Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
>>> REIT Net Acquisitions Hit Record High Of $67.8 Billion In 2021
Forbes
by Calvin Schnure
Mar 9, 2022
https://www.forbes.com/sites/calvinschnure/2022/03/09/reit-net-acquisitions-hit-record-high-of-678-billion-in-2021/?sh=519154a65c03
REITs have been on a buying spree, making $67.8 billion of net acquisitions in 2021. Several factors have contributed to these purchases, including a robust recovery in underlying property markets and solid outlook for future growth, a low cost of capital, and strong balance sheets that are in a good position to support this expansion of their real estate portfolios. And while the war in Ukraine has injected new risks and uncertainties into the outlook, the factors that supported REIT acquisitions last year leave them well-prepared for the path ahead. (Full disclosure, I am Senior Economist and SVP Research Analysis at Nareit, the worldwide representative voice for REITs and listed real estate.)
REIT net property purchases rose steadily through the year last year.
As publicly listed companies, REITs often issue common stock to raise capital to fund their acquisitions. High and rising share prices decrease REITs’ cost of capital, and also generally signal market confidence in the future prospects for income-producing real estate. The 41.3% total stock market return by REITs in 2021 provided both a strong signal to expand and also low-cost access to the capital required to do so. Indeed, REITs raised a record $126.9 billion in 2021 through issuance of common equity, preferred equity, and unsecured debt.
REIT acquisition activity increased steadily through the year, to $26.7 billion in the fourth quarter. Activity was broad-based, with nine of the 12 property sectors having positive net purchase activity, according to the Nareit T-Tracker®. Self storage REITs and residential REITs led the way, with $7.0 billion and $6.2 billion net purchases, respectively. These property sectors have been red-hot during the pandemic. Other sectors with significant net acquisitions include retail REITs and health care REITs, with $5.5 billion and $2.8 billion, respectively. These sectors came under pressure in the early phases of the pandemic, causing disruptions that led to opportunities for repositioning and consolidation.
Self storage, Residential, Retail, Health care and Industrial REITs had major purchases
Nine of the 12 REIT property sectors bought properties, on net
These acquisitions come at a time when REIT operating performance and financial performance are both on the upswing. Occupancy rates of all properties held by REITs rose to 92.3%, an increase of 325 basis points from the low point reached early in the pandemic, and have nearly returned to their levels preceding the pandemic. Across property sectors, occupancy has risen among the apartment, industrial, and retail REIT sectors, while occupancy rates have continued to decline in the office sector.
Occupancy rates reached bottom in mid-2020, but since then have risen for most sectors
Occupancy rates of REIT-owned properties are up 325 basis points from pandemic lows
Financial performance has benefited as conditions in property markets have firmed and occupancy recovers. Indeed, after having declined in 2020, earnings of the REIT sector (as measured by funds from operations (FFO)) rose 24.6% in 2021 to a record high of $64.8 billion.
REITs have strengthened their balance sheets over the past decade, reducing their leverage and locking in low interest rates for well into the future. This solid financial position has not only facilitated the recent wave of acquisitions, but has also reduced exposures to possible increases in interest rates or other shocks in financial markets in the months and years ahead.
<<<
>>> Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people's wellness and overall health care experience. Welltower?, a real estate investment trust ("REIT"), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties.
<<<
>>> Iron Mountain Incorporated (NYSE: IRM), founded in 1951, is the global leader for storage and information management services. Trusted by more than 225,000 organizations around the world, and with a real estate network of more than 90 million square feet across approximately 1,450 facilities in approximately 50 countries, Iron Mountain stores and protects billions of valued assets, including critical business information, highly sensitive data, and cultural and historical artifacts. Providing solutions that include secure records storage, information management, digital transformation, secure destruction, as well as data centers, cloud services and art storage and logistics, Iron Mountain helps customers lower cost and risk, comply with regulations, recover from disaster, and enable a more digital way of working.
<<<
>>> Founded in 1902, Lamar Advertising (Nasdaq: LAMR) is one of the largest outdoor advertising companies in North America, with over 352,000 displays across the United States and Canada. Lamar offers advertisers a variety of billboard, interstate logo, transit and airport advertising formats, helping both local businesses and national brands reach broad audiences every day. In addition to its more traditional out-of-home inventory, Lamar is proud to offer its customers the largest network of digital billboards in the United States with approximately 3,800 displays.
<<<
>>> Think Prologis Can't Get Any Bigger? Think Again
Motley Fool
By Liz Brumer-Smith
Apr 9, 2022
https://www.fool.com/investing/2022/04/09/think-prologis-cant-get-any-bigger-think-again/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Despite being the largest industrial REIT and largest REIT by market cap, Prologis still has room to grow.
Long-term demand and shortage of inventory will help it grow in the coming years.
Rumors about a potential bid to acquire Blackstone's European last-mile operations could help grow its portfolio in 2022.
The largest REIT by market capitalization has big plans underway that could supercharge its growth.
Prologis ( PLD -1.39% ) started in 1994 as a smaller real estate investment trust (REIT) focused primarily on community shopping centers. With close to three decades of acquisitions and strategic moves into industrial real estate, Prologis now holds the title of being the largest REIT by market capitalization and the largest industrial real estate owner in the world, having ownership and interest in 1 billion square feet of industrial space in 4,735 properties across 19 countries.
Given Prologis' behemoth size, some investors are unsure as to whether or not it can continue to grow. After all, being the largest in this space does mean the company risks reaching a point of market saturation, where growth is no longer easily obtained. But there are several reasons to believe that simply isn't the case with Prologis. Here's why it could get much, much bigger in 2022.
Major deal on the horizon
In late March 2022, rumors started to spread about a potential $23 billion bid for Prologis to acquire Mileway, a last-mile industrial operator in the European Union owned by Blackstone Group ( BX -2.97% ). Blackstone publicly announced its intention to recapitalize Mileway in late February 2022, during a "go-shop" period that will last up to 75 days and allow multiple bidders to shop for the acquisition of Mileway.
Acquisitions like this have become a popular way for the company to grow. Prologis completed the acquisition of DC Industrial Trust in 2018 for $8.5 billion, then Industrial Property Trust in January 2020 for $4 billion, and later, Liberty Property Trust in February 2020 for $13 billion. The deal with Blackstone would be the largest private acquisition ever and would require Prologis to raise capital for the acquisition, given it has roughly $15.5 billion available for investments.
While representatives from both parties have declined to comment, this move would notably add to Prologis' portfolio in the EU and make the company a heck of a lot bigger. Mileway's portfolio consists of roughly 14.7 million square meters of industrial space, which equates to roughly 158 million square feet of industrial space, in 1,700 properties across 10 countries in the EU.
There's more than one way to grow
Prologis has also recently announced its plan to further expand its existing presence in the U.S. market, adding nearly 40% to its footprint in Portland, Oregon. Expansion projects and acquisitions are key factors in portfolio growth, but expanding its footprint isn't the only thing the company is relying on to grow its revenues.
Demand for industrial space due to limited supply has driven global rents up 15.4% year over year for the full year of 2021. The U.S. markets have seen rents increase an average of 17.4% in the last year. This has translated into a nice boost in revenues from Prologis while achieving historically low vacancy rates. High demand and low supply driving increased rental growth are a trend Prologis expects to see maintained in 2022. However, first-quarter 2022 earnings, which will be shared on April 19, 2022, will provide more insight into the growth it achieved at the start of the year.
Long-term demand drivers, including supply chain issues and continued growth of e-commerce, should mean industrial building demand isn't faltering anytime soon. Prologis is in a strong position for future growth. Right now, shares are trading at roughly 40 times its funds from operations (FFO), meaning it is richly valued.
Its premium pricing isn't a huge surprise, given its title of being the largest and leading industrial operator across the globe, and also its reliability as a company. It's maintained consistent growth and paid reliable dividend payments. It recently raised its dividend payout by 25% and certainly has room to grow. There are several other worthwhile industrial REITs to invest in that aren't trading at such a high premium, but investors shouldn't underestimate the benefit of having exposure to the largest -- and one of the best -- operators in the industry.
<<<
EXR, SBAC, FR, SUI, EQIX - >>> Who Says You Can't Beat the Market? These 5 Stocks Did
Motley Fool
By Matthew DiLallo
Apr 9, 2022
https://www.fool.com/investing/2022/04/09/who-says-you-cant-beat-the-market-these-5-stocks-d/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Many real estate investment trusts have beaten the market over the years.
Their ability to steadily expand their portfolios and dividends has been a key value creator.
These top-performing REITs should be able to continue enriching their investors in the future.
This group of stocks has significantly outpaced the S&P 500 over the past decade.
As a whole, investors have vastly underperformed the market. According to the most recent Quantitative Analysis of Investor Behavior survey, the average equity investor has only seen a 6.2% annualized return over the last 30 years. That vastly trails the S&P 500's 10.7% annualized return.
The issue is more human nature than stock picking ability. We often let emotion get the best of us, buying when momentum is high and selling when stock prices are low. If investors take a more patient approach and hold on to stocks that have consistently beaten the market, they'd have a much better chance of outperforming. Here are five stocks that have outpaced the market by a wide margin over the last 10 years. All are in the same sector -- real estate investment trusts (REITs) -- which shows that even lower-risk investments like commercial real estate can beat the market.
Cashing in on storing stuff
Extra Space Storage ( EXR -0.03% ) has delivered a nearly 900% total return over the last 10 years. That roughly 25.9% annualized return has significantly outperformed the S&P 500's 295% total return (14.7% annualized).
The self-storage REIT has a straightforward business model. It leases space in its mini storage units to people who need extra space to store their stuff. It also manages these facilities for third-party owners. Extra Space Storage has generated such amazing returns by steadily raising rental rates and expanding its portfolio. That's given it the cash to pay a growing dividend. With demand for storage space remaining strong, the REIT should be able to continue growing in the future.
Towering growth
SBA Communications ( SBAC 0.22% ) has delivered a nearly 630% total return over the last decade (22% annualized). The infrastructure REIT has provided those fantastic returns by steadily expanding its cell tower portfolio. That has allowed it to benefit from the growing demand for communications infrastructure.
Last year, SBA Communications bought cell towers in Tanzania and started building new ones in the Philippines, adding two more growth markets to its portfolio. It now operates in North, Central, and South America, South Africa, Tanzania, and the Philippines. With demand for data infrastructure expected to keep growing, SBA Communications should be able to continue expanding in the coming years.
Building value
First Industrial ( FR -1.09% ) has generated a nearly 550% total return over the last 10 years (20.5% annualized). The industrial REIT has benefited from growing demand for logistics real estate like distribution centers.
Development has been a significant contributor to First Industrial's ability to create shareholder value. It has invested over $1.1 billion to develop roughly 15.2 million square feet of warehouse space over the last six years. These investments have created an estimated $868 million in value for shareholders. With an extensive development pipeline, First Industrial should be able to continue growing value for its investors in the coming years.
Homing in on consolidated fragmented industries
Sun Communities ( SUI 0.40% ) has delivered a more than 510% total return in the last decade (19.9% annualized). The residential REIT has grown shareholder value by acquiring and developing non-traditional residential real estate like manufactured home communities, RV resorts, marinas, and holiday parks. It has purchased $9.6 billion of these properties since 2010.
Sun Communities' consolidation strategy saw it invest $1.5 billion to acquire 11 manufactured home communities, 24 RV resorts, and 21 marinas last year. The REIT also unveiled a $1.3 billion deal to acquire the second-largest holiday park owner in the U.K. The company sees an enormous opportunity to continue consolidating those fragmented sectors, which should drive steady growth for years to come.
Dialed into the data infrastructure boom
Equinix ( EQIX -2.22% ) has produced a more than 500% total return in the last decade (19.7% annualized). The data center REIT has benefited from the growing demand for infrastructure to store data.
Equinix has invested billions of dollars in building and buying new data centers. The company recently entered Africa by acquiring MaineOne in a $320 million deal and expanded into Chile and Peru by acquiring four data centers from Entel for $705 million. It also plans to invest more than $2 billion in 2022 to develop additional data centers worldwide. With demand for data infrastructure expected to continue growing, Equinix should have no shortage of expansion opportunities.
Lots of ways to win
Many REITs have beaten the market by steadily expanding their portfolios and dividends. The key for investors is to find a great REIT and then hold on and let it grow shareholder value over the long term. These five are an excellent place to start. They all have a history of creating value for investors and have a long growth runway still ahead.
<<<
Farmland Partners - >>> This Colorado CEO grew a farmland REIT into a billion-dollar public company
Colorado CEO's 25-employee public company owns $1.1 billion in land in 17 states.
By Greg Avery
Denver Business Journal
Mar 25, 2022
https://www.bizjournals.com/denver/news/2022/03/25/colorado-paul-pittman-farmland-partners-inc.html?ana=yahoo
Paul Pittman brought a combination of Midwestern farming and corporate finance together in a public company in Denver.
He’s the top executive of one of the few companies connecting the world of finance to farming and agriculture, a real estate company that’s a landlord to tenant farmers around the country and allows investors to benefit from the farmers’ success feeding people.
The business is a culmination of the lifetime of experience for Pittman, one that embodies his belief that "everybody gets to eat" and is tied to Colorado because of his passion for the state’s iconic sport, skiing.
Pittman grew up around farms in Illinois, the son of a schoolteacher who partly owned a family farm. He worked on a dairy farm as a teenager and went to college at the University of Illinois to study agriculture.
But U.S. agriculture was in crisis, a time when it seemed the traditional family farm might not survive.
“I graduated in 1985, the worst year for agriculture since the Great Depression, maybe even worse than then,” he said. “It was a terrible time to go into farming.”
The first Farm Aid concert was held the same year in a field in Illinois to raise money and awareness about a wave of U.S. farm failures.
Pittman was a good student, though, so he studied more. He attended graduate school at Harvard University and then law school at the University of Chicago before establishing a career in Wall Street finance that took him to live in New York City and London.
His company, Farmland Partners Inc. (NYSE: FPI) is one of only a couple of real estate investment trusts that focus on agricultural land.
The 25-employee company owns 160,200 acres in 17 states and generates money from the lease payments of tenant farmers working the land. The company’s land holdings are worth $1.1 billion. It also owns a couple of small cattle feedlots, a farm auction business and lends money to finance farm operations.
Investors can buy shares in Farmland Partners and invest in agriculture in the same way that other REITs allow investors to buy into multifamily or commercial real estate.
The only other agricultural REIT in the U.S. invests in specialty cropland. Farmland Partners is unique in that it aims to own productive land that mirrors the geography and crops of the nation, Pittman said. That ties the company to everything from corn, wheat, soybeans and cotton to cattle and potatoes.
Living internationally when he worked in M&A finance, he needed a U.S. home to return to, he said. He’d developed a passion for skiing, and nowhere had a higher concentration of world-class resorts than Colorado, so Pittman made his domestic residence in Breckenridge.
He focused on international mergers and acquisitions, which in the early 2000s pulled him into being an executive at technology businesses, including Denver-based building industry software company HomeSphere.
By 2008, he was among the executives running Southern California semiconductor maker Jazz Technologies, a company that included Apple co-founder Steve Wozniak as chief technology officer. After the management sold that business, Pittman’s roots called him.
“I told my wife I’m going back to do what I always wanted to do, and farm,” he said.
He’d assembled some land in southern Illinois and started farming there. He understood what made good farmland — good quality soil, plus access to abundant, predictable and replenishable water supplies. He farmed for six years, learning something new about himself.
“I was an OK farmer, not a great one,” Pittman said, “but I was a good land guy.”
Pittman started investing more broadly in farmland, acquiring properties in Nebraska and Colorado that would become part of Farmland Partners.
The company went public in 2014, based in Denver where it was easy to find skilled employees, and a city with a strong connection to agriculture. Denver’s location and airport access meant equally easy access to U.S. farm country and skiing, Pittman said.
Farm fields in areas with many successful farmers always attract tenants who can make the land productive, Pittman said. With a growing population needing to eat and cities growing into rural areas, that makes good farmland a terrific investment.
“If you have ever-increasing demand for the product coming off the land and an ever-decreasing supply of the land, it’s a great long-term opportunity,” Pittman said.
The company’s been able to acquire farm properties from other local investors, often successful doctors or dentists from rural areas who invested, or people who inherited farmland but don’t work it themselves.
“We’re primarily buying from remote owners,” Pittman said. “The perception is that we buy land from farmers, the guy driving the tractor, but that’s rarely what happens.”
The land itself is valuable because of the farming on it and the leases farmers commit to on the land. Farmland Partners relies on having good relations with successful farmers in each area where it owns land, which helps ensure there’s a tenant for all Farmland Partners’ acreage.
That requires an understanding of agriculture, local knowledge of the community, a willingness to do deals considered small by Wall Street standards, and a view of farmland as a long-term investment. That’s not a combination commonly found in many investment funds, Pittman said.
Pittman is married to Julie Levenson Pittman, who runs her own investment bank. The couple has two daughters, one in college and another in high school.
Pittman's free time often involves being outside, skiing in winter and lake fishing in warm seasons.
He’s been involved in winter sports program in Breckenridge over the years.
Pittman’s guilty pleasure is also on the slopes. When he can, Pittman takes heli-skiing trips to carve turns in untracked mountain snowfields.
“There’s an absolute child-like joy in descending in deep powder,” he said. “Plus, it doesn’t hurt when I fall.”
He’s a voracious reader, a habit he says he learned in law school, especially of history. He’s particularly fascinated by Winston Churchill, Britain’s leader in World War II, who Pittman finds laudable because Churchill was willing to resist public sentiment, confront fascism and played an outsized role in preserving a free and democratic Western world.
