, 2023


https://mishtalk.com/economics/landlords-face-a-1-5-trillion-bill-for-interest-only-commercial-mortgages


Share of Interest Only Commercial Mortgage Backed Securities




Commercial Real Estate Bust

A trend to walking away from commercial mortgages is just beginning. The Wall Street Journal reports Interest-Only Loans Helped Commercial Property Boom. Now They’re Coming Due.

Interest-only loans as a share of new commercial mortgage-backed securities issuance increased to 88% in 2021, up from 51% in 2013, according to Trepp. Nearly $1.5 trillion in commercial mortgages are coming due over the next three years.

Fitch Ratings recently estimated that 35% of pooled securitized commercial mortgages coming due between April and December 2023 won’t be able to refinance based on current interest rates and the properties’ incomes and values. While many malls and hotels face high default risks, the situation is particularly dire for office owners.

Mark Edelstein, chair of law firm Morrison Foerster’s global real-estate group, said he is seeing more lenders take over office buildings than at any point since the early 1990s.

Oblivious to Risks

Lenders and borrowers had widespread belief in two things, both now proven false.

Interest rates would stay low forever

Property values, already clearly in a bubble, would keep rising forever

Now a $1.5 trillion bill is coming due, with property values, especially office space and some big city hotels, plunging like a rock.

83 Percent on Securitized Office Loans in Trouble

Xiaojing Li, managing director at data company CoStar’s risk analytics team, estimates that as much as 83% of outstanding securitized office loans won’t be able to refinance if interest rates stay at current levels.

The 1,921 Room Hilton Union Square Hotel in San Francisco Was Just Abandoned

Yesterday, I noted The 1,921 Room Hilton Union Square Hotel in San Francisco Was Just Abandoned

Park Hotels & Resorts also walked away on the nearby 1,024-room Parc 55. Park Hotels & Resorts cited the continued debt burden of the two hotels and multiple factors that have made the San Francisco market less desirable.

Well, don't worry. Lenders who are handed back the keys can recoup their losses if they borrow money and plow it all into Nvdia and Apple with leverage. /sarcasm

<<<



---

[gfp927z]

>>> Blackstone REIT Continues Trend Of Bad News For Real Estate Investors


Benzinga

by Eric McConnell

June 5, 2023


https://finance.yahoo.com/news/blackstone-reit-continues-trend-bad-193739975.html


Blackstone real estate investment trust (BREIT) is known as one of America’s largest and most dependable privately held REITs when it comes to delivering investor returns. However, 2023 has proven to be a difficult year for real estate investors, and Blackstone is not immune. As of May 1, 2023, Blackstone announced it is limiting investor withdrawals from its REIT, which is worth an estimated $70 billion.

This move is not a new trend, as Blackstone has been limiting monthly investor withdrawals since November. A clause in Blackstone’s standard shareholder agreement allows the company to limit withdrawals if the total amount of the withdrawal requests exceeds 5% of the fund’s net asset value. In what can be seen as a sign of the times for the troubled real estate market, Blackstone hasn’t released an estimate on when it may fulfill all investor redemption requests.

Blackstone investors requested a combined $4.5 billion in redemptions in April, but the fund only approved the release of $1.3 billion (29%) of the total requests. In March, investors also requested a total of $4.5 billion in redemptions, only for the fund to release $666 million in funds or 15% of the total amount.

So, it’s not necessarily that Blackstone isn’t paying out at all, it’s that investors heading for the exit doors may have to wait in line before they can cash out. It’s understandable that Blackstone exercises the limitations clause on investor redemptions, but the news comes as a severe blow to investors, many of whom have been dealing with the effects of a declining real estate market for the last several months.

It’s not hard to imagine that many of the investors making the recent redemption requests were looking at Blackstone as their safe harbor REIT — the one that they could rely on when other real estate and investment holdings began to underperform. The overall trend of the commercial real estate market is down for several reasons, not the least of which is a steady diet of rate increases from the Federal Reserve.