Pittman’s long been involved in Colorado Concern, a group that advocates for public policies that support business and entrepreneurs, because he believes business, and the wealth it allows people to create, is the engine of advancement for society.
<<<
>>> 2 Unstoppable Real Estate Trends That Could Make You Richer
Motley Fool
By Kody Kester
Apr 6, 2022
https://www.fool.com/investing/2022/04/06/got-1000-2-unstoppable-real-estate-trends-that-cou/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Digital Realty Trust offers a market-beating dividend yield with decent growth prospects.
American Tower can provide investors with a market-topping payout and rapid growth potential.
Neither of the two stocks appear to be excessively valued.
Data centers and telecom towers are two steadily growing industries.
Amid all of the noise that comes from day-to-day price swings of stocks, it's easy for investors to lose focus if they're not careful. But by insisting on investing in the best stocks with reasonable valuations in industries with promising trends, I believe investors will still see the big picture.
Due to the ever-present role that technology plays in the modern economy, tech-oriented real estate investment trusts (REITs) will almost certainly benefit from strong growth in the years ahead. Let's dig into two tech-related real estate trends that could create meaningful wealth for investors as the years progress.
1. Data centers
A data center is a physical location or building that stores and computes data. Businesses, individuals, and governments all rely on data centers for the proper functioning of email, websites, online transactions, and more. As technology evolves and the global economy grows, it isn't hard to imagine that data centers will become more embedded into our lives.
This is precisely why analysts anticipate that the global data center market will nearly triple from $187.4 billion in 2020 to $517.2 billion by 2030. Few stocks will benefit from this unstoppable trend as much as Digital Realty Trust ( DLR 0.84% ). That's because its $42 billion market capitalization and portfolio of more than 285 data centers make it one of the largest data-center REITs in the world.
Digital Realty's leadership in the data center industry explains how its core funds from operations (FFO) per share have compounded at 10% annually since 2005. Despite its massive size, the industry outlook should propel Digital Realty's core FFO per share higher by the mid to upper single digits annually in the foreseeable future.
And due to the stock's 70% dividend payout ratio in 2021, the dividend should grow in line with core FFO per share. That's why I believe Digital Realty has many years of 5% to 6% annual dividend increases left in the tank. Paired with a market-beating 3.3% dividend yield, this is an appealing combination of starting yield and growth potential.
And with the tech sell-off year to date, Digital Realty's stock has plunged 16%. As a result, it is priced at a core-FFO-per-share multiple of just 21.4. That's made this dividend growth stock a smart real estate company to buy right now.
2. Telecom towers
Like data centers, telecom towers are already an important part of the global economy. These structures allow us to perform a variety of activities on our smartphones that we might take for granted, like reading and sending email, surfing the internet, online shopping, and online banking.
Increased mobile data consumption and penetration rates of telecom towers in rural areas are two reasons the global telecom tower market is expected to generate massive growth. Analysts are predicting that the industry will nearly triple from $39.5 billion in 2018 to $114.1 billion by 2026.
With a $120 billion market cap, pandemic-proof American Tower ( AMT 1.43% ) is the largest telecom tower stock in the world. That status has allowed its adjusted funds from operations (AFFO) per share to grow 13.8% annually over the last decade.
And with that encouraging industry forecast, American Tower should continue to grow AFFO per share annually in the high single digits to low double digits over the medium term. Along with its dividend payout ratio of just 54% in 2021, this is probably why the company is confident enough to be targeting 12.5% dividend growth in 2022. Considering American Tower's 2.2% dividend yield, this is an attractive blend of income and growth prospects.
And similar to Digital Realty, the stock has been lumped into the tech sell-off this year. With shares down 10% year to date, American Tower is trading at around $260 per share. For a stock with this quality and growth profile, that makes it a solid buy.
<<<
IIPR, CUBE, FPI, MPW, DRE - >>> These 5 Real Estate Stocks Can Pay for Themselves
Motley Fool
By Justin Pope
Mar 25, 2022
https://www.fool.com/investing/2022/03/25/these-x-real-estate-stocks-pay-for-themselves/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
REITs are real estate companies that pay out their profits as dividends.
You can diversify your ownership of REITs to get exposure to many different industries.
Put your hard-earned cash into these REITs, and they will pay you back in steady dividends over the long term.
Owning real estate is one of humanity's most established and reliable wealth-building tools. You had to be rich back in the day to own investment property, but that's no longer the case.
You can invest in real estate investment trusts (REITs), businesses structured to own and lease real estate, and pay profits to shareholders as dividends. You can buy and hold a diversified portfolio of REITs like those listed below and let them pay back your investment little by little.
1. Innovative Industrial Properties
Cannabis is illegal at the federal level in the United States, making it hard for growers and other cannabis businesses to access much-needed financing. Innovative Industrial Properties ( IIPR 2.57% ) helps solve this by acquiring property from cannabis companies and then leasing it back to them. This unlocks the equity in the property that cannabis companies can use to invest in growing their business.
The stock's dividend yield is 3.5% based on the current share price. Cannabis is becoming an increasingly hot industry, so business has been great for Innovative Industrial. In 2021, the company's cash profits (referred to as funds from operations, or FFO) grew 78% over 2020.
2. CubeSmart
Self-storage is always in demand; people experience many life events that necessitate storage, from moving to changing jobs or simply needing a place for their stuff. CubeSmart ( CUBE -1.48% ) owns and operates 1,258 such facilities across the United States.
The company's footprint focuses on urban areas, especially East Coast states like New York and New Jersey. It's a consumer-facing brand, operating self-branded locations.
The business has been steady and successful; CubeSmart has grown its FFO per share by 7.3% annually since 2017, making it a reliable dividend stock. The company's dividend yield is currently 3.4%, and the payout has been raised an average of 6.9% annually over the past five years.
3. Farmland Partners
Land isn't a flashy asset, but there is only so much of it, and farmland is becoming increasingly scarce with housing and other developments spreading across North America. Farmland Partners ( FPI -0.64% ) owns and leases roughly 186,000 acres of farmland across 19 states to those who grow commercial crops.
The REIT has steadily acquired land, buying roughly 300 properties since its initial public offering (IPO) in 2014. Farmland Partners pays a dividend that yields 1.5% at the current share price. Its non-GAAP FFO grew 91% year over year in 2021, and the company could see long-term tailwinds as it acquires more properties while farmland becomes increasingly scarce over the years.
4. Medical Properties Trust
Healthcare is a pillar of the global economy, and Medical Properties Trust ( MPW -1.30% ) is the second-largest non-government owner of hospitals globally. It has more than 400 facilities, with properties in North America, Europe, South America, and Australia. The REIT uses net leases, which put all the costs of occupying a property -- like taxes, insurance, and maintenance -- on the tenants, making Medical Properties a more-stable business.
Investors can enjoy a sizable 5.6% dividend yield and expect the dividend to grow about $0.04 per share annually, which it's done every year since 2014. The business generated $976 million in FFO in 2021, a 29% increase over 2020. Healthcare should prove to be a resilient industry over the long term, especially as populations continue to age worldwide.
5. Duke Realty
Logistics are an often-forgotten piece of how items ship from point A to point B in this age of e-commerce. Duke Realty ( DRE -0.68% ) owns and operates roughly 160 million square feet of space across 19 major markets in the United States. The company focuses on warehouses for e-commerce, an industry that isn't going away anytime soon.
Investors will get a dividend yield of 2% at the current stock price. The company's FFO per share grew to $1.73 in 2021, a nearly 14% increase over 2020. Duke Realty recently started developing nine new projects in 2021, at an expected cost of $466 million. These continued investments should help drive business growth. E-commerce is still just 14% of total retail sales in the United States, so there should be more demand for logistics space in the future.
<<<
Crown Castle, Medical Properties Trust - >>> 3 Unstoppable REIT Stocks to Buy in April
Motley Fool
By Kody Kester
Apr 2, 2022
https://www.fool.com/investing/2022/04/02/3-unstoppable-reit-stocks-to-buy-in-april/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Crown Castle's infrastructure is essential to large telecom stocks like Verizon and T-Mobile.
Medical Properties Trust owns a leading portfolio of hospital real estate around the world.
STORE Capital's real estate portfolio is spread across all U.S. states but one.
These high-yielding dividend stocks each appear to be no-brainer buys.
There has been no shortage of market volatility through the first three months of this year. After dropping by more than 10% and entering into a correction on Feb. 22, the S&P 500 index has clawed most of the way back.
The index is only 4% off of its 52-week high. But some of the highest-quality dividend stocks are still trading well below their 52-week highs. Let's take a look at three high-yielding real estate investment trusts (REITs) that are still in corrections, which could be great buying opportunities in April.
1. Crown Castle International
As you're reading this article, there's a nearly 50% chance that you are doing so on your smartphone. This is supported by the fact that mobile devices accounted for 47.3% of U.S. web traffic in the fourth quarter of last year.
Although its name doesn't reflect it, Crown Castle International ( CCI 0.03% ) is the largest pure-play cell tower REIT in the U.S. The odds are high that your mobile service is made possible by Crown Castle's infrastructure, which is leased out to major service providers like T-Mobile and Verizon Communications.
Average monthly mobile data consumption per user in North America is set to more than quadruple from 11.8 gigabytes (GB) in 2020 to 49 GB by 2026. Thus, demand for Crown Castle's infrastructure should continue to grow.
This explains why Crown Castle's long-term annual dividend growth target is 7% to 8%. Paired with the stock's market-beating 3.2% dividend yield, this is an attractive mix of yield and growth.
And thanks to the fact that Crown Castle is lumped in with tech stocks, it's nearly 10% off of its 52-week high. Income investors can buy the stock's shares at a valuation of 25 times its adjusted funds from operations (AFFO) per-share midpoint forecast of $7.36 for 2022. This is a reasonable valuation for a stock of Crown Castle's quality and growth prospects.
2. Medical Properties Trust
The next REIT to contemplate purchasing in April is Medical Properties Trust ( MPW -1.30% ). Medical Properties Trust is one of the largest owners of hospitals in the world, with a $22.3 billion portfolio throughout the U.S. and eight other countries.
Through the first two years of the COVID-19 pandemic, many REITs struggled to maintain their AFFO per share. But Medical Properties Trust managed to increase its AFFO per share at double-digit rates in 2020 and 2021. This is in large part because hospitals rarely close down due to their essential nature within the communities that they serve.
Because Medical Properties Trust estimates that the U.S. hospital real estate market alone is worth $1 trillion, the company should have many years of growth left in its tank. This should fuel mid-single-digit annual dividend increases for the foreseeable future, which is especially enticing considering the stock's market-crushing 5.4% dividend yield.
And with Medical Properties Trust's stock 11% under its 52-week high, investors can snatch up shares at a trailing-12-months price-to-AFFO per- share multiple under 16.
<<<
Realty Income - >>> Why Is This $1.7 Billion Real Estate Acquisition So Important?
Motley Fool
By Reuben Gregg Brewer
Apr 2, 2022
https://www.fool.com/investing/2022/04/02/why-is-this-17-billion-real-estate-acquisition-so/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Realty Income bought competitor VEREIT in 2021, massively increasing the scale of its business.
Realty Income stated from day one that VEREIT would give it the wherewithal to do deals that other REITs couldn't even look at.
The purchase of a casino in Boston proves the point and shows just how much distance there is between Realty Income and its peers.
Realty Income just proved the thesis for the VEREIT acquisition. Competitors are now at a disadvantage on bigger deals.
Net lease real estate investment trust (REIT) Realty Income ( O -0.47% ) is a bellwether name in its niche and the broader REIT universe. That was true before it bought VEREIT in 2021, but now that this deal has been consummated, the power of the combined companies is on clear display. Indeed, Realty Income's $1.7 billion acquisition of a casino is the type of deal that separates it from the pack.
The basics of the REIT
Realty Income owns single-tenant properties for which its lessees are responsible for most of the operating costs of the assets they occupy. That's what is known as a net lease. Any single property is a high-risk investment, given that there's only one tenant. But spread over a large enough portfolio of properties, it's a fairly low-risk investment approach. Before the VEREIT acquisition, Realty Income had a giant portfolio of around 6,500 properties. After the deal, the portfolio jumped to more than 11,000.
Often, net lease REITs buy properties with sale/leaseback deals, by which the owner sells the asset to the REIT and then turns around and signs a long-term lease. The now previous owner gets cash that can be used to support things like capital investment plans, and the REIT gets a reliable and usually happy tenant. It's as close to a win/win as you can get. However, different types of property require different amounts of investment. Realty Income owns a lot of small retail assets, which are fairly cheap to acquire. Peer W.P. Carey has more exposure to warehouses and industrial facilities, which are larger and cost more to buy. That's important here, because one of the reasons Realty Income bought VEREIT was to gain enough scale to take on really big deals.
The big deal and more to come
This is why Realty Income's decision to buy Encore Boston Harbor from Wynn Resorts ( WYNN 1.50% ) is so important. It is a single property that cost $1.7 billion. Some REITs specialize in owning casinos, so a REIT buying such an asset isn't shocking. But Realty Income stepping up to do it -- now that's a statement. The company expects this single property to account for around 3.5% of its rents. This is a huge asset, noting that's about as much rent exposure as the all of the 550 or so Dollar Tree stores Realty Income has in its portfolio.
To be fair, that Realty Income inked a big deal isn't at all shocking. Management stated that this was a goal. The only shock is that it was a casino, which takes the REIT a little outside its comfort zone. But it sets the stage for good things to come; the deal brought with it a huge 30-year lease. The outlook is positive because Realty Income has been working to expand in Europe, where net lease penetration isn't that large yet. One of the key factors for sellers is finding companies with which they can comfortably form long-term relationships and do multi-property deals. Realty Income is clearly just such a company, and the size of the casino deal helps to prove it.
The upshot for European companies looking to raise capital via sale/leaseback deals is they can do one big deal with Realty Income instead of multiple small ones with different partners. Not only can Realty Income handle the financial side of it, but adding a billion-dollar portfolio to Realty Income's mix isn't likely to upend its diversification. Again, few if any other net lease REITs could make that statement.
Premium for a reason
Realty Income has one of the lowest yields in the net lease space because it is a bellwether name with inherent advantages over its peers. The casino purchase puts these advantages on display and shows why the premium here is worth the price of admission. If you are looking for a net lease REIT, Realty Income and its 4.4% dividend yield are well worth a deep dive. More big purchases are likely on the horizon, with each one helping to further separate this industry leader from the pack.
<<<
>>> Data center companies CyrusOne and CoreSite acquired in deals totaling $25B
Tech Crunch
by Ron Miller
November 16, 2021
https://techcrunch.com/2021/11/16/data-center-companies-cyrusone-and-coresite-acquired-in-deals-totaling-25b/
It’s been quite a week for data center industry consolidation in the U.S. Two companies, CyrusOne and CoreSite, announced deals valued at $15 billion and $10 billion, respectively. It is unusual to see two companies in the same industry announce such large acquisitions on the same day, but that’s what happened on Monday.
Let’s start with the bigger of the two deals. KKR, a well-known private equity firm, and Global Infrastructure Partners, a company that invests in infrastructure companies like data centers, both saw fit to pay CyrusOne a 25% premium on its closing stock price of $72.57 per share back on September 27 under the terms of the deal.
The deal has already been approved by the CyrusOne board and, pending approval of regulators, is expected to close sometime in the second quarter of next year.
Synergy Research Group, which tracks cloud and data center data, reports that this is the largest data center company deal to date, easily eclipsing Blackstone’s acquisition of QTS for $10 billion earlier this year.
Meanwhile, CoreSite matched the largest deal when it announced it was being purchased by American Tower, a real estate investment trust (REIT), for $10 billion. It boasts 25 data centers, 21 cloud on-ramps and over 32,000 interconnections in eight major U.S. markets, generating $655 million in annual revenue, according to the company.
These companies may not be household names, but Synergy reports that they are the third and fourth largest U.S. data center operations, measured by colocation (the number of firms using their services) and revenue. Both companies have a strong presence in the U.S. market. John Dinsdale, principal analyst at Synergy, says continued growth at these operations is driving the need for increased investment.
“The level of data center investment required is too much for even the biggest data center operators, causing an influx of new money from external investors,” Dinsdale said in a statement. “In quick succession, ownership of four of the top six U.S. data center operators has changed hands, while the two biggest names in the industry – Equinix and Digital Realty – are increasingly turning to joint ventures to help fund their growth.”
Interestingly, investors do not seem enthralled by these deals in spite of the seemingly gaudy price tags, with both stocks down today.
<<<
DLR, STAG - >>> The 3 Smartest Real Estate Stocks to Buy Right Now
Motley Fool
By Justin Pope
Mar 25, 2022
https://www.fool.com/investing/2022/03/25/the-x-smartest-real-estate-stocks-to-buy-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Digital Realty Trust is poised to benefit from increased data center demand.
STAG Industrial is heavily involved in e-commerce.
Looking to buy real estate? It's hard to go wrong with these three real estate investment trusts (REITs).
Inflation is rampant, eating away at the buying power of your hard-earned money. You can protect yourself by investing in assets that tend to appreciate along with inflation; real estate is an excellent example.
The trick is, how do you afford to invest in real estate? Most people don't have the disposable income to buy investment properties, but there is a solution. You can purchase shares of special companies called real estate investment trusts (REITs); these publicly traded businesses acquire and lease real estate and share the profits with shareholders through dividends.
If you don't know where to start, here are three blue chip REITs that have the fundamentals to pay you well and grow your money over time.
1. Digital Realty Trust
Data centers are becoming increasingly important as more of the economy goes digital and companies move their information to the cloud. Digital Realty Trust ( DLR 0.45% ) is a REIT that acquires, develops, and operates data centers. Digital Realty operates data centers in 50 metro areas worldwide, supporting more than 178,000 cross-connects, the physical connections made within a data center.
The company's bookings, a leading indicator for rental income, hit an all-time high of $156 million in the fourth quarter of 2021. For reference, bookings rarely exceeded $50 million until 2017, which underlines the broad shift from on-premises servers to data centers in recent years. Research firm Gartner estimates that global spending on data center systems will grow more than 11% in 2022 to $226 billion, which should continue benefiting companies like Digital Realty.
Investors will get paid a solid dividend to hold shares; it currently yields 3.5%. The company has raised its dividend for the past 17 years at an average rate of more than 5% per year. Digital Realty has a lot to offer if you're looking for a reliable investment with future growth potential.
2. Stag Industrial
Retail is worth nearly $5 trillion in the United States alone, and e-commerce is steadily becoming a larger chunk of it. Statista estimates that e-commerce now accounts for 14% of total U.S. retail sales, and Stag Industrial ( STAG -1.30% ) is a REIT that could expose your portfolio to this growing segment. It acquires and leases industrial properties but focuses on e-commerce-related properties, which account for roughly 40% of its portfolio.
Management believes that e-commerce penetration could increase to 30% by the end of the decade, which would likely mean a need for more warehouses and distribution centers, much like the properties that Stag Industrial acquires.
Stag grew funds from operations (FFO), the cash profits that REITs report, 19% year over year in 2021. Industry reports from CBRE indicated that industrial space ended the year in high demand, and STAG's management issued its most optimistic guidance for same-store sales growth in the company's history heading into 2022.
In recent years, Stag has been a solid dividend stock, offering a payout with a 3.5% dividend yield at the current share price. The company has increased its dividend for the past eight years but doesn't offer much in dividend growth; it's grown less than 1% annually over the past five years. Still, if you're looking for a way to invest in e-commerce real estate, Stag is a solid option.
<<<
STAG Industrial - >>> These April REIT Buys Could Shower You With Profits
by Marc Rapport
The Motley Fool
April 3, 2022
https://finance.yahoo.com/m/b824098c-aaf2-3d7e-880a-48ff6b8cd242/these-april-reit-buys-could.html
STAG Industrial ( STAG -1.30% ) owns and operates industrial properties, one of the market's hottest sectors right now given the demand for logistics and warehouse space. STAG currently has a portfolio of 544 buildings in 40 states that is benefiting from the ability to seriously raise the rent, including by more than 16% this year.
The portfolio itself is also growing. STAG bought 74 properties for about $1.3 billion in 2021, and has an acquisition pipeline of $4.1 billion, of which $93 million has already been spent. The combination of e-commerce shipping demand and the growing imperative for "just in case" inventory storage for manufacturers has the company optimistic, for instance by projecting same-store cash growth of 3% to 4% in 2022, the most in its 11-year history.
STAG shareholders get paid monthly, including an April shower of $0.1217 a share, good for a yield of about 3.46% for investors in this industrial REIT that currently has a market cap of about $7.5 billion.
Trailing-12-month growth in funds from operations (FFO), a key measure of a REIT's performance, has increased for all three, but Postal Realty is the standout.
REITs for all reasons, all seasons
Each of these three equity REITs have solid portfolios in well-established industries with prospects for growth. After a strong 2021 -- which included notable gains in such key metrics as FFO -- they also each took share-price hits that they haven't shaken off yet, which means now could be a good opportunity to buy and hold through many seasons to come.
<<<
Equity Lifestyle - >>> This Mobile Home REIT Is Prospering From Some New Tricks
Motley Fool
By Reuben Gregg Brewer
Mar 18, 2022
https://www.fool.com/investing/2022/03/18/this-mobile-home-reit-is-prospering-from-some-new/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Equity Lifestyle is one of the largest owners of mobile-home communities.
Mobile homes are slow and steady performers, offering tenants a cost-effective housing option.
Equity Lifestyle has been investing in a related category that has been growing twice as fast.
Equity Lifestyle has found a perfect complement to its core mobile-home business.
There's nothing particularly sexy about Equity Lifestyle Properties' ( ELS 3.39% ) core business of owning mobile-homes properties. It's a slow and steady business. But that doesn't mean Equity Lifestyle is a boring real estate investment trust (REIT), considering that its dividend has been increased annually at a huge 15% clip over the past decade. Here's one of the new tricks this REIT is using to pull off this feat.
Boring is beautiful
The first thing you need to know about Equity Lifestyle is that its core portfolio is pretty attractive. On television and in the movies, mobile home parks are often portrayed as dilapidated and dangerous. Such places do exist, but they aren't what this REIT owns. Equity Lifestyle's properties are basically like little resorts.
The quality of the assets keeps them full and allows Equity Lifestyle to keep increasing rents. In 2021, for example, the REIT's mobile-home segment increased base rents by 4.7%. That may not sound like a huge amount, but being able to increase rents year in and year out starts to add up. Increasing the allure is the fact that it is hard to build new manufactured-home parks, so there's a limited supply of attractive properties.
This business line makes up just over 50% of the company's revenue. Around this business, it charges membership fees, operates a rental business, and charges tenants for utilities, which together account for nearly 19% of income. These ancillary businesses are logical add-ons to what Equity Lifestyle does and offer varying levels of growth. However, it's the last business, built on the core manufactured-home operation, that really stood out in 2021.
By sea and by land
Lumped together with the REIT's RV parks is its marina operation. Marinas are similar to everything else Equity Lifestyle does -- it tends to hit the same demographic with a product that is in limited supply. Geography plays a notable role in the supply of marinas since there are only so many suitable locations.
In 2021, the RV and marina group was able to increase base rental income by a huge 12.9%. This division now makes up about 28.5% of total rents. A material portion of that growth was driven by acquisitions, with the company adding 4,000 boat slips to the portfolio last year. To compare, it added 5,600 RV sites, so this is no small operation.
But here's the thing -- marinas are a scarce resource, and customers that use them are lifestyle-driven, just like RVs owners. Boat owners often have ample capacity to absorb rising rates. In 2021 rent hikes were around 4.3%. Slow and steady growth in this metric over time will be just as rewarding as the slow and steady mobile-home park rent growth. Now Equity Lifestyle has three material businesses that it can expand through acquisitions over time.
Although the stock has pulled back from its recent highs by around 15%, it has nearly doubled over the past five years. It's dividend yield, meanwhile, is 2.1%. That's modest for a REIT, but with a 15% annualized dividend growth rate over the past decade, it's more of an income growth play than a yield play, anyway.
Timing
To be fair, the outsized base rental income growth for the RV and marina division was largely a timing factor since the REIT was simply able to seal a number of notable acquisitions in this area that helped boost results last year. Acquisitions are always a bit lumpy, so it may not live up to that figure in 2022, but that's not the most important takeaway. What investors need to understand here is that Equity Lifestyle is building on a solid foundation and adding to it as it builds out its RV and marina business. That gives it more avenues for continued business growth ahead as it keeps raising its dividend.
<<<
>>> Medical Properties Trust, Inc. (MPW) is a self-advised real estate investment trust formed in 2003 to acquire and develop net-leased hospital facilities. From its inception in Birmingham, Alabama, the Company has grown to become one of the world's largest owners of hospitals with 431 facilities and roughly 43,000 licensed beds in nine countries and across four continents on a pro forma basis. MPT's financing model facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations.
<<<
>>> These 5 Real Estate Stocks Can Pay for Themselves
Motley Fool
By Justin Pope
Mar 25, 2022
https://www.fool.com/investing/2022/03/25/these-x-real-estate-stocks-pay-for-themselves/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
REITs are real estate companies that pay out their profits as dividends.
You can diversify your ownership of REITs to get exposure to many different industries.
Put your hard-earned cash into these REITs, and they will pay you back in steady dividends over the long term.
Owning real estate is one of humanity's most established and reliable wealth-building tools. You had to be rich back in the day to own investment property, but that's no longer the case.
You can invest in real estate investment trusts (REITs), businesses structured to own and lease real estate, and pay profits to shareholders as dividends. You can buy and hold a diversified portfolio of REITs like those listed below and let them pay back your investment little by little.
1. Innovative Industrial Properties
Cannabis is illegal at the federal level in the United States, making it hard for growers and other cannabis businesses to access much-needed financing. Innovative Industrial Properties ( IIPR -2.58% ) helps solve this by acquiring property from cannabis companies and then leasing it back to them. This unlocks the equity in the property that cannabis companies can use to invest in growing their business.
The stock's dividend yield is 3.5% based on the current share price. Cannabis is becoming an increasingly hot industry, so business has been great for Innovative Industrial. In 2021, the company's cash profits (referred to as funds from operations, or FFO) grew 78% over 2020.
2. CubeSmart
Self-storage is always in demand; people experience many life events that necessitate storage, from moving to changing jobs or simply needing a place for their stuff. CubeSmart ( CUBE 2.38% ) owns and operates 1,258 such facilities across the United States.
The company's footprint focuses on urban areas, especially East Coast states like New York and New Jersey. It's a consumer-facing brand, operating self-branded locations.
The business has been steady and successful; CubeSmart has grown its FFO per share by 7.3% annually since 2017,making it a reliable dividend stock. The company's dividend yield is currently 3.4%, and the payout has been raised an average of 6.9% annually over the past five years.
3. Farmland Partners
Land isn't a flashy asset, but there is only so much of it, and farmland is becoming increasingly scarce with housing and other developments spreading across North America. Farmland Partners ( FPI 1.96% ) owns and leases roughly 186,000 acres of farmland across 19 states to those who grow commercial crops.
The REIT has steadily acquired land, buying roughly 300 properties since its initial public offering (IPO) in 2014. Farmland Partners pays a dividend that yields 1.5% at the current share price. Its non-GAAP FFO grew 91% year over year in 2021, and the company could see long-term tailwinds as it acquires more properties while farmland becomes increasingly scarce over the years.
4. Medical Properties Trust
Healthcare is a pillar of the global economy, and Medical Properties Trust ( MPW 1.89% ) is the second-largest non-government owner of hospitals globally. It has more than 400 facilities, with properties in North America, Europe, South America, and Australia. The REIT uses net leases, which put all the costs of occupying a property -- like taxes, insurance, and maintenance -- on the tenants, making Medical Properties a more-stable business.
Investors can enjoy a sizable 5.6% dividend yield and expect the dividend to grow about $0.04 per share annually, which it's done every year since 2014. The business generated $976 million in FFO in 2021, a 29% increase over 2020. Healthcare should prove to be a resilient industry over the long term, especially as populations continue to age worldwide.
5. Duke Realty
Logistics are an often-forgotten piece of how items ship from point A to point B in this age of e-commerce. Duke Realty ( DRE 2.02% ) owns and operates roughly 160 million square feet of space across 19 major markets in the United States. The company focuses on warehouses for e-commerce, an industry that isn't going away anytime soon.
Investors will get a dividend yield of 2% at the current stock price. The company's FFO per share grew to $1.73 in 2021, a nearly 14% increase over 2020. Duke Realty recently started developing nine new projects in 2021, at an expected cost of $466 million. These continued investments should help drive business growth. E-commerce is still just 14% of total retail sales in the United States, so there should be more demand for logistics space in the future.
<<<
Nice Real Estate Watch; Chinese from Hong Kong and China etc. buying up Point Roberts, WA
an investment of $475K+ may give them a greencard and immigration
rights needed to move in full time to stay and work in US -
(vs. Canada require about $2mil. + for immigration)
They bought the golf course, Marina and developed farms -
Ex.....
Bald Eagle Golf Club
Unlisted
555 views Jul 12, 2019
https://www.youtube.com/watch?v=pNYgIhD_RdU
Farmland Partners (FPI) - >>> "Rota Fortunae," Author of July 2018 Attack on Farmland Partners, Retracts Short and Distort Article, Admits Article's Falsity, and Returns Multiples of Trading Profits He Gained from Attack
NEWS PROVIDED BY
Farmland Partners Inc.
Jun 21, 2021
https://www.prnewswire.com/news-releases/rota-fortunae-author-of-july-2018-attack-on-farmland-partners-retracts-short-and-distort-article-admits-articles-falsity-and-returns-multiples-of-trading-profits-he-gained-from-attack-301316131.html
DENVER, June 21, 2021 /PRNewswire/ -- Farmland Partners Inc. (NYSE: FPI) ("FPI" or the "Company") today announced the successful resolution of its litigation against Quinton Mathews, the previously anonymous author of an attack published on the financial website "Seeking Alpha" on July 11, 2018 as part of a "short and distort" scheme targeting FPI, management and its stockholders. As Mr. Mathews acknowledged publicly (https://seekingalpha.com/instablog/47800059-rota-fortunae/5605955-mathews-settlement-press-release), the July 2018 Article was full of false statements that drove down FPI's stock price, allowing Mr. Mathews and his clients, including the hedge fund who focused his attention on FPI, to profit when their short positions in FPI's stock gained value in the wake of the defamatory article's publication.
Through this settlement, Mr. Mathews has agreed to pay to the Company a multiple of the profits he made when his defamatory "article" artificially drove the price of FPI stock down 39% on the day of publication, enabling him, his clients, and his co-conspirators to profit from the short positions they established in advance of the article's publication. As explained below, FPI continues to pursue its claims in Texas federal court against the hedge fund with which Mr. Mathews collaborated, and the Company will continue to vigorously defend the baseless lawsuits filed immediately after the article was published that piggybacked on statements Mr. Mathews now acknowledges were false.
Mr. Mathews—who published the article under the pseudonym "Rota Fortunae" and only revealed his true name and the names of his profiting clients after a court compelled him to do so last year—has now acknowledged the defamatory statements contained in his article were false, including unfounded statements that FPI manipulated its publicly filed financial statements, misstated cash flows and ability to cover its dividend, and failed to properly disclose purported related party transactions in the company's audited financial statements. Mr. Mathews also acknowledges the falsity of the article's baseless headline claiming FPI faced a threat of insolvency.
"With a stock price now more than double the closing price on July 11, 2018, it is clear investors already recognize that the Company was the victim of a short and distort scheme," FPI CEO Paul Pittman explained. Pittman continued: "The outrageous acts of Mr. Mathews and his co-conspirators, together with the blind and misguided trust Plaintiffs' lawyers placed on Mr. Mathews' statements, have damaged innocent shareholders. We intend to continue to vigorously seek to right this wrong. Plaintiffs who filed a lawsuit against FPI based on Mr. Mathews' statements should acknowledge the falsity of the statements and rethink the ethics of continuing their cases, and move on from their frivolous pursuit of FPI stockholders' money."
The money Mr. Mathews will return to FPI includes not only the profits he made through his trading, but also the profits realized by his business partner, Keith Dilling, and his father, who placed similar bets against FPI's stock in advance of the article's publication. Critically, the Company remains free to continue to pursue its claims against the hedge fund that focused Mr. Mathews' attention on FPI. The fund—which Mr. Mathews admits paid him more than $100,000 in 2018 alone for his work on FPI and other companies—collaborated with Mr. Mathews for months prior to the release of the hit piece on FPI after working with him on research into other companies Mr. Mathews attacked via Seeking Alpha, and furthered the scheme against FPI by retweeting false and defamatory statements to amplify the impact of that attack. FPI's claims against the hedge fund are currently pending in Texas federal court.
The Company appreciates the support expressed by many other companies who have been victims of similar attacks from Mr. Mathews and others like him, and of the many investors who stuck with the Company in the face of the short and distort attack. While the Company waits for the relevant government agencies to take the necessary steps to meaningfully protect companies like FPI from these kinds of attacks, FPI will continue to protect itself and its stockholders by pursuing further restoration of its reputation and recovery of ill-gotten gains from the hedge fund that worked with Mr. Mathews for years, and any others who may have wrongfully profited from the artificial decline in FPI's share price caused by the false and misleading attack on the Company. In addition, the Company will consider all appropriate relief against those who continue to prosecute shareholder claims against the Company where such claims are based on statements by Mr. Mathews that have now been retracted and admitted to be false by their author.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns approximately 157,000 acres in 16 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014. Additional information: www.farmlandpartners.com or (720) 452-3100.
<<<
>>> Farmland Partners Inc. Reports Fourth Quarter and Fiscal Year 2021 Results
Yahoo Finance
February 22, 2022
https://finance.yahoo.com/news/farmland-partners-inc-reports-fourth-233400064.html
DENVER, Feb. 22, 2022 /PRNewswire/ -- Farmland Partners Inc. (NYSE: FPI) ("FPI" or the "Company") today reported financial results for the year ended December 31, 2021.
Selected Q4 and Full Year 2021 Highlights
During the fourth quarter of 2021, the Company:
recorded total operating revenue of $20.0 million, compared to $17.9 million for the same period in 2020, an increase of 12%;
recorded operating income of $11.3 million, compared to $9.7 million for the same period in 2020, an increase of 17%;
recorded net income of $13.2 million, compared to $6.4 million for the same period in 2020;
recorded net income excluding litigation-related items of $14.6 million1, compared to $8.3 million2 for the same period in 2020;
recorded Adjusted Funds from Operations ("AFFO") of $8.9 million, compared to $5.0 million for the same period in 2020;
recorded AFFO excluding litigation-related items of $10.3 million1, compared to $6.9 million2 for the same period in 2020;
converted its 6.00% Series B Preferred Stock into shares of common stock, eliminating the most expensive security in the capital structure, increasing cash flow after common dividends by over $6 million on an annualized basis, reducing leverage, and increasing equity market capitalization; and
completed the acquisition of Murray Wise Associates LLC for $8.1 million, increasing FPI's farm management capabilities, and adding brokerage and auction business activities.