Why Is Blackstone Suffering Right Now?

Rate increases are hitting the commercial real estate market particularly hard because of the way commercial real estate is financed. Since 2008, REITs, developers and fund managers have taken advantage of historically low interest rates to borrow aggressively because it allowed them to drastically increase the size of their portfolios. However, much of the borrowing for commercial real estate depends on shorter-term financing such as adjustable-rate mortgages (ARMs) or 15-year mortgages that need to be refinanced at some point in the life of the asset.

The need to refinance wasn’t a problem as long as interest rates stayed low. The pro-forma budget on many commercial assets assumed low interest rates, which helped REITs pay out impressive dividends while also making it easy to refinance or sell the asset at a profit to another REIT that could borrow money at a low interest rate to buy it.

When interest rates began to spike as the Fed tried to ward off inflation, a period of easy financing terms and being able to quickly liquidate assets or turn them profitable after renovations turned into the good old days. The new reality caught Blackstone and many other REITs off guard. The question facing Blackstone and other investors now is, how long will the trouble last and how bad will it get?

Hundreds of billions of dollars in commercial real estate assets may be coming up for refinancing in the next several years, and it’s already an impossibility that they will be able to complete those re-fis at the investor-friendly rates the fund managers were planning on. Some of the most dire predictions are for a wholesale slaughter, with foreclosures and plummeting asset values reminiscent of 2008.

Other prognosticators are not so bearish. They believe that there will be a market correction but that the increased liquidity requirements that were imposed on banks after 2008 should be able to stave off massive bank failures if there is a wave of commercial foreclosures.

Some of the increased liquidity requirements were relaxed for regional banks (after an extensive lobbying effort), and this move likely played a role in the collapse of several regional banks collapsed, most notably First Republic Bank, which was taken over by regulators and ultimately sold to JP Morgan Chase last month.

What Does The Future Hold For Real Estate Investors And REITs?

So, what is the long-term future for Blackstone and REIT investors? It probably lies somewhere in between the direst predictions and the most rose-colored expectations of today’s market. At a minimum, it may be a bumpy ride for the next few years, but investors should keep one important thing in mind — real estate’s performance history has shown it to be a resilient asset and a reliable one in terms of delivering returns.

The people who run REITs like Blackstone are well-versed in their fields and have proven track records of performance. As they get used to the new normal, the next stage of deals and acquisitions they make will be more reflective of the new reality confronting investors in terms of acquisitions, opportunity cost and investor returns.

For their part, investors will need to remain patient and increase their due diligence. In the meantime, they may want to consider publicly traded REITs or other investments such as tokenized real estate investing that will allow them to have greater flexibility in terms of liquidating their investment capital when the need presents itself. However, it is unlikely that real estate will cease being a vital investment sector.

<<<



---

[gfp927z]

>>> 'Commercial Real Estate Is Melting Down Fast': Elon Musk Warns Home Prices Will Be The Next To Crash — Yet One Property Type Could Prove Resilient


Benzinga

by Jing Pan

June 5, 2023

As a serial entrepreneur who co-founded Tesla Inc., revolutionized the electric car industry and is sending rockets into space, Elon Musk isn’t known for being a real estate guru. But lately, the billionaire has been sounding the alarm for the sector.

“Commercial real estate is melting down fast,” Musk said in a recent tweet. “Home values next.”

He elaborated on the dire forecast during an interview with former Fox News personality Tucker Carlson in April.

“We really haven’t seen the commercial real estate shoe drop. That’s more like an anvil, not a shoe,” Musk said. “So the stuff we’ve seen thus far actually hasn’t even — it’s only slightly real estate portfolio degradation. But that will become a very serious thing later this year, in my view.”

The Tesla CEO pointed out that the work-from-home trend has substantially reduced the use of office buildings around the world. And that does not bode well for commercial real estate.

“Almost all cities at this point have record vacancies of commercial real estate,” Musk said.