During the year ended December 31, 2021, the Company:
recorded net income of $10.2 million, compared to $7.5 million for the same period in 2020;
recorded net income excluding litigation-related items of $18.5 million3, compared to $10.2 million4 for the same period in 2020;
recorded AFFO of $0.4 million, compared to $1.8 million for the same period in 2020;
recorded AFFO excluding litigation-related items of $8.6 million3, compared to $4.5 million4 for the same period in 2020;
completed 12 property acquisitions, for total consideration of $81.2 million;
completed 20 property dispositions, for cash consideration of $70.6 million and $2.4 million of convertible notes receivable, for total consideration of $73.0 million, and total gain on sale of $9.3 million;
grew the asset management business's assets under management to over $50 million;
reopened FPI Loan Program to enhance farmers' access to liquidity, extending $3.7 million in loans during 2021; and
reached a settlement with Quinton Mathews regarding the falsity of claims that were used to launch the "short and distort" scheme targeting FPI, its management, and its stockholders (FPI press release). We believe Quinton Mathews' public admission regarding the falsity of his claims weakens the pending class action case against us.
_____________________________________
1 For the quarter ended December 31, 2021, legal and accounting expense included $1.4 million related to litigation.
2 For the quarter ended December 31, 2020, legal and accounting expense included $1.9 million related to litigation.
3 For the year ended December 31, 2021, legal and accounting expense included $8.8 million related to litigation and revenue included $0.6 million of litigation settlement proceeds related to Rota Fortunae, resulting in a net impact of $8.2 million.
4 For the year ended December 31, 2020, legal and accounting expense included $2.7 million related to litigation.
CEO Comments
Paul A. Pittman, Chairman and CEO said: "2021 was a good year for the Company, marked by asset appreciation, rent increases, financial growth over 2020, and several initiatives to help drive future performance. As discussed previously, performance of specialty crops, such as tree nuts and citrus, improved relative to 2020. Improving farmer profitability in 2021 and land scarcity drove farmland appreciation and rate increases of over 10% for our 2021 lease renewals. Though we are early in the year, the outlook for 2022 remains positive."
Macro Comments
Farm Sector Income: According to USDA data, row crop farmers continue to experience strong profitability, especially in corn and soybeans, but also wheat, rice, and cotton, driven by improving prices and yields that are forecast to remain elevated. Net cash farm income, as reported by the USDA, is forecast to increase by 14.5% to $134 billion in 2021 and an additional 1.4% to $136 billion in 2022.
Farmland Appreciation: According to February 2022 publications by the Federal Reserve Banks of Chicago and Kansas City, year-over-year farmland appreciation was approximately 20%.
Financial and Operating Results
The table below shows financial and operating results for the years ended December 31, 2021 and 2020. The values are shown as reported and after adjusting for litigation items.
Legal and accounting expense for the years ended December 31, 2021 and 2020 included $8.8 million and $2.7 million, respectively, related to litigation. Revenue for the years ended December 31, 2021 and 2020 included $0.6 million and $— million, respectively, of litigation settlement proceeds related to Rota Fortunae resulting in a net impact of $8.2 million and $2.7 million, respectively.
See "Non-GAAP Financial Measures" for complete definitions of AFFO, Adjusted EBITDAre, and NOI and the financial tables accompanying this press release for reconciliations of net income to AFFO, Adjusted EBITDAre and NOI.
Acquisition and Disposition Activity
During the year ended December 31, 2021, the Company completed 12 property acquisitions for total consideration of $81.2 million.
During the year ended December 31, 2021, the Company completed 20 property dispositions for cash consideration of $70.6 million and $2.4 million of convertible notes receivable, for total consideration of $73.0 million, and total gain on sale of $9.3 million. The Company retained property management over 10 of the disposed assets.
Balance Sheet
During the year ended December 31, 2021, the Company sold 2,112,773 shares of common stock at a weighted average price of $12.93 for aggregate net proceeds of $27.3 million under its "at-the-market" offering programs.
As the date of this press release, the Company has 47,019,660 shares of common stock outstanding on a fully diluted basis.
The Company had total debt outstanding of $513.4 million at December 31, 2021, compared to total debt outstanding of $508.2 million at December 31, 2020.
The Company had total preferred outstanding of $120.5 million at December 31, 2021 compared to total preferred outstanding of $260.3 million at December 31, 2020.
Dividend Declarations
The Company's Board of Directors declared a quarterly cash dividend of $0.05 per share of common stock and per Class A Common OP unit. The dividends are payable on April 15, 2022, to stockholders and common unit holders of record on April 1, 2022.
Conference Call Information and Supplemental Package
The Company has scheduled a conference call on February 23, 2022, at 11:00 a.m. (Eastern Time) to discuss the financial results and provide a company update.
The call can be accessed by dialing 1-844-200-6205 (USA), 1-833-950-0062 (Canada), or 1-929-526-1599 (other locations) and using the access code 291985. The conference call will also be available via a live listen-only webcast and can be accessed through the Investor Relations section of the Company's website, www.farmlandpartners.com.
A replay of the conference call will be available beginning shortly after the end of the event until March 2, 2022, by dialing 1-866-813-9403 (USA), 1-226-828-7578 (Canada), or +44 (20) 4525-0658 (other locations) and using the access code 633871. A replay of the webcast will also be accessible on the Investor Relations section of the Company's website for a limited time following the event.
A supplemental package can be accessed through the Investor Relations section of the Company's website.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns and/or manages approximately 186,000 acres in 19 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, North Carolina, Nebraska, South Carolina, South Dakota, and Virginia. We have approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014. Additional information: www.farmlandpartners.com or (720) 452-3100.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the federal securities laws, including, without limitation, statements with respect to our outlook and the outlook for the farm economy generally, proposed and pending acquisitions and dispositions, the benefits of the conversion of the Company's Series B Preferred Stock to common stock, financing activities, crop yields and prices and anticipated rental rates. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" or similar expressions or their negatives, as well as statements in future tense. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: general volatility of the capital markets and the market price of the Company's common stock, changes in the Company's business strategy, availability, terms and deployment of capital, the Company's ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, availability of qualified personnel, changes in the Company's industry, interest rates or the general economy, adverse developments related to crop yields or crop prices, the degree and nature of the Company's competition, the timing, price or amount of repurchases, if any, under the Company's share repurchase program, the ability to consummate acquisitions or dispositions under contract and the other factors described in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and the Company's other filings with the Securities and Exchange Commission. Any forward-looking information presented herein is made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
Common stock, $0.01 par value, 500,000,000 shares authorized; 45,474,145 shares
Non-GAAP Financial Measures
The Company considers the following non-GAAP measures as useful to investors as key supplemental measures of its performance: FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of the Company's operating performance. FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre, as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company.
FFO
The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation, depletion and amortization (excluding amortization of deferred financing costs), and after adjustments for unconsolidated partnerships and joint ventures. Management presents FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the Company's operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from sales of depreciable operating properties, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. The Company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the Company's operating performance with that of other REITs. However, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company's FFO may not be comparable to such other REITs' FFO.
AFFO
The Company calculates AFFO by adjusting FFO to exclude the income and expenses that the Company believes are not reflective of the sustainability of the Company's ongoing operating performance, including, but not limited to, real estate related acquisition and due diligence costs, stock-based compensation, deferred impact of interest rate swap terminations, and distributions on the Company's Series A preferred units. For the avoidance of doubt, $5.7 million non-cash redemption of Series B Participating Preferred Stock is not included in AFFO.
Changes in GAAP accounting and reporting rules that were put in effect after the establishment of NAREIT's definition of FFO in 1999 result in the inclusion of a number of items in FFO that do not correlate with the sustainability of the Company's operating performance. Therefore, in addition to FFO, the Company presents AFFO and AFFO per share, fully diluted, both of which are non-GAAP measures. Management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company's operational performance than FFO. AFFO is not intended to represent cash flow or liquidity for the period and is only intended to provide an additional measure of the Company's operating performance. Even AFFO, however, does not properly capture the timing of cash receipts, especially in connection with full-year rent payments under lease agreements entered into in connection with newly acquired farms. Management considers AFFO per share, fully diluted to be a supplemental metric to GAAP earnings per share. AFFO per share, fully diluted provides additional insight into how the Company's operating performance could be allocated to potential shares outstanding at a specific point in time. Management believes that AFFO is a widely recognized measure of the operations of REITs and presenting AFFO will enable investors to assess the Company's performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and AFFO per share, fully diluted and, accordingly, the Company's AFFO and AFFO per share, fully diluted may not always be comparable to AFFO and AFFO per share amounts calculated by other REITs. AFFO and AFFO per share, fully diluted should not be considered as an alternative to net income (loss) or earnings per share (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to net income (loss) earnings per share (determined in accordance with GAAP) as a measure of the Company's liquidity, nor are they indicative of funds available to fund the Company's cash needs, including its ability to make distributions.
EBITDAre and Adjusted EBITDAre
The Company calculates Earnings Before Interest Taxes Depreciation and Amortization for real estate ("EBITDAre") in accordance with the standards established by NAREIT in its September 2017 White Paper. NAREIT defines EBITDAre as net income (calculated in accordance with GAAP) excluding interest expense, income tax, depreciation and amortization, gains or losses on disposition of depreciated property (including gains or losses on change of control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity's pro rata share of EBITDAre of unconsolidated affiliates. EBITDAre is a key financial measure used to evaluate the Company's operating performance but should not be construed as an alternative to operating income, cash flows from operating activities or net income, in each case as determined in accordance with GAAP. The Company believes that EBITDAre is a useful performance measure commonly reported and will be widely used by analysts and investors in the Company's industry. However, while EBITDAre is a performance measure widely used across the Company's industry, the Company does not believe that it correctly captures the Company's business operating performance because it includes non-cash expenses and recurring adjustments that are necessary to better understand the Company's business operating performance. Therefore, in addition to EBITDAre, management uses Adjusted EBITDAre, a non-GAAP measure.
The Company calculates Adjusted EBITDAre by adjusting EBITDAre for certain items such as stock-based compensation and real estate related acquisition and due diligence costs that the Company considers necessary to understand its operating performance. The Company believes that Adjusted EBITDAre provides useful supplemental information to investors regarding the Company's ongoing operating performance that, when considered with net income and EBITDAre, is beneficial to an investor's understanding of the Company's operating performance. However, EBITDAre and Adjusted EBITDAre have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP.
In prior periods, the Company has presented EBITDA and Adjusted EBITDA. In accordance with NAREIT's recommendation, beginning with the Company's reported results for the three months ended March 31, 2018, the Company is reporting EBITDAre and Adjusted EBITDAre in place of EBITDA and Adjusted EBITDA.
Net Operating Income (NOI)
The Company calculates net operating income (NOI) as total operating revenues (rental income, tenant reimbursements, crop sales and other revenue) less property operating expenses (direct property expenses and real estate taxes). Since net operating income excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other income and losses and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and leasing farmland real estate, providing a perspective not immediately apparent from net income. However, net operating income should not be viewed as an alternative measure of the Company's financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other income and losses.
<<<
>>> BDC and REIT manager The Gladstone Companies files IPO
MarketWatch
Feb. 22, 2022
By Steve Gelsi
https://www.marketwatch.com/story/bdc-and-reit-manager-the-gladstone-companies-files-ipo-2022-02-22?siteid=yhoof2
The Gladstone Companies on Monday filed its initial public offering to trade on the Nasdaq under the symbol GC, with underwriter EF Hutton, a division of Benchmark Investments LLC. The McLean, Va.-based company, headed by CEO David Gladstone, manages four publicly traded funds including two investment trusts, Gladstone Commercial Corp. GOOD, and Gladstone Land Corp. LAND, as well as specialty finance company Gladstone Capital Corp. GLAD, and Gladstone Investment Corp, a business development company. Gladstone Securities LLC is an affiliated broker-dealer of The Gladstone Companies. The Gladstone Companies reported total assets under management of $4 billion as of Dec. 31. Its compound annual growth rate for its AUM is 18% over the past 20 years.
<<<
Farmland Partners - >>> Spring Cleaning Is Almost Here: Time to Get These Stocks Out of Your Portfolio
If you own this trio of REITs, it might be time to find better alternatives. Here are some options you'll want to consider.
Motley Fool
by Reuben Gregg Brewer
Mar 5, 2022
https://www.fool.com/investing/2022/03/05/spring-cleaning-is-almost-here-time-to-get-these-s/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Global Net Lease cut its dividend in 2020 and still has a high payout ratio.
Farmland Partners is in an attractive niche, but its business is getting increasingly complicated.
Whitestone REIT is small and lacks diversification.
Real estate investment trusts (REITs) are meant to pass income on to investors and, thus, should really be conservatively managed. Only that's not exactly what you'll get from Global Net Lease (NYSE:GNL), Farmland Partners (NYSE:FPI), and Whitestone REIT (NYSE:WSR). If you own this trio of REITs, here's why you might want to dump them, as well as three alternatives that are likely to be more reliable over time.
1. Going global the safe way
Diversification is good for your portfolio, and it's good for a REIT's portfolio, too. So, on the surface, you'd think that Global Net Lease would be a slam-dunk investment option, particularly given its hefty 11.3% dividend yield. Only that outsized yield reflects the risks of this aggressively managed REIT.
On the positive side, Global Net Lease spreads its portfolio across the industrial (54% of rents), office (42%), and retail sectors (4%). Roughly 40% of rents, meanwhile, are derived from outside the U.S. But the externally managed REIT ended up cutting its dividend in 2020 and still has a fairly high adjusted funds from operations (FFO) payout ratio of 90%. Adjusted FFO, meanwhile, fell slightly between 2020 and 2021, which is the exact opposite of what you would expect, given that the pandemic was such a headwind in 2020.
Investors looking for more consistency would probably be better off with larger, more diversified peer W.P. Carey (NYSE:WPC), even though its yield is only 5.4%. Unlike Global Net Lease, W.P. Carey has increased its dividend every year since its initial public offering in 1998, including each quarter in 2020.
2. Farms the simple way
Next up on the house cleaning list is Farmland Partners, which owns exactly what its name implies -- farms. However, there are a couple of problems here.
First, the company is still dealing with the fallout from a short-seller report that caused it to cut its dividend in 2019. The second, bigger issue is that the REIT recently agreed to buy a company that will expand its business to include things like farmland brokerage and farm management. The goal is for the REIT to become a one-stop shop for anyone looking for farm services, which is great. But it is no longer a simple REIT story.
If you want to own farmland and simply collect rent checks, you will have to look elsewhere. The best option would likely be peer Gladstone Land (NASDAQ:LAND), which is focused on owning farms that grow things like fruits, vegetables, and nuts.
That said, Gladstone Land's stock has shot up of late, and the yield is near its historical lows at 1.8% or so. That's around what you'd get from Farmland Partners, without the added complications of the services business.
If you want to maintain the farmland exposure, this shift could end up being a net benefit. But, given the big run, you might want to consider moving out of Farmland Partners and just putting Gladstone Land on your wish list for the next broad sell-off.
3. Better options are available
Whitestone REIT owns strip malls. It is a tiny player in the industry, with a market cap of just over $600 million. While its Sun Belt focus might be of interest to some, it really only has operations in Arizona and Texas, making it highly concentrated. And on top of that, Whitestone REIT ended up cutting its dividend in 2020.
While the actual assets it owns might be just fine, there are negatives here that you can easily avoid by owning one of this REIT's larger peers. And with a roughly 3.9% yield, you aren't really getting paid much to stick around here anyway.
One alternative includes the Dividend King, Federal Realty Investment Trust (NYSE:FRT), which also has a fairly small portfolio but is filled with great assets in top-tier markets around the country. Notably, this sharpshooter has a longer dividend streak than any other public REIT. It yields 3.7% or so.
Kimco (NYSE:KIM) and Regency Centers (NASDAQ:REG) are two other options, sporting 3.3% and 3.8% yields, respectively. Both have large regionally diversified portfolios, including assets in the Sun Belt, for those who believe bigger portfolios are better. Any one of this trio is likely to be a stronger option for conservative income investors over the long term.
Go with the best
I could argue that Global Net Lease, Farmland Partners, and Whitestone REIT are just bad REITs to own, but the truth is that would really depend on the investor. However, for most income investors, there is a strong case to be made that there are better alternatives. And as you get ready to spring-clean your portfolio, you might want to take a look at some of those other options if you own this trio. Sometimes, trading up makes total sense.
<<<
>>> Key Indicator Hints America Is Headed For Its Worst Real Estate Crash In History
The Federalist
BY: JUSTIN HASKINS
FEBRUARY 16, 2022
https://thefederalist.com/2022/02/16/key-indicator-hints-america-is-headed-for-its-worst-real-estate-crash-in-history/
A shockingly large price bubble appears to have formed in the real estate market.
Although it’s impossible to predict economic crashes with certainty, a key economic indicator suggests the U.S. housing market is on the verge of an unprecedented crash, one that could end up being the biggest in America’s history.
Following the 2008 stock and real estate market crashes, the Federal Reserve, Democratic-led Congress, and the presidential administrations of George W. Bush and Barack Obama began an unprecedented effort to pump new dollars into the financial system — and, to a lesser extent, the economy at large.
The strategy behind the flood of quantitative easing, government takeovers, stimulus checks, and government welfare programs that followed was that the Fed, working in conjunction with Congress and the White House, needed to prop up the economy to keep it from sliding completely off the cliff.
One of the primary tools the Fed used to accomplish its goals was to keep interest rates at near-zero for years on end. From 1980 to 2000, the Fed’s federal funds rate — the primary driver of interest rates economywide — rarely dropped below 4 percent, and it was common for interest rates to be 5 percent or higher.
However, from 2009 through 2016, interest rates were consistently much lower than 1 percent. Beginning in 2017, the first year of the Donald Trump presidency, the Fed began to more aggressively raise rates, but it only briefly topped 2 percent in 2018 and 2019 before the Fed once again slashed rates to near-zero as part of its plan to address the effects of the Covid-19 lockdowns.
When interest rates are kept low, it’s easier for governments to spend more money than they take in, because debt is cheap. Additionally, banks and other financial institutions are more likely to lend out money for high-priced items.
The real estate market is especially sensitive to rate changes, because a home is usually the biggest purchase a person will make in his or her lifetime, and the vast majority of purchasers rely on large mortgages to complete the purchase.
When interest rates are kept extremely low, people can afford to take on more debt, because the monthly payments cost less. As a result, sellers increase their prices.
This is one of the reasons the real estate market crashed so hard in 2008. Following the September 11, 2001, terrorist attacks, the Fed kept interest rates low, encouraging people to take on higher-than-usual levels of debt, especially in the real estate market.
Rather than learn its lesson from the 2008 crash, the Fed doubled down on this failed strategy, and then tripled down during the Covid-19 response. Congress and the White House were all too willing to cheer the Fed on, since lower interest rates have helped them expand government programs without begging foreign governments to finance U.S. debt.
As a result of these policies, a shockingly large price bubble appears to have formed in the real estate market. The average sales price of a home in the fourth quarter of 2021 was $477,900, compared to $403,900 in the fourth quarter of 2020 and $384,600 in the fourth quarter of 2019. That’s a $93,300 increase in just two years, by far the biggest increase ever recorded in just 24 months.
Further, the 12-month home sales price increases for the second, third, and fourth quarters of 2021 were all above 17 percent, the highest hike recorded over a three-quarter period since at least 1963, the earliest date in the Fed’s data made available online.
Put simply, Americans have literally never seen housing prices skyrocket like they are now for this long of a period. And every time they have approached the numbers we are seeing today in the past — in the 1970s, late-1980s, and early to mid-2000s — there was a massive real estate or stock market crash that soon followed (or both). There appear to be no exceptions, other than a few rare cases where housing prices increased quickly immediately after a crash had occurred.
Determining the size of a market correction is extremely difficult, but if the 2008 crash is an indicator of what’s in store for us today, then if the current real estate bubble pops soon, as all bubbles inevitably do, it could end up being the largest real estate crash in history.
The bubble that developed from 2002 to 2007 peaked at around a 47 percent price increase, before plummeting by 20 percent from 2007 to the first quarter of 2009. If we see a similar pattern emerge for the bubble that has been developing since roughly 2012, then we could see housing prices drop by 30 to 40 percent over a two-year period.
Whatever the final numbers end up being, the evidence is clear: based on data reported over the past six decades, America appears to be on the verge of an epic real estate crash.
As painful as such a correction would be, it is likely necessary. The price increases we’ve been seeing in recent years are primarily the result of inflation and reckless monetary policy, not real economic growth.
However, there is a chance that housing prices will not drop, or only drop minimally. If the Fed decides to continue to keep interest rates low, despite the ongoing inflation crisis, it might prevent a real estate crash the size and scale of the one discussed above. It will come at a cost, though — more inflation, even bigger market distortions, and perhaps the collapse of the dollar.
Regardless of what the Fed does in the short term, it’s clear that America’s disastrous monetary-policy chickens are coming home to roost. Prepare accordingly.
<<<
Public Storage, Digital Realty Trust - >>> 2 Market Crash-Ready REIT Stocks To Buy in 2022
Worried about a market crash? See why these two REITs would bounce back quickly.
Motley Fool
by Liz Brumer-Smith
Jan 12, 2022
https://www.fool.com/investing/2022/01/12/2-market-crash-ready-reit-stocks-to-buy-in-2022/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Certain companies rebound quickly during market crashes, thanks to their business models.
Self-storage demand increases during economic volatility, making Public Storage a great buy.
Digital Realty Trust gives investors exposure to the growing data storage space.
Being able to withstand a market crash is no easy feat. Volatile economic conditions can sway consumer confidence and push the values of even the best companies low. But those moments are often the best opportunities to snag up shares in high-quality stocks that will bounce back quickly because of their business model.
The most recent stock market crash in March 2020 was chock full of market crash-ready stocks. Amazon, for example, rebounded aggressively as e-commerce demand went through the roof as a result of the pandemic. Food companies and grocery stores also did exceptionally well, rallying in under a month because the nature of their businesses helped them soar despite tough times. Today's market crash-ready REIT stocks that stand out are Public Storage (NYSE:PSA) and Digital Realty Trust (NYSE:DLR). Here's a closer look at what makes these REITs attractive.
Public Storage (PSA)
Public Storage is the largest self-storage REIT globally, owning 2,700 properties across 39 U.S. states and interest in 247 facilities in Western Europe. Overdevelopment in the self-storage sector caused pre-pandemic returns for self-storage to stall. But the pandemic helped fuel new demand for self-storage as people relocated and downsized. Since 2019, Public Storage has grown its portfolio by 22%, deploying a record $7.1 billion into new acquisitions and developments. At the end of 2021, Public Storage completed the $1.5 billion acquisition of All Storage, which added 56 properties to its portfolio.
But its rapid expansion isn't necessarily what makes it market crash-ready. It's the company's business model. Self-storage thrives during economic uncertainty, meaning a market crash likely would drive business, not hurt it. Public Storage is also in a strong financial position having a low debt-to-EBITDA ratio of just 3.9x, which is far better than its competitors in the self-storage REIT space. Over the past ten years, including the Great Recession and the most recent market correction in March 2020, Public Storage has achieved a 14% annualized total return for investors, which is just 1% shy of the S&P 500 during this same period. Some may find it difficult to appreciate this, but it needs to be emphasized that the major part of the last decade saw a booming stock market growth, fueled by a low-interest rate environment. That, however, may not hold as interest rates move north in the years to come. Given its dominance, financial stability, and growth prospects within this sector, there's a strong chance Public Storage would outperform if the market turned.
Digital Realty Trust (DLR)
Digital Realty Trust specializes in the development and management of over 280 data storage facilities across 25 countries. Data center facilities play an increasingly important role in our digital society, storing, organizing, and protecting data for nearly every sector of our economy, including social media platforms, fintech companies, manufacturers, universities, and corporations, among many others.
Data storage demand, like self-storage, saw a spike after the onset of the pandemic. As people stayed and worked from home, data consumption increased. Given today's continued volatility as omicron and other coronavirus variants make their appearance, data consumption demand would likely increase in a market crash. Not to mention, alternative drives like e-commerce, autonomous vehicles, and other AI services are also driving demand for data storage.
The company isn't in as strong of a financial position as Public Storage, with a debt-to-EBITDA ratio of 5.6x, but its growth prospects are strong. Digital Realty Trust just announced the acquisition of Teraco, a data storage operator in South Africa, which will help increase the company's presence in Africa while adding seven existing facilities and three expansion opportunities to its portfolio.
Both of these REITs operate in strong sectors within the real estate industry that will surely benefit from an economic recession or market crash. Given their high-quality portfolios, they are great buys for patient investors before or after a market crash.
<<<
>>> Gladstone Land Announces Increase in Monthly Cash Distributions for January, February and March 2022 and Fourth Quarter Ended December 31, 2021, Earnings Release and Conference Call Dates
Accesswire
January 11, 2022
https://finance.yahoo.com/news/gladstone-land-announces-increase-monthly-210500762.html
MCLEAN, VA / ACCESSWIRE / January 11, 2022 /Gladstone Land Corporation (Nasdaq:LAND) ("Gladstone Land" or the "Company") announced today that its board of directors declared the following cash distributions for each of January, February and March 2022.
Monthly Cash Distributions:
Common Stock: $0.0453 per share of common stock for each of January, February and March 2022, payable per the table below:
Summary of Common Stock Cash Distributions
Record Date
Payment Date
Amount
January 21
January 31
$ 0.0453
February 18
February 28
0.0453
March 23
March 31
0.0453
Total for the Quarter:
$ 0.1359
The Company has paid 107 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013 and has increased its common stock distributions 25 times over the prior 28 quarters. The Company offers a dividend reinvestment plan (the "DRIP") to its common stockholders. For more information regarding the DRIP, please visit www.GladstoneLand.com.
Series B Preferred Stock(Nasdaq LANDO): $0.125 per share of Series B Preferred Stock for each of January, February and March 2022, payable per the table below:
Summary of Series B Preferred Stock Cash Distributions
Record Date
Payment Date
Amount
January 21
January 31
$ 0.125
February 18
February 28
0.125
March 23
March 31
0.125
Total for the Quarter:
$ 0.375
The Company has not skipped, reduced, or deferred a monthly Series B Preferred Stock distribution to date.
Series C Preferred Stock(Unlisted): $0.125 per share of Series C Preferred Stock for each of January, February and March 2022, payable per the table below:
Summary of Series C Preferred Stock Cash Distributions
Record Date
Payment Date
Amount
January 26
February 4
$ 0.125
February 24
March 4
0.125
March 25
April 4
0.125
Total for the Quarter:
$ 0.375
The Company has not skipped, reduced, or deferred a monthly Series C Preferred Stock distribution to date.
Series D Preferred Stock (Nasdaq:LANDM): $0.104167 per share of Series D Preferred Stock for each of January, February and March 2022, payable per the table below:
Summary of Series D Preferred Stock Cash Distributions
Record Date
Payment Date
Amount
January 21
January 31
$ 0.104167
February 18
February 28
0.104167
March 23
March 31
0.104167
Total for the Quarter:
$ 0.312501
The Company has not skipped, reduced, or deferred a monthly Series D Preferred Stock distribution to date.
Earnings Announcement:
The Company also announced today that it plans to report earnings for its fourth quarter ended December 31, 2021, after the stock market closes on Tuesday, February 22, 2022. The Company will hold a conference call on Wednesday, February 23, 2022, at 8:30 a.m. EST to discuss its earnings results. Please call (877) 407-9046 to join the conference call. An operator will monitor the call and set a queue for questions.
A conference call replay will be available after the call and will be accessible through March 2, 2022. To hear the replay, please dial (877) 660-6853 and use playback conference number 13725346.
The live audio broadcast of the Company's conference call will also be available online at www.GladstoneLand.com.
About Gladstone Land:
Gladstone Land is a publicly-traded real estate investment trust that invests in farmland located in major agricultural markets in the U.S., which it leases to farmers. The Company currently owns 164 farms, comprised of approximately 113,000 acres in 15 different states and 45,000 acre-feet of banked water in California, valued at approximately $1.5 billion, in the aggregate. Additional information can be found at www.GladstoneLand.com.
For stockholder information on Gladstone Land, call (703) 287-5893. For Investor Relations inquiries related to any of the monthly dividend-paying Gladstone funds, please visit www.GladstoneCompanies.com.
For further information: Gladstone Land Corporation, +1-703-287-5893
SOURCE: Gladstone Land Corporation
<<<
>>> Wall Street Is Using Tech Firms Like Zillow to Eat Up Starter Homes
A business that’s touted as a convenience for home sellers has created a secret pipeline for big investors to buy properties, often in communities of color.
Bloomberg
By Noah Buhayar, Patrick Clark, and Jordyn Holman
January 7, 2022
https://www.bloomberg.com/news/features/2022-01-07/buying-starter-homes-gets-harder-as-wall-street-uses-zillow-to-buy-thousands?srnd=premium
Zillow Group Inc. spent last year aggressively expanding a home-flipping operation designed to make the $2 trillion U.S. real estate market better for consumers, until a bad bet on home prices pushed the company to pull the plug.
As it shuts down the operation, Zillow’s efforts to sell off its inventory of thousands of homes has highlighted a little-noticed truth about the business, called iBuying. The tech industry’s attempts to simplify the process of selling a house depend on flipping properties to some of the biggest names in global finance.
A Bloomberg News analysis of more than 100,000 property records shows that Zillow and the two other biggest iBuyers, Opendoor Technologies Inc. and Offerpad Solutions Inc., are selling thousands of homes to landlords backed by KKR & Co., Cerberus Capital Management, Blackstone Inc., and other large institutions. In many cases, those properties are never even listed, further squeezing average buyers out of competitive housing markets.
Two out of 10 homes flipped by the iBuyers last year wound up with investors and other entities, and the rate is double that in some Sun Belt metro areas, where the companies are most active. What’s more, in some of those markets, the flips are happening at a higher rate in communities of color.
The transactions raise questions about the role the iBuyers are playing in a housing market starved of affordable properties, both for rent and purchase. A diverse range of U.S. political voices, from the Biden Administration to the conservative television host Tucker Carlson, have blamed institutional landlords for crowding out regular families. Populist angst over the role investors play in housing has also expanded from Shenzhen to Seoul and Stockholm to Berlin.
Wall Street's Hidden Source of Homes
Tech-powered home flippers called iBuyers are selling to big rental landlords
“It just doesn’t feel right,” said Mike DelPrete, a scholar-in-residence at the University of Colorado Boulder, who studies iBuyers. “These companies go around saying, ‘We’re going to help mom and pop and inject liquidity into the market.’ They don’t say, ‘We’re going to suck up houses from the ordinary market and sell them to Wall Street.’”
Tech Spin
Home flipping is an old business, and investors who buy houses cheaply and fix them up can play an important role in the market by improving outdated properties. The iBuyers brought a tech-powered spin to the idea. Instead of hunting for deeply discounted homes, they use algorithms to buy near the market price, trying to capture a small profit on a large number of transactions.
The business model has resonated with customers during the pandemic, allowing property owners to sell without hosting an open house or waiting for the buyer’s mortgage to get approved. The three largest iBuyers acquired more than 27,000 homes in the third quarter of 2021, nearly twice as many as they bought in the previous three-month period. At the end of September, the companies owned more than $10 billion worth of real estate.
Acquiring homes is only one part of the iBuyers’ business; they also need to offload what they purchase. Big landlords transact quickly and buy repeatedly, helping the tech companies save money and gain scale. They’re also flush with cash, having raised more than $30 billion to acquire and develop rental houses since the beginning of the pandemic. And they tend to focus on the same moderately priced, Sun Belt suburbs where iBuyers are most active.
As Zillow neared its Nov. 2 decision to get out of the business in the face of mounting losses, it marketed thousands of homes to institutional landlords, starting a process that has helped the company wind down the business.
Zillow spokesman Viet Shelton said that the company's remaining inventory represents a tiny fraction of U.S. homes sold annually, and that the company intends to sell houses to a variety of buyers, including families, small investors, institutional landlords and nonprofits. “Leveraging these varied sales channels is common among all iBuyer companies in the space, with the noted exception that Zillow is selling these homes as we exit iBuying, while other iBuyers will continue these sales practices in perpetuity,” he said.
A representative for Offerpad said most homes it sells are purchased by individuals, and that the geography of investor purchases reflects how property funds approach the market. “We have a diverse mix of customers that benefit from the ease and simplicity of our services,” the representative said. “Where investors choose to do business is a function of their strategy.”
Opendoor declined to comment.
While selling to property funds has clear benefits for iBuyers and their customers, it's yet another way some parts of the country are being deprived of affordably priced houses.
Investors accounted for more than 18% of all U.S. home sales in the third quarter, according to research from Redfin Corp., the highest share since at least 2000. Atlanta was one of the most popular markets, with investors buying 32% of homes sold during that period.
Bloomberg analyzed flips in census tracts where the median home value was between the 40th and 60th percentile — neighborhoods where properties should be affordable for regular families. In these parts of greater Atlanta, iBuyers were 60% more likely to flip homes to investors and other entities in predominantly non-White areas, compared with those where White people are in the majority. In metro Phoenix, where iBuyers flipped more than 4,500 homes last year, the rate was 41% higher. In greater Charlotte, the iBuyers were three times as likely to do the flips in non-White areas.
McDonough, Georgia, is a hot spot within a hot spot. Roughly 30 miles southeast of downtown Atlanta, it’s a city of about 29,000 where two-thirds of residents are Black. The population has surged over the last two decades, amid a suburban building boom. Much of the town sits in one of the ZIP codes where iBuyers are most active nationally, selling more than 100 homes last year, according to Bloomberg's analysis of the property records, which were compiled by Attom Data Solutions. About 70% of those houses went to investors, many without ever being listed.
Back in 2001, Nicole Prince was able to buy a modest, three-bedroom home there while earning $12-an-hour. She lived in the house for a few years, moved to something bigger nearby and kept it as a rental. Last year, Prince, who’s Black, decided to sell and turned to the iBuyers. Offerpad agreed to pay $191,000 — far more than she thought she’d get: “I was like, ‘What?’ You couldn’t say no.”
The sale closed in mid-September. About three weeks later, the house was scooped up by Tricon Residential, a landlord that buys and manages single-family rental homes, for $5,000 more than what Offerpad paid, according to data from Attom. It still nags her that it didn’t go to a young person or family of color — somebody that was starting out like she was two decades ago.
“I feel like I didn’t pay it forward,” she said.
Rental Shortage
While there’s growing concern about investors turning more and more homes into rentals, complaints about the rise of Wall Street landlords often skip over the complexity around the issue. For one thing, the vast majority of the country's rental houses are owned by small investors. For another, the U.S. is also facing a shortage of rental housing that has driven up prices and stressed family finances.
When a landlord buys a home from an iBuyer, they’re often adding a unit of rental housing to a market that desperately needs it, said David Howard, the executive director of the National Rental Home Council, a trade group. At the same time, the institutional players are offering homes in desirable neighborhoods to households without the cash for a downpayment, he said.
“Race and ethnicity never factor into decisions about where or when to buy or sell a home,” Howard said in an email. “The overriding motivation is having a presence in those neighborhoods and communities where the demand for quality and affordably priced rental housing is strongest.”