But not all commercial real estate is created equal. Here’s one type of property that could be more shockproof than others.

Medical Office Buildings

According to the latest Office National Report from commercial real estate brokerage Marcus & Millichap, medical offices face “fewer headwinds” because of the nature of their practice.

“While most medical office tenants have incorporated some degree of virtual work, hybrid interactions supplement in-person visits rather than replace,” the report said.

In other words, while the remote work trend has transformed the office property landscape, medical office buildings continue to serve a vital purpose because of the need for in-person visits.

Another compelling factor contributing to the resilience of medical offices is America’s aging population. Approximately 10,000 baby boomers reach age 65 in the U.S. every day, and the demand for medical services tends to increase as people grow older.

The report said that this demographic trend could be a backstop for long-term space demand.

To see how resilient medical office buildings are, look at Riverside-San Bernardino. The report highlighted that this region is expected to “maintain the lowest traditional office vacancy rate among major U.S. markets in 2023,” attributed in part to the presence of “strong medical office fundamentals.”

“Medical office vacancy here was at 6.8% in March,” the report said.

Getting A Piece Of The Action

Medical office buildings can be a significant investment, often requiring substantial capital to acquire. The good news? You don’t necessarily have to purchase an entire building. Nowadays, there are multiple avenues for investors to participate.

For instance, some publicly traded real estate investment trusts (REITs) own medical office properties. Investors can gain exposure to the segment by purchasing shares of these REITs.

Here’s a look at two that Wall Street finds particularly attractive.

Healthcare Realty Trust Inc. (NYSE: HR): Healthcare Realty Trust is a REIT that specializes in medical office buildings and outpatient facilities. The company’s portfolio consists of 715 properties in 35 states totaling approximately 41.8 million square feet.

Notably, 72% of the properties are on or adjacent to hospital campuses. The REIT pays quarterly dividends of 31 cents per share, translating to an annual yield of 6.7%. Barclays analyst Steve Valiquette has an Overweight rating on Healthcare Realty Trust and a price target of $25, implying a potential upside of 34%.

Ventas Inc. (NYSE: VTR): Ventas is a healthcare REIT with a broader focus. With more than 1,200 properties in the U.S., Canada and the U.K., the company’s portfolio spans senior living communities, medical offices and outpatient facilities and hospitals as well as life science, research and innovation properties. The stock offers an annual dividend yield of 4.1%. Mizuho analyst Vikram Malhotra has a Buy rating on Ventas and a price target of $53. Since shares trade at $43.70 today, the price target implies a potential upside of 21%.

Income investors are drawn to REITs because they are some of the higher-yielding names in the stock market. But remember, publicly traded REITs — including those that focus on medical properties — are still subject to the stock market’s ups and downs. If you don’t like the volatility associated with publicly traded REITs, note that there are also private market options that allow retail investors to add medical office buildings to their portfolios.

<<<



---

[gfp927z]

>>> Commercial real estate poses risks to US banks - and lenders should brace for higher interest rates, JPMorgan CEO Jamie Dimon warns


Business Insider

by Zahra Tayeb

May 23, 2023


https://finance.yahoo.com/news/commercial-real-estate-poses-risks-185708735.html


JPMorgan CEO Jamie Dimon warned commercial-real estate loans could cause problems for US banks.

"There's always an off-sides," he said. "The off-sides in this case will probably be real estate."

The bank's chief also said US lenders should be prepared for benchmark interest rates to climb as high as 7%.

The US banking sector is still recovering from the worst turmoil since the 2008 financial crisis, but its troubles may be far from over.


JPMorgan & Chase CEO Jamie Dimon has warned that the next jolt to the American banking system could come from commercial real-estate (CRE) loans.

Stress has been mounting for months in the commercial property industry, which is being buffeted by headwinds including high interest rates, tighter credit conditions, and work-from-home trends causing office vacancies. That's fueling concerns about potential loan defaults by the more vulnerable borrowers in the sector.