KKR declined to comment. A representative for FirstKey Homes, a Cerberus portfolio company, said that it's purchased just 1% of its properties through iBuyers. Kathleen McCarthy, global co-head of Blackstone Real Estate, said that “not one of our portfolio companies have purchased a single off-market home from an iBuyer.” Blackstone has a small stake in Tricon.
The confluence of iBuyers and Wall Street-backed landlords is on display in the Creekwood Station neighborhood of McDonough, where Prince sold her home to Offerpad. Aimee Turner moved to the subdivision two decades ago, when the homes were new and most residents owned their properties. These days, she said, roughly three-quarters of the houses are rentals.
“I probably couldn’t even tell you five homeowners on this street,” she said on a recent afternoon while out walking her dog.
An entity affiliated with Tricon bought the home next door to Turner in February, paying Offerpad $140,000, according to Attom data. Tricon also paid $140,000 to buy a house two streets over from Opendoor. And Zillow flipped another home in the neighborhood in July to Progress Residential, a company run by New York-based investment firm Pretium Partners.
A representative for Tricon said most of the properties the company acquires from iBuyers are listed on the open market. Kevin Baldridge, the company's chief operating officer, said in a statement that single-family rentals let families live “in neighborhoods they may not otherwise be able to afford to buy in.” The company receives “up to 10,000 leasing inquiries each week across the country for an average of just 200 to 300 available homes,” he said. Pretium declined to comment.
The increasing number of rentals in the neighborhood was a good thing for Tyrone and Sherece Sapp, who were scrambling to find a place to live with their two kids after Tyrone accepted a job transfer to Atlanta from New York.
After several other rental options didn’t pan out, Tricon accepted their application to lease the house next door to Turner’s. The $1,500-a-month rent was higher than what some smaller landlords, like Prince, were charging. But for a couple that had been living with two kids in a two-bedroom apartment in New York, the cost for a whole house didn’t seem that bad.
“In New York, sometimes that’s a basement apartment,” Sherece said.
The challenge comes when renters look to purchase a house, so that they can start building wealth.
Institutional landlords already have all kinds of advantages over average buyers, said Desiree Fields, an assistant professor of geography and global metropolitan studies at the University of California, Berkeley, who studies single-family rental companies. By giving them access to off-market listings, the iBuyers are only strengthening their hand, she said.
“It's troubling,” Fields said. “It's just going to make it that much harder for people who might otherwise be in a position to acquire a starter home.”
Methodology
Deed records were pulled on Dec. 23 from a national database of iBuyer transactions compiled by Attom Data Solutions. Bloomberg News then matched records where the seller’s name corresponded with an entity used by Offerpad, Opendoor or Zillow. Buyers whose names didn't appear to be a person or a family or living trust were categorized as an investor or other entity.
Bloomberg used location data provided by Attom to determine each home’s census tract, which was then used to pull demographic and housing characteristics of the surrounding area from the 2019 American Community Survey (five-year estimates). The rate of flips was calculated by dividing the number of sales to investors in majority White and non-White tracts by the number of single-family homes in those areas.
— With assistance by Brett Pulley, and Jeremy Cf Lin
<<<
>>> Best REIT ETFs for Q1 2022
NURE, REM, and MORT are the best REIT ETFs for Q1 2022
Investopedia
By NATHAN REIFF
August 31, 2021
https://www.investopedia.com/articles/etfs/top-real-estate-etfs/?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral
Best Stock ETFs
Real estate exchange-traded funds (ETFs) hold baskets of securities in the real estate sector, providing investors with a less expensive way to invest in the industry compared to other options. These funds often focus specifically on real estate investment trusts (REITs), which are securitized portfolios of real estate properties. REITs offer investors income potential as well as the liquidity of traditional stocks. Some of the major names in the REIT space include Vornado Realty Trust (VNO) and Welltower Inc. (WELL). Investing in these and other REITs allows investors to receive dividend distributions. Though the financial returns may be lower than owning an entire building and pocketing all the rental income, there is less risk.
KEY TAKEAWAYS
REITs slightly outperformed the broader market over the past year.
The ETFs with the best one-year trailing total return are NURE, REM, and MORT.
The top holding of the first ETF is Sun Communities Inc., and the top holding of the second and third ETFs is Annaly Capital Management Inc.
The REIT ETF universe is comprised of about 33 ETFs that trade in the U.S., excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). REITs, as measured by the FTSE Nareit All Equity REITs Index, have slightly outperformed the broader market with a total return of 33.5% over the past 12 months compared to the S&P 500's total return of 31.4%, as of Aug. 27, 2021.12 The best performing REIT ETF, based on performance over the past year, is the Nuveen Short-Term REIT ETF (NURE). We examine the three best REIT ETFs below. All numbers below are as of Aug. 27, 2021.3
Nuveen Short-Term REIT ETF (NURE)
Performance Over One-Year: 58.3%
Expense Ratio: 0.35%
Annual Dividend Yield: 2.25%
Three-Month Average Daily Volume: 40,418
Assets Under Management: $73.8 million
Inception Date: Dec. 19, 2016
Issuer: TIAA
NURE targets the Dow Jones U.S. Select Short-Term REIT Index. The index is comprised of U.S. exchanged-traded REITs that focus on apartment buildings, hotels, self-storage facilities, and other properties that typically have shorter lease terms compared with other sectors. Just under half of the fund's holdings are apartment REITs, followed by self-storage REITs and hotel REITs.4 The top holdings of NURE include Sun Communities Inc. (SUI), a REIT that acquires, operates, and develops manufactured home and RV communities; Mid-America Apartment Communities Inc. (MAA), an apartment REIT that owns, develops, and acquires properties in the U.S. Southeast, Midwest, and Texas; and Camden Property Trust (CPT), an apartment REIT.5
iShares Mortgage Real Estate ETF (REM)
Performance Over One-Year: 48.3%
Expense Ratio: 0.48%
Annual Dividend Yield: 6.09%
Three-Month Average Daily Volume: 563,551
Assets Under Management: $1.5 billion
Inception Date: May 1, 2007
Issuer: BlackRock Financial Management
REM is a multi-cap fund that targets the FTSE Nareit All Mortgage Capped Index. The index aims to track the performance of U.S. residential and commercial real estate mortgages. As such, REM does not focus exclusively on REITs but also includes other domestic real estate stocks and financial services names.6 REM's expense ratio is higher than those of many of its peers. The top holdings of REM include Annaly Capital Management Inc. (NLY), AGNC Investment Corp. (AGNC), and Starwood Property Trust Inc. (STWD), all of which are mortgage REITs.7
VanEck Vectors Mortgage REIT Income ETF (MORT)
Performance Over One-Year: 47.2%
Expense Ratio: 0.40%
Annual Dividend Yield: 6.91%
Three-Month Average Daily Volume: 146,815
Assets Under Management: $317.1 million
Inception Date: Aug. 16, 2011
Issuer: Van Eck Associates Corp.
MORT is a multi-cap fund targeting the MVIS US Mortgage REITs Index.8 The index aims to track the overall performance of U.S. mortgage REITs. Mortgage REITs differ from traditional REITs in that they don't own real estate, but rather generate revenue from issuing mortgages and acquiring loans or mortgage-backed securities. As such, these REITs carry the potential for both substantial returns and significant risk. Just like REM, the top holdings of MORT include Annaly Capital Management, AGNC Investment, and Starwood Property Trust.
<<<
>>> American Tower (AMT) Closes Acquisition of CoreSite Realty
Zacks Equity Research
December 29, 2021
https://finance.yahoo.com/news/american-tower-amt-closes-acquisition-152803514.html
American Tower Corporation AMT has announced the completion of the acquisition of CoreSite Realty Corporation. This was accomplished through a merger of one of its wholly owned subsidiaries with and into CoreSite.
Initially, the transaction is expected to be modestly accretive to American Tower’s adjusted FFO per share but over time it is likely to be increasingly accretive.
Amid acceleration in 5G deployments, and wireless and wireline convergence, this transaction offers American Tower the opportunity to capitalize on CoreSite’s highly interconnected data center facilities and critical cloud on-ramps. Along with this recurring growth, the company will have the capacity to boost its current tower real estate’s value through the emerging edge compute prospects.
The closing, funded by borrowings under American Tower’s revolving credit facilities and term loans, follows the completion of its prior disclosed tender offer for all CoreSite’s outstanding shares of common stock.
According to American Tower’s November press release, AMT was slated to acquire CoreSite for $170.00 per share in cash. Including assumption and/or repayment of CoreSite’s existing debt at closing, the total consideration for the transaction amounted to roughly $10.1 billion.
As of Sep 30, 2021, CoreSite had 25 data centers, 21 cloud on-ramps and more than 32,000 interconnections in eight major U.S. markets. In the third quarter of 2021, this portfolio helped the company generate annualized revenues and adjusted EBITDA of $655 million and $343 million, respectively.
Over the past five years, CoreSite has averaged double-digit annual revenue growth, making the buyout a strategic fit for American Tower. It is also expected to significantly increase its scale.
Shares of this Zacks Rank #2 (Buy) company have appreciated 28.5% compared with its industry's 29.7% growth so far in the year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Key Picks
Some other key picks from the REIT sector include Prologis PLD, Extra Space Storage Inc. EXR and Rexford Industrial Realty REXR.
Prologis carries a Zacks Rank of 2 at present. Prologis’ 2021 FFO per share is expected to increase 8.4% year over year.
The Zacks Consensus Estimate for PLD’s 2021 FFO per share has been revised marginally upward in two months.
Extra Space Storage holds a Zacks Rank of 2 at present. 2021 FFO per share for Extra Space Storage is expected to increase 29.9% year over year.
The Zacks Consensus Estimate for EXR’s 2021 FFO per share has been revised 2.1% upward in a month.
The Zacks Consensus Estimate for Rexford Industrial’s ongoing-year FFO per share has moved 1.2% north to $1.63 over the past two months.
The Zacks Consensus Estimate for Rexford Industrial’s 2021 FFO per share suggests an increase of 23.5% year over year. Currently, REXR carries a Zacks Rank of 2.
<<<
Crown Castle Intl - >>> 4 Dividend Stocks to Supplement Your Social Security in 2022
Income-minded investors have plenty of good options still available as we move into the new year.
Motley Fool
by James Brumley
Dec 29, 2021
https://www.fool.com/investing/2021/12/29/dividend-stocks-supplement-social-security-2022/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Crown Castle
Dividend yield: 3%
Crown Castle International (NYSE:CCI) isn't a household name. But there's a good chance you or someone in your household relies on Crown Castle's service without even knowing it.
This company owns more than 40,000 cellphone towers and around 80,000 miles worth of fiberoptic cable, leasing access to its infrastructure to more familiar outfits like AT&T and Verizon. As long as you and other consumers need to remain connected to the rest of the world, the telco industry will need a means of keeping those connections in place. This makes for very reliable recurring revenue for Crown Castle.
That reliable revenue has allowed Crown Castle to dish out a dividend in every quarter since 2014 and to raise its annual payout every year since 2018. The yield of 3% may not be thrilling, but given its relatively low risk and secure future, that's a fair payout.
<<<
>>> Why American Tower Can Continue Its Rapid Growth
GuruFocus
by Nathan Parsh
December 27, 2021
https://finance.yahoo.com/news/why-american-tower-continue-rapid-194211064.html
Many investors own real estate investment trusts, or REITs, for their generous dividend yields. There are some REITs that offer a lower yield, and though they might not meet the objectives of an income-focused investor, this doesn't mean that low yielding REITs should be avoided. While some might have low yields due to business problems, there are others that have low yields due to faster growth and higher valuation multiples, and these can sometimes prove to be extremely profitable in the long run.
Take American Tower Corporation (NYSE:AMT), for example. This company's dividend has compounded at a rate of more than 20% since becoming a REIT. Despite this level of dividend growth, American Tower yields just 2% today as the strength in the business has caused the stock to rise more than 166% over the last five years. For context, the S&P 500 Index has returned a cumulative 111% over this period of time. Lets take a closer look into American Tower to see why I believe it will remain a high growth REIT.
Business overview and recent earnings highlights
American Tower began as a subsidiary of a radio systems company in the mid-1990s. It was spun off from its parent company in 1998 and converted to a REIT in 2012. American Tower is valued at $127 billion today and generated annual revenue of slightly more than $8 billion last year.
The REIT has an incredible size and scale as the largest independent operator of wireless telecom and broadcast towers in the world. It is also one of the largest REITs in the world regardless of type of real estate.
American Tower has approximately 43,000 towers in the U.S., giving it a leadership position in what has become an incredibly important industry over the years. This same infrastructure will be vitally important as the rollout of 5G service continues.
American Towers most recent quarter, for which it announced earnings results on Oct. 28, shows that the company continues to capitalize on tailwinds in its business. Revenue for the quarter grew almost 22% to $2.45 billion, topping Wall Street analysts estimates by $40 million. Adjusted funds from operation of $2.49 per share was a 26 cent, or 10.3%, improvement from the prior year and was 17 cents ahead of expectations.
Property revenue surged 19.2%. Organic tenant billings growth, which reflects just properties that the trust has owned since the beginning of the prior year period, was up 4.9%. International was the real driver during the quarter as organic tenant billings growth was 5.9% for the period. The best performing region was Africa, up more than 9%, but Latin American wasn't far behind at 7%.
Prospects for growth
American Tower has expanded from just a U.S.-based business into international markets. As of the end of last year, American Tower had nearly 76,000 towers in the Asia/Pacific region, 41,500 in Latin America, 20,000 in Africa and 5,330 in Europe. American Tower has just begun entry into certain markets such as Australia, Canada, France, Niger and Spain, all of which occurred within the past five years.
Outside of the U.S., most of American Tower's markets haven't completed 4G networks yet. Regardless, data consumption is surging, with some international markets seeing 100% growth year-over-year. The demand for additional towers will mean higher capital spending budgets on the part of carriers in order to improve infrastructure, putting the REIT in a sweet spot to benefit from higher global demand for its properties.
As a result, American Tower expects nearly all of its regions to see organic growth in the coming years. In total, the REIT expects organic billings growth of 4.5%. The U.S. and Canada are projected to return as much as 4%, primarily due to 5G rollout. International markets should grow at a rate of 5% to 6%. These markets are led by Africa, with expected growth of at least 8%; Latin America, which is projected to be higher by more than 7%; and Europe, up at least 5%. Asia is expected to be flat, as other companies are dominant in this region.
International regions haven't experienced as much development as its domestic market, which should provide American Tower a long runway for growth as these markets should see increased demand for wireless telecom and broadcast service going forward.
The REIT has long-term contracts with most carriers that provide automatic rent escalators. In the U.S., the typical yearly increase is close to 3% with many international markets tied to inflation, giving some visibility to future revenue totals.
American Tower hasnt been shy about acquiring additional businesses to augment its core portfolio. For example, the REIT announced on Nov. 15 that it was acquiring CoreSite, which owns 25 data centers and more than 32,000 interconnections in the U.S., for $10 billion in cash. This will grant American Tower entrance into new markets that it doesn't already touch. The transaction will add $655 million in annual revenues to American Towers business, which would have represented more than 8% of last years total.
The REIT has been very successful as adjusted funds from operation (AFFO) have a compound annual growth rate (CAGR) of 15% over the last 10 years. This growth rate would have been higher if the share count had not increased by 13% over the same time frame.
Dividend analysis
Business results have enabled American Tower to grow its dividend at a level rarely seen amongst REITs. Unlike most in the real estate sector, the trust increases its dividend almost every quarter instead of once per year. Shareholders received 20% more in dividends per share this year than they did in 2020. The trust raised its dividend 6.1% for the Jan. 14, 2022 payment date. American Tower has a nine-year dividend growth streak while the dividend has a CAGR of 22.3% since 2012.
With an annualized dividend of $5.56, American Tower has a forward dividend yield of 2%. As REITs go, this is a low dividend yield, but this tops the stocks historical average yield of 1.8%. It is also superior to the 1.25% average yield for the S&P 500 Index.
The REIT distributed $4.33 of dividends per share in 2021. Wall Street analysts expect American Tower to earn $10.25 per share in adjusted funds from operation this year, resulting in a projected payout ratio of 42%. Adjusted funds from operation are predicted to rise to $10.30 for the next fiscal year. Using the new annualized dividend, the payout ratio is 54%. American Tower has averaged a payout ratio of 44% over the past five years. Both the average and projected payout ratios are very low for a REIT, putting American Tower in a good position to continue to raise its dividend moving forward.
Valuation analysis
Shares of American Tower trade close to $279. Using analysts estimates for 2021 and 2022, the stock has a forward price-to-funds-from-operation ratio of just over 27 for both years. This is a premium to the stocks five-year average price-to-funds-from-operation ratio of 23.4.
Shares are also trading ahead of their GuruFocus Value, but not overly so.
Why American Tower Can Continue Its Rapid Growth
American Tower has a GF Value of $269.72, equating to a price-to-GF-Value ratio of 1.03. The stock is rated as fairly valued by GuruFocus.
Final thoughts
American Tower might not offer the type of yield that REIT investors are accustomed to seeing from this sector of the economy, but this isn't due to a lack of raising dividends on the company's part. The dividend has compounded at an extremely high rate since the REIT was formed. Shareholders of the REIT have benefited from incredible share price returns over the medium-term, easily outperforming the broad market.
American Tower is set to benefit from several catalysts for growth, especially 5G rollout in the U.S. and growing demand in developing markets, which should position the REIT to continue its streak of strong earnings results.. In turn, dividend growth will likely remain elevated.