"There's always an off-sides," Dimon said during the bank's investor conference on Monday, per CNBC. "The off-sides in this case will probably be real estate. It'll be certain locations, certain office properties, certain construction loans. It could be very isolated; it won't be every bank," he added.

Additionally, banks - especially smaller ones - should also brace for the risk of benchmark interest rates rising even higher, possibly up to 6% or 7%, according to Dimon. The Federal Reserve has boosted its policy rate to more than 5% currently, from near-zero levels in the first quarter of 2022.

"I think everyone should be prepared for rates going higher from here," Dimon said, according to CNBC.

Small and mid-sized US regional lenders are highly exposed to the CRE industry - financing around 70% of all debt in the sector - and that's made investors anxious about the overall health of the US financial system given the risk of CRE loan defaults.

Dimon said the banking industry is already building capital for potential losses by squeezing its lending activity.

"You're already seeing credit tighten up because the easiest way for a bank to retain capital is not to make the next loan," he said.

<<<



---

[gfp927z]

>>> While Brookfield Properties defaulted on $1 billion of loans, they lost $850 million in their prior equity value in these properties.

333 S Hope Street $701 million
333 S Grand Ave $656 million
725 S Figueroa Street $497 million

These properties are essentially fully leased, although there is a substantial amount of space available for sublease. Brookfield must have been facing a lot of lease expirations they didn't think they could fill.

A US debt default would really knock the floor out from under commercial real estate values

Brookfield had previously filed an application to add a residential high-rise to Bank of America Plaza, a 55-story office tower located at 333 S. Hope Street.

The project, named the Residences at 333 South Hope Street, would replace a portion of the building's plaza and parking structure with a new 34-story edifice featuring 366 studio, one-, and two-bedroom dwellings with a 425-square-foot cafe located at street level.

At one time this added residential would have saved their bacon. -

https://downtownla.com/building/residences-at-333-south-hope-street




<<<


Re-post from -

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171954517




---

[gfp927z]

>>> New York skyscrapers sit empty as Manhattan reels from rise of home working


The Telegraph

by Riya Makwana

May 20, 2023


https://finance.yahoo.com/news/york-skyscrapers-sit-empty-manhattan-110000787.html


Simon Mitchell’s office in Union Square, New York City has had an eerily empty feel since the Covid pandemic. With four in five desks unused in a space with capacity for 300, the marketing manager only goes in when he feels like he might have some company.

Union Square was once known for its bustling bars and restaurants, into which office workers would swarm as they enjoyed their fast-paced city lives. The change in the area today is stark.

Mr Mitchell, his partner and their one-year-old baby moved to Queens just after the pandemic. He has no intention of returning to the office full time.

“Rents are sky high and if you can avoid paying City prices on food and have a flexible lifestyle, why would you go into the office more?” he says.

Not even cheap subway commuting could entice him or his colleagues back to the office, Mr Mitchell adds. “I wouldn’t even consider taking a job that didn’t offer flexibility”, he says.

While New York is starting to show signs of life, only around half the number of workers that should be in the office have returned more than a year on from the pandemic. Vacancy rates for office buildings in central New York have hit 22.7pc, up 11.4pc on pre-pandemic levels.

Meanwhile, the level of workers returning to the office has plateaued at around 60pc, data from The Real Estate Board of New York shows. The consultancy group has warned of a coming wave of “zombie” buildings rendered barely functional due to low vacancy rates.

Some skyscrapers are already lifeless. The 47-story tower at 60 Wall Street has sat empty since 2021, when Deutsche Bank – its only tenant – relocated uptown, to the edge of Central Park. The building’s owners, Singapore’s sovereign wealth fund and Paramount Group, have undertaken an expensive renovation in order to tempt in new tenants.

Eric Adams, the City’s mayor, has urged workers to return to the office as the city struggles with a shifting landscape. He said last year: “You can’t run New York City from home”.

But employees’ desire for flexibility is higher “than ever”, says David Smith, head of Americas insights, global research at Cushman & Wakefield New York. “And this demand is greater here than in any other part of the world,” he adds.

White-collar workers are fleeing New York in huge numbers for a life free from commuting, says Mr Smith, as well as the option to spend more time on their families and other personal pursuits.

“It’s particularly people in their late twenties and thirties who are unwilling to return to the office full time,” he adds.

The lack of people returning to the office has hit the local economy, with remote work costing New York around $4,661 (£3,750) annually for each worker, according to Bloomberg, as employees spend less on food and entertainment at businesses around their offices.

There is currently around 22.7 million sq ft of sublet space in New York, with this figure rising as companies look to shrink their office footprints.

Agents note that the majority of companies releasing space are in the tech or media industries. Spotify recently put 200,000 sq ft on the market for sublease at 4 World Trade Center, vacating five of its floors. Facebook also announced it is subletting roughly 250,000 sq ft of their 1.9 million sq ft office space in Hudson Yards.

In response, companies have mandated a return to the office. Blackrock, the world’s largest asset manager, on Tuesday announced that staff must be on-site for at least four days a week.

In a memo, bosses wrote: “Career development happens in teaching moments between team members, and it is accelerated during market-moving moments, when we step up and get into the mix. All of this requires us to be together in the office.

“We will shift to at least four days per week in the office, with the flexibility to work from home one day per week. This new approach begins on 11 September.”

Other companies have put similar policies in place, JP Morgan recently told its senior bankers to return to the office for a full five days, adding that slackers would be punished for poor attendance.

At the time, the bank said: “As we’ve returned to more normal patterns in our lives and work, we can all appreciate the many benefits of in-person engagement.

“We believe this is especially true when it comes to the importance of being in the office – being together improves the speed of decision making, while also providing valuable opportunities for spontaneous learning and creativity, as well as allowing our professionals to learn through our apprenticeship model.”

Blackrock’s announcement came after it committed to downsizing its headquarters in New York. Fellow asset manager Macquarie and Twitter have also shrunk their footprint.

Surprisingly, the most famous buildings in New York are not the most attractive to big name companies – and have not been for a long time, says Andrew Lim, JLL New York City research director.

LinkedIn’s head office, located in the Empire State Building, is leased for five more years. Agents have speculated that the business will look to reduce the space it occupies once its tenancy is over, with a move to more modern offices in mind.

“These older buildings have characteristics that are not as popular today with occupiers who tend to prefer newer buildings that have amenities, modern finishes and more customizable layouts,” Mr Lim says.

According to JLL, around 25 million sq ft of office space in Manhattan alone has sat empty and on the market for more than 24 months. Agents and investors believe that the next logical step would be to repurpose these buildings, with around six million sq ft of office space being considered for conversion into residential or retail space, among other uses.

On the mainland, Washington DC is leading the way by committing to converting 40 offices into residential buildings, according to Cushman & Wakefield. That trend is already spreading to the east coast, with at least four office buildings due to be converted. If it continues, New York’s empty skyscrapers could become towers of housing.

<<<



---

[gfp927z]

>>> Brookfield's Downtown L.A. Trophy Towers Falling Like Dominoes

Payments now have been missed on a $275 million loan for the 41-story EY Plaza.


Globest.com

By Jack Rogers

May 18, 2023


https://www.globest.com/2023/05/18/brookfields-downtown-l-a-trophy-towers-falling-like-dominoes/?slreturn=20230420035147


A year ago, Brookfield Property Partner’s downtown Los Angeles office portfolio encompassed 8 million square feet, including four of the city’s highest-profile trophy towers. It was not a stretch to say that the Canadian REIT dominated the downtown Los Angeles skyline.

What a difference a year makes: Brookfield has now defaulted or missed payments on collateralized mortgage backed security loans encompassing more than $1 Billion that are backed by three of its largest downtown Los Angeles office trophies...

<<<



---