The stock isn't cheap, either on a historical basis or compared to the GF Value, but quality names with excellent fundamentals and high expectations for future growth rarely are.
The long-term track record for adjusted funds from operation and dividend growth suggests that American Tower could be a solid investment for those looking for more than just yields from a REIT investment.
<<<
Tricon Residential - >>> Here’s the best new asset class in real estate: Tricon Residential
MarketWatch
by Thomas Hum
October 8, 2021
https://finance.yahoo.com/news/heres-the-best-new-asset-class-in-real-estate-tricon-residential-ceo-145713574.html
The housing market continues to be characterized by low inventories and soaring prices, with year-over-year deceleration not expected until January 2022. Within this hot real estate market, Tricon Residential (TCNGF, TCN.TO) President and CEO Gary Berman believes that the best new asset class may be single-family rental properties.
“Single-family rental — we think this is potentially the best new asset class in real estate, both for investors and consumers,” Berman told Yahoo Finance Live. “And it provides an unbelievable opportunity for consumers as well who may be struggling in the pandemic with affordability.”
Berman joined Yahoo Finance Live on Tricon Residential’s U.S. listing day to discuss the state of the housing market as well as the forward outlook for real estate investment in areas such as the Sun Belt. A Toronto-based real estate company which has also been trading publicly in Canada, Tricon Residential invests in single-family rental and multi-family rental homes, and owns about 33,000 properties across the U.S. and Canada.
The company focuses on the middle market, Berman said, and invests heavily in properties located in the Sun Belt.
“People are challenged looking for housing during the pandemic, and we provide what we think is a hotel-ready product and a maintenance-free lifestyle with affordable rent. And we think it's exactly what the market needs,” Berman said. “And it's a real win, a real victory, we think, both for the consumer or renter and obviously our investors as well.”
'Insatiable demand' for housing
The California housing market is expected to remain solid if the pandemic is kept under control, but structural challenges may still persist. Existing single-family home sales in the state are forecasted to decline 5.2 percent from 2021 to 2022, and California’s median home price is also expected to rise 5.2 percent to $834,400 next year. This follows a projected 20.3 percent increase to $793,100 in 2021.
According to Berman, in order to satisfy the “insatiable demand” currently seen in the housing market, Tricon Residential is going to focus on doubling its single-family rental holdings.
“Right now, we own about 25,000 single family homes throughout the Sun Belt. We want to double that to 50,000 homes over the next three years,” he said. “And really, at the end of the day, there's so much demand for what we're doing. It's a high-class problem.”
With eviction moratoriums formally ending in states around the country such as California, Berman said that Tricon Residential remains cognizant of the challenges that its customer base has been and continues to experience as the economic ramifications of the pandemic persist.
“A priority at the company [is] what we call self-governed or limited renewal increases,” Berman said. “So our renewal increases during the pandemic have been anywhere from 0 percent to maybe 5 percent in an environment where we could probably be passing on renewal increases of 10 percent to 12 percent.”
In the long run, he said, striving for low turnover benefits both the company’s tenants as well as its investors.
“We're really trying to put ourselves in the shoes of our residents and really drive the best low turnover model we can,” Berman said. “We don't want to force our residents out of their homes. We want them to stay with us and really be long-term renters. And we think in the long-term, that's the best thing for investors as well.”
<<<
Digital Realty - >>> 2 High-Yield Tech Stocks to Buy in January
These income-generating companies can make long-term investors a lot richer.
Motley Fool
by Rich Duprey
Dec 30, 2021
https://www.fool.com/investing/2021/12/30/2-high-yield-tech-stocks-to-buy-in-january/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Digital Realty
Real estate investment trust (REIT) Digital Realty (NYSE:DLR) is an unusual choice for a high-yield tech stock because REITs are usually seen as financial stocks, not technology picks. However, because Digital Realty owns and operates warehouses full of servers and data centers, it neatly straddles both worlds.
Data center REITs are also becoming a rare commodity these days because of the merger and acquisition boom in the space. Assuming all the deals that have been announced are completed, Digital Realty and Equinix (NASDAQ:EQIX) will be the last two remaining REITs in the space. With market valuations of $50 billion and $75 billion, respectively, it's unlikely anyone will be acquiring them or taking them private.
Digital Realty owns 282 data centers that represent 35 million square feet of space, including 36 data centers held as investments in unconsolidated joint ventures (Equinix owns 235 data centers).
Data centers essentially serve as the backbone of the internet, providing the nerve center for everything that occurs in the cloud and online, whether it's e-commerce or Internet of Things devices accessing their network. All of that data needs a home in which to live, and data centers provide the warehousing for the servers and networking equipment in a secure environment.
However, data centers are no longer simply a bricks-and-mortar presence -- they have moved into the cloud themselves. Digital Realty's PlatformDIGITAL service is a global data center platform that meets the evolving needs of enterprise customers by allowing them to customize by the cabinet or to scale and hyperscale for very large deployments. It recently closed on a joint venture with Brookfield Infrastructure Partners (NYSE:BIP) to bring the platform to India, one of the world's biggest, most important data center markets.
Third-quarter adjusted funds from operations (AFFO), a critical profitability metric for REITs, was $1.60 per share, up from $1.47 per share a year ago, and was primarily pushed higher by the expansion of the PlatformDIGITAL service.
Digital Realty's dividend currently yields 2.7% annually, which is not especially high compared to AT&T. It is still a hefty payout for a tech stock, and one that investors should count on growing in the future.
<<<
>>> Terreno Realty (TRNO) Acquires Redmond Property, Stock Rises
Zacks Equity Research
December 30, 2021
https://finance.yahoo.com/news/terreno-realty-trno-acquires-redmond-184706343.html
Shares of Terreno Realty Corporation TRNO have rallied more than 3% during the last two trading sessions. This industrial REIT is on a buyout spree and recently acquired an industrial property in Redmond, WA for $3.5 million. The move comes as part of its acquisition-driven growth strategy.
This latest acquisition comes after the company shelled out $33.5 million to purchase an industrial property in Woodinville, WA and expended $74.1 million net of free-rent credits to acquire an industrial property in Hialeah, FL.
The Redmond property, 100% leased to one tenant on a short-term basis, is a 0.8-acre improved land parcel at 9045 Willows Road. It is between I-405 and SR 520, representing an advantageous location and positioning it well to lure tenants. The estimated stabilized cap rate of the property is 4.9%.
Demand for industrial real estate space has been shooting up amid an e-commerce boom, with growth in industries and companies making efforts to improve supply-chain efficiencies. Terreno Realty is also banking on such opportunities. It is focused on expanding its portfolio on acquisitions. TRNO is targeting functional assets at in-fill locations, which enjoy high-population densities and are located near the high-volume distribution points.
Terreno Realty’s latest spate of acquisitions also include purchasing an industrial property in Bladensburg, MD for $11.9 million and shelling of $60.8 million to acquire an industrial property at 5150-5236 Eisenhower Avenue, inside the Capital Beltway in Alexandria, VA.
With such expansion efforts, Terreno Realty is poised to enhance its portfolio in the six major coastal U.S. markets — Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, DC — which display solid demographic trends and witness healthy demand for industrial real estate.
Apart from the fast adoption of e-commerce, industrial real estate is anticipated to benefit from an increase in inventory levels post the global health crisis, offering scope to industrial landlords, including Terreno Realty, Prologis PLD, Duke Realty DRE and Rexford Industrial Realty REXR, to enjoy a favorable market environment.
Terreno Realty currently carries a Zacks Rank #2 (Buy). In the past three months, TRNO’s shares have rallied 34.4% compared with the industry’s growth of 14.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prologis carries a Zacks Rank of 2 at present. Prologis’ 2021 FFO per share is expected to increase 8.4% year over year.
The Zacks Consensus Estimate for PLD’s 2021 FFO per share has been revised marginally upward in two months.
Duke Realty carries a Zacks Rank of 3 (Hold) at present. The long-term growth rate for Duke Realty is projected at 7.80%.
The Zacks Consensus Estimate for DRE’s 2021 FFO per share has been revised marginally upward in two months to $1.74.
The Zacks Consensus Estimate for Rexford Industrial’s ongoing-year FFO per share has moved 1.2% north to $1.63 over the past two months.
The Zacks Consensus Estimate for Rexford Industrial’s 2021 FFO per share suggests an increase of 23.5% year over year. Currently, REXR carries a Zacks Rank of 2.
<<<
Farmland Partners - >>> This Farm REIT Just Made a Giant Change
Farmland Partners has recently been dealing with unusually complicated issues, but the REIT just completed a deal that makes the company even more complex.
Motley Fool
by Reuben Gregg Brewer
Jan 6, 2022
https://www.fool.com/investing/2022/01/06/this-farm-reit-just-made-a-giant-change/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Farmland Partners is working through some legal issues after successfully defending itself against a short seller.
The farmland REIT just bought a new business, expanding its reach.
Farmland Partners is now even more complex, which could be good or bad, depending on how you look at investing.
Farmland is an interesting asset class that has been gaining the attention of institutional buyers. The logic is pretty simple: No new farmland is being created. In fact, farmland is often repurposed for homes and other types of real estate development.
Real estate investment trust (REIT) Farmland Partners (NYSE:FPI) is looking to take advantage of this scarcity -- only this REIT's story isn't quite so simple.
The value of a farm
Farmland Partners estimates that there's about $2.5 trillion worth of farmland in the U.S., a valuation that's on par with the rental-apartment market. Of that amount, only about 1% of farmland is owned by institutions like pension funds, versus 5% for apartments. So there's material opportunity for growth here.
There's also material appeal on a risk-adjusted basis. During the past 30 years, the standard deviation, a measure of volatility, for farmland is about 7.5%, compared to nearly 22% for the S&P 500 Index. This difference leads to a Sharpe ratio, a measure of risk-adjusted performance, of 1.2 for farmland versus 0.4 for the S&P 500 Index.
Notably, the average REIT has a Sharpe ratio of 0.4 as well, so this is really about the unique nature of farmland, not property in general. Basically, if you are looking for slow and steady growth, farmland fits the bill. And, even better, farmland returns don't correlate highly with other assets, meaning they can help with diversification.
On that basis, you'd think Farmland Partners would be a slam-dunk investment option. Unfortunately, it was hit by a short-selling scheme a few years ago that necessitated a dividend cut to ensure liquidity during a legal battle. By comparison, peer Gladstone Land has been able to continue growing and raising its dividend in the absence of legal distractions.
Farmland Partners' efforts to fight back was largely successful, getting a damaging report about the company retracted. Unfortunately, the company is still battling related shareholder-class action lawsuits, even though the short-seller claims were debunked. So this REIT is something of a turnaround play in that regard.
A big change
That said, Farmland Partners just made an acquisition that shifts the picture even more than the short-seller fiasco. In late 2021, Farmland Partners bought Murray Wise Associates. According to the news release announcing the deal, Murray Wise, the chief executive officer of Murray Wise Associates, founded Westchester Group, which is the largest institutional farmland asset manager. He started Murray Wise Associates as a spinoff of Westchester Group's brokerage, auction, and farm-management business when Westchester was acquired by the pension fund Teachers Insurance and Annuity Association in 2010.
Essentially, the goal here is for Farmland Partners to add an asset-management operation to its business. This pushes Farmland Partners beyond the typical REIT configuration, in which companies own properties and pass the income they generate from rents on to investors. Now, Farmland Partners will also help farmers buy and sell properties, create and manage institutional partnerships, and even directly manage farms on behalf of others, earning fees for the effort.
Farmland Partners is really looking to become a one-stop shop for farm investing, but that will make it a much more complicated company for investors to track and understand. If you like to keep things simple, this already complicated story just got even more complicated.
That said, for investors willing to watch their investments more closely, Farmland Partners' new business direction could be an interesting opportunity. Essentially, with one investment, you get broad exposure to farmland, including property ownership, property brokerage, and property management. That provides multiple avenues for growth in what is a large and underinvested asset class.
There's one caveat, however: The REIT is planning to focus on business growth and expects its dividend yield, now about 1.6%, to be fairly modest. So, income-focused investors probably won't like the stock.
So who should buy Farmland Partners?
At the end of the day, Farmland Partners' new business model will allow investors to access the farmland sector in a broad and diversified way. That's the good news. The bad news is that this change suggests that this already low-yielding REIT will remain that way even as it moves past its legal headwinds, limiting its appeal to growth-oriented investors and those looking for asset classes with low correlations to other investments.
If that sounds like you, then a deep dive could be appropriate. If you prefer simple investments, however, then Farmland Partners, despite operating in an interesting property niche, probably won't appeal to you.
<<<
Gladstone Land - >>> Forget Bitcoin: I'm Buying This Under-the-Radar REIT
This real estate investment trust offers similar benefits to investing in Bitcoin, with less volatility.
Motley Fool
by Matthew DiLallo
Jan 3, 2022
https://www.fool.com/investing/2022/01/03/forget-bitcoin-im-buying-this-under-the-radar-reit/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Investing in farmland is a better inflationary hedge because it's less volatile and generates income.
Farmland REIT Gladstone Land is a good way to invest in farmland.
Like many people, I've been thinking about buying some Bitcoin (CRYPTO:BTC). The main reason is to hedge against inflation, which has been running hot this year. However, I haven't purchased any because it's so volatile. The cryptocurrency has had several large declines from its all-time high, including more than 50% earlier this year.
Because of that, I've started looking elsewhere than cryptocurrency for an inflation hedge. While I also considered investing in gold, I've homed in on an under-the-radar real estate investment trust (REIT) that offers many of the same benefits to buying Bitcoin, plus some additional ones without the stomach-churning volatility.
That REIT is farmland-focused Gladstone Land (NASDAQ:LAND). Here's why I plan to buy it instead of Bitcoin as an inflation hedge.
Why farmland?
Before we dig into Gladstone Land, I wanted to lay out the case for farmland as an investment. Since 1991, farmland has delivered higher cumulative returns than all other major asset classes except REITs. Further, farmland has produced those higher returns with less volatility than all but two major asset classes (CDs and AAA-rated bonds). In fact, since 1991, farmland hasn't had a single down year, whereas gold, the stock market, and Bitcoin have all experienced declines of more than 50% from their highs.
Two factors drive farmland's ability to deliver attractive returns: annual cash rent and land value appreciation. Farmland generates an income yield for its investors, making it stand out from other inflationary hedges like gold and Bitcoin, which don't produce income. Meanwhile, farmland benefits from inflation because land values tend to rise by at least the inflation rate. These factors make farmland an excellent inflation hedge.
Digging into Gladstone Land
Gladstone Land currently owns 164 farms comprising about 113,000 acres across 15 states. Its farms primarily grow fresh produce, like fruits and vegetables, or permanent crops, such as berries and nuts. These types of farms tend to be better investments than those that grow commodity crops (e.g., corn, wheat, and soy) because they experience less price volatility and government dependence, as well as lower storage costs.
Gladstone primarily leases its farms to farmers under long-term triple net leases, making the tenant responsible for insurance, maintenance, and real estate taxes. These leases typically include a fixed cash payment with annual escalations, upward market adjustments, or participation features, such as a percentage of the farm's gross revenue.
Those lease terms provide Gladstone Land with a nice inflation buffer. It typically ties annual rent escalations to the inflation rate. Meanwhile, participation features provide upside to higher prices, with fresh produce historically outpacing the historical inflation rate by 1.5 times since 1980. In addition to its inflation-protected lease income, Gladstone's farms benefit from rising land values, providing another layer of inflation protection.
However, Gladstone Land is more than an inflation hedge. The farmland REIT has a long history of growing value for shareholders by expanding its farm portfolio through acquisition. For example, it bought five new farms across three states and some additional water access for $62.3 million in the third quarter. Since its initial public offering (IPO) in 2013, Gladstone has grown its farm portfolio from less than $200 million to nearly $1.4 billion today.
Combined with rising lease income, its steady diet of acquisitions has enabled Gladstone to grow its cash flow per share and dividend at attractive rates. Gladstone has increased its monthly dividend 24 times in the last 27 quarters, raising it by 50.7% overall. It aims to continue expanding that payout in the future at a rate that outpaces inflation. Overall, Gladstone Land has delivered 14.6% compound annual total returns for its shareholders since its IPO.
All the benefits of Bitcoin (and more) -- without the volatility
One of the premises of investing in Bitcoin is it can be an inflation hedge. While the cryptocurrency's returns have certainly outpaced inflation over the years, they have been extremely volatile.
That's why I've decided to forget about using Bitcoin to hedge against inflation. Instead, I plan to invest in farmland through little-known REIT Gladstone Land. It has a long history of delivering inflation-beating returns with a lot less volatility than Bitcoin, which seems likely to continue in the future.
<<<
Public Storage, Invitation Homes - >>> 2 Unstoppable REIT Stocks To Buy in 2022
These two companies are poised for unstoppable growth in the REIT sector.
Motley Fool
by Liz Brumer-Smith
Dec 31, 2021
https://www.fool.com/investing/2021/12/31/2-unstoppable-reit-stocks-to-buy-in-2022/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Public Storage spent $5.1 billion in 2021 alone to grow its portfolio.
Invitation Homes is seeing unparalleled demand, with rents rising 10.4% YoY.
Many of the sectors that were hit hard by initial pandemic closures last year made a huge comeback in 2021 which, in turn, gave a massive boost to the real estate industry. This helped the index for all real estate investment trusts (REITs), as tracked by the NAREIT, achieve a 38% return year to date, outpacing the S&P 500 by over 7%. But as 2021 comes to a close, Public Storage (NYSE:PSA) and Invitation Homes (NYSE:INVH) specifically appear to be teed up for another unstoppable year of growth.
Here's a closer look at these REITs today and why these REIT stocks should be on your radar to buy in 2022.
1. Public Storage
The self-storage industry has performed incredibly well, not just over the past year but over the past several decades, outperforming all other commercial real estate asset classes over the past 26 years. Public Storage is the largest operator in the industry, having 2,678 facilities under management or ownership across 39 states in the United States and interest in 247 units in Europe. Year to date, the company has seen share prices increase 64% while providing investors with an annualized return of 65%.
New demand for storage facilities as people relocate or downsize during the pandemic has helped boost Public Storage's earnings this year, with funds from operations (FFO) -- a common metric used to evaluate REITs that is similar to earnings per share (EPS) -- up 35% for the nine months ended 2021. And the company is finishing 2021 with a bang after closing on the acquisition of All Storage, which adds 56 storage facilities for a total of 7.5 million rental square feet, largely in the greater Dallas/Ft. Worth metro. This acquisition is a part of the $5.1 billion Public Storage has spent to expand its portfolio through new acquisitions and developments in 2021 alone.
Public Storage is entering 2022 in a larger position than ever before, while still having a low debt-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio of 4.0x as well as $958 million of cash and cash equivalents. Expansion of that scale will undoubtedly benefit shareholders, having direct and immediate impacts on revenues and FFOs. Given its acquisition activity and strong financial position, 2022 could be another great year for this storage giant.
2. Invitation Homes
Invitation Homes is the premier single-family rental operator, specializing in the development of build-to-rent communities and the acquisition of existing single-family rental homes across the country. Considering rental demand is growing like crazy, this means Invitation Homes is in a particularly strong position as we enter 2022.
Year to date, Invitation Homes saw share prices increase 54% . FFO has increased 15% year-over-year, and net operating income (NOI) has grown 43%. In 2021, Invitation Homes added 3,259 homes to its portfolio, while blended rent growth climbed 10.4% year over year -- and its growth opportunities aren't over yet. Rental demand, particularly for single-family homes, is expected to remain high for years to come. Invitation Homes also announced this year that it would enter into a partnership with PulteGroup to purchase 7,500 homes from the homebuilder over the next five years, providing a steady pipeline of acquisitions for the company to grow its portfolio.
These two REITs are great companies in their respective niches of real estate, backed by major long-term trends favoring growth and well-positioned portfolios.
<<<
>>> Residential REITs ETFs to Capitalize on Rising Apartment Renters
ETF Trends
by MAX CHEN
AUGUST 4, 2021
https://www.etftrends.com/residential-reits-etfs-to-capitalize-on-rising-apartment-renters/
Due to the elevated housing prices, priced-out home buyers are reluctantly coming back to the cities and renting again, bolstering residential real estate investment trusts and sector-related exchange traded funds.
Stock prices of publicly-traded apartment companies have rallied, with the FTSE Nareit Equity Apartments index up 42% since January, as compared to the 17% gain for the S&P 500 over the same period, the Wall Street Journal reports.
Meanwhile, median rent on apartments has increased more than 10% over the past year to $1,244, or 9.4% above where rents were back in March 2020, right before Covid-19 lockdowns, according to Apartment List.
Contributing to the rise in apartment rents, demand has rebounded in response to surging home prices that forced many would-be home buyers to give up and go back to paying rent. Median existing-home sales prices were 23.4% higher as of June year-over-year to $363,300, a record high, according to the National Association of Realtors.
“It’s kind of a good time to be an urban apartment owner again,” Mark Parrell, chief executive of Equity Residential, a real-estate investment trust, told the WSJ.
Investors who want a piece of the real estate action can access the space through funds like the Vanguard Real Estate ETF (NYSEArca: VNQ). VNQ seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of the MSCI US Investable Market Real Estate 25/50 Index that measures the performance of publicly traded equity REITs and other real estate-related investments. However, broad REITs sector-specific ETFs have low exposure to residential REITs, with VNQ’s underlying portfolio including a 14.0% tilt to residentials.
On the other hand, ETF investors who are interested in gaining exposure to this ongoing trend in the housing market can consider residential-heavy REIT ETFs, such as the iShares Residential Real Estate Capped ETF (NYSEArca: REZ) and NuShares Short-Term REIT ETF (BATS: NURE). NURE includes a hefty 49.7% tilt toward apartment- or rental-related REITs while REZ has a 51.0% weight in residential REITs.
<<<
>>> Gladstone Land Acquires Additional Farmland in Florida
Acesswire
December 20, 2021
https://finance.yahoo.com/news/gladstone-land-acquires-additional-farmland-133000518.html
MCLEAN, VA / ACCESSWIRE / December 20, 2021 / Gladstone Land Corporation (NASDAQ:LAND) ("Gladstone Land") announced that it has acquired 1,204 gross acres of farmland, including 975 farmable acres, located north of Fort Myers, Florida, for approximately $7.4 million. In connection with the acquisition, Gladstone Land entered into a five-year, triple-net lease agreement with the seller and current tenant. The property is farmed primarily for sod, melons, and cattle.
"We are very pleased to add this versatile property to our portfolio," said Bill Frisbie, Executive Vice President of Gladstone Land. "Demand for farmable acreage in Florida continues to increase, and we are excited to partner with a very strong tenant who will manage the property well."
"The acquisition of this farm adds to our existing properties in the Southeast and is another good, long-term investment for us," said David Gladstone, President and CEO of Gladstone Land. "We have had a strong year in 2021 with acquisitions and look forward to another good year in 2022."
About Gladstone Land Corporation:
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 164 farms, comprised of approximately 113,000 acres in 15 different states and 45,000 acre-feet of banked water in California, valued at approximately $1.5 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 10 to 20-plus years and harvested annually. The company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 106 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The company has increased its common distributions 24 times over the prior 27 quarters, and the current per-share distribution on its common stock is $0.0452 per month, or $0.5424 per year. Additional information, including detailed information about each of the company's farms, can be found at www.GladstoneLand.com.
<<<
STAG Industrial (STAG), Realty Income (O) - >>> You could be a landlord for Amazon, FedEx and Walmart with these REITs that net up to a 4.4% yield — you can even collect on a monthly basis
Money Wise
by Jing Pan
December 18, 2021
https://finance.yahoo.com/news/could-landlord-amazon-fedex-walmart-180000530.html
You could be a landlord for Amazon, FedEx and Walmart with these REITs that net up to a 4.4% yield — you can even collect on a monthly basis
Being a landlord is one of the oldest ways to earn a passive income. And these days, you don’t have to buy a house to get a piece of the action.
Check out real estate investment trusts, which are publicly traded companies that own income-producing real estate.
REITs collect rent from their properties and pass it along to shareholders in the form of dividends. That means investors don’t have to worry about screening tenants, fixing damages or chasing down late payments. Instead, they simply sit back and enjoy the dividend checks rolling in when they pick a winning REIT.
Of course, the COVID-19 pandemic did impact some commercial real estate. And not all REITs are the same. If you are a landlord for e-commerce giant Amazon, for instance, you should have no problem collecting a steady stream of rental income.
With that in mind, let’s take a look at two REITs paying oversized dividends to investors — one could be worth pouncing on with some of your extra cash.
Amazon’s landlord
The first one is STAG Industrial (STAG), a REIT that owns and operates single-tenant industrial properties throughout the U.S. Its biggest tenant is Amazon.
The company’s portfolio consists of 517 buildings totaling approximately 103 million rentable square feet across 40 states.
Note that 434 of the 517 properties are warehouses, which happen to be an essential part of e-commerce.
Moreover, a tenant survey in 2020 revealed that around 40% of the REIT’s portfolio handles e-commerce activity.
To see how solid STAG Industrial is, take a look at its dividend history.
Since the company went public in 2011, it has paid a higher dividend every single year.
While most dividend-paying companies follow a quarterly distribution schedule, STAG Industrial pays shareholders every month. The monthly dividend rate stands at 12.08 cents per share, which translates to an annual yield of 3.2%.
STAG Industrial shares are up 50% year to date. If you don’t feel comfortable picking individual stocks in this elevated market, you can always build a diversified passive income portfolio automatically just by investing your spare change.
Walmart’s landlord
When it comes to paying monthly dividends, one company stands out above all — Realty Income (O).
Realty Income has been paying uninterrupted monthly dividends since its founding in 1969. That’s 616 consecutive monthly dividends paid.
Better yet, since the company went public in 1994, it has announced 114 dividend increases.
Realty Income has a diverse portfolio of nearly 11,000 commercial properties located in all 50 states, Puerto Rico, the UK and Spain. It leases them to around 650 tenants operating across 60 industries.
This means even if one tenant or industry enters a downturn, the impact on company-level financials will likely be limited.
For instance, while Realty Income rents some properties to AMC Theaters — whose business was hurt by COVID-19 — it also has Walgreens, FedEx and Walmart as some of its top tenants. And these businesses turned out to be largely pandemic-proof.
Earlier this week, the REIT increased its monthly cash dividend to 24.65 cents per share, giving the stock an annual dividend yield of 4.4%.
To put things in perspective, the average dividend yield of S&P 500 companies is just 1.3% today.
Looking beyond REITs
Of course, stocks are volatile. And even the best REITs are not immune to the market’s ups and downs.
Diversification is key — and you don’t have to stay in the stock market to get it.
If you want to invest in something insulated from stock market swings, take a look at some lesser-known alternative assets.
Traditionally, investing in sectors like exotic vehicles or multifamily apartment buildings or even litigation finance have only been options for the ultrarich.
But with the help of new platforms, these kinds of opportunities are available to retail investors, too.
<<<
Gladstone Land - >>> 2 Stocks That Cut You a Check Each Month
These two very successful niche operators have been handing out monthly dividends for many years running.
Motley Fool
by Eric Volkman
Dec 17, 2021
In this current era, where change often moves with lightning speed, who wants to wait three months to receive a dividend? Is it because the decades-old standard quarterly dividend is still very much the norm? Why can't it be the exception?
Well for a select group of dividend-paying companies, distributing a chunk of profits in the form of a regular monthly dividend is the norm. Let's take a closer look at two of them -- Realty Income (NYSE:O) and Gladstone Land (NASDAQ:LAND) -- and see if getting paid each month by these dividend stocks is right for you.
1. Realty Income
Realty Income, a real estate investment trust (REIT) that focuses on retail properties, is the standard-bearer for monthly dividend payers. There's a reason it has trademarked its descriptor as "The Monthly Dividend Company." It's been doling out a steadily increasing payout every turn of the calendar since its shares were listed on the New York Stock Exchange way back in 1994.
The company has thousands of sources of revenue. At the end of its most recently reported quarter, its massive portfolio comprised 7,018 properties. Nearly all of these were located in the U.S., but the company is branching out; in September, it closed its first transaction on the European continent -- a 93 million euro ($105 million) sale/leaseback deal with French supermarket operator Carrefour on seven properties in Spain.
Given this financial commitment, and the obvious enthusiasm with which the company announced it, we can expect much greater expansion in this huge new market for the REIT.
Meanwhile, Realty Income continues to grow its fundamentals at admirable rates. In the third quarter, it managed to lift its total revenue by almost 22% on a year-over-year basis. Growth in the company's adjusted funds from operations (AFFO), the most important profitability metric for REITs, soared even higher at 26%.
Nearly all of those 7,000-plus properties are home to active businesses, as Realty Income's occupancy rate is just under 99%. The company rents its spaces out on triple-net leases that have very long terms (the average is nearly nine years). This provides a very solid tenant base for the REIT and effectively locks in years of sturdy cash flow. No wonder the company is willing to share its wealth so frequently.
Realty Income's latest monthly dividend was a shade under $0.25 per share. At the latest closing share price, this yields 4.4%.
2. Gladstone Land
Elsewhere in the REIT sector, we have Gladstone Land. This company's focus is on farmland and assets related to the same, i.e., properties that are rented under triple-net leases to their tenants. Gladstone owned 160 farms covering more than 108,000 acres across 14 U.S. states as of November. All of its properties are under lease.
Are you saying you've never heard of an agricultural properties REIT? That's not surprising. There are only very few on the market and of that small group, Gladstone is far and away the largest and most significant.
Gladstone tends to favor farms that grow fresh produce and select "permanent" crops like nuts and blueberries. It believes these are more profitable and can thus produce higher rental income. These crops also tend to require lower storage expenses and are less volatile in price than commodity crops such as wheat and corn.
This focus makes for a good business strategy. Thanks to organic growth (no pun intended) and net additions to its property portfolio (33, to be exact), Gladstone posted a robust 40% year-over-year increase in revenue in its Q3 (to just under $19.6 million). AFFO saw an even higher leap, bounding 66% upwards to nearly $5.3 million.
That's entirely in character for Gladstone, which over the past few years has seen dramatic improvements in both revenue and AFFO.
All this means Gladstone has plenty in its financial tank for a dividend that gets distributed 12 times per year. The dividend has been paid without fail since the company listed on the stock market in 2013.
The payout isn't immense in either absolute terms (the latest one was less than $0.05 per share) or yield, which these days is 1.8%. However, the regularity of this reliable monthly dividend, Gladstone's strong position in its very limited niche, and its vast scope for expansion make it a compelling stock worth considering. After all, this is a huge country that still has plenty of agricultural lands available to develop.
<<<
>>> Gladstone Land Acquires Pistachio Orchard in California
Yahoo Finance
December 6, 2021
https://finance.yahoo.com/news/gladstone-land-acquires-pistachio-orchard-133000557.html
MCLEAN, VA / ACCESSWIRE / December 6, 2021 / Gladstone Land Corporation (NASDAQ:LAND) ("Gladstone Land") announced that it has acquired 2,635 gross acres of farmland, including 1,776 planted acres of pistachios, located near Lost Hills, California, for $88.0 million. In connection with the acquisition, Gladstone Land entered into a 10-year, triple-net lease agreement with the seller.
"We are very pleased to add these mature pistachio trees to our portfolio," said Tony Marci, Managing Director of Gladstone Land. "The trees are planted in soils and a climate that are well-suited to pistachios, which is evident in the excellent yield history of the orchard."
"We value our tenants as much as the properties in our portfolio," said Bill Reiman, Executive Vice President of Gladstone Land. "We are excited to enter into a lease and begin a relationship with an excellent and established farmer in the region."
"The acquisition of this pistachio orchard adds to our existing permanent crop farmland and is another good, long-term investment for us," said David Gladstone, President and CEO of Gladstone Land. "We have had a strong year in 2021 and look forward to another good year in 2022."
About Gladstone Land Corporation:
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 163 farms, comprised of over 111,000 acres in 15 different states and 45,000 acre-feet of banked water in California, valued at approximately $1.5 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 10 to 20-plus years and harvested annually. The company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 106 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The company has increased its common distributions 24 times over the prior 27 quarters, and the current per-share distribution on its common stock is $0.0452 per month, or $0.5424 per year. Additional information, including detailed information about each of the company's farms, can be found at www.GladstoneLand.com.
<<<
>>> Capital Gains Tax on Home Sales
Investopedia
By CHAD LANGAGER
November 27, 2021
https://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral
Reviewed by ANDY SMITH
Fact checked by KATRINA MUNICHIELLO
PART OF
Guide to Selling Your Home
TABLE OF CONTENTS
How Much Is Capital Gains Tax?
Requirements and Restrictions
When Is a Home Sale Fully Taxable?
Capital Gains Tax Example
How to Avoid Capital Gains Tax
How Real Estate Taxes Work
Taxes on Investment Property
Real Estate Taxes vs. Property Taxes
The Bottom Line
Frequently Asked Questions
Your home is likely your life's biggest and proudest purchase: all the painstaking measures you took—countless property searches, contract negotiations, inspections, and closing—to arrive at the dream of homeownership. Now, it's time to sell. What next? Did you know that your home is considered a capital asset, subject to capital gains tax? If your home has appreciated in value, you could be required to pay taxes on the profit.
However, thanks to the Taxpayer Relief Act of 1997, most homeowners are exempt.1
If you are single, you will pay no capital gains tax on the first $250,000 of profit (excess over cost basis). Married couples enjoy a $500,000 exemption. There are, however, some restrictions.1
KEY TAKEAWAYS
You can sell your primary residence and be exempt from capital gains taxes on the first $250,000 if you are single and $500,000 if married filing jointly.1
This exemption is only allowable once every two years.1
You can add your cost basis and costs of any improvements you made to the home to the $250,000 if single or $500,000 if married.2
Is It True That You Can Sell Your Home And Not Pay Capital Gains Tax?
How Much Is Capital Gains Tax on Real Estate?
To be exempt, the home must be considered a primary residency based on Internal Revenue Service (IRS) rules. These rules state that you must have occupied the residence for at least two of the last five years.3
If you buy a home and a dramatic rise in value causes you to sell it a year later, you would be required to pay capital gains tax. If you've owned your home for at least two years and meet the primary residence rules, you may owe tax on the profit if it exceeds IRS thresholds. Single persons can exclude up to $250,000 of the gain, and married persons filing a joint return can exclude up to $500,000 of the gain.1
Short-term capital gains are taxed as ordinary income, with rates as high as 37% for high-income earners; long-term capital gains tax rates are 0%, 15%, 20%, or 28% with rates applied according to income and tax filing status.4
5
This rule even allows you to convert a rental property into a primary residence because the two-year residency requirement does not need to be fulfilled in consecutive years.3
How the Capital Gains Tax Works with Homes
Suppose you purchase a new condo for $300,000. You live in it for the first year, rent the home for the next three years, and when the tenants move out, you move in for another year. After five years, you sell the condo for $450,000. No capital gains tax is due because the profit ($450,000 - $300,000 = $150,000) does not exceed exclusion amount. Consider an alternative ending in which home values in your area increased exponentially.
In this scenario, you sell the condo for $600,000. Capital gains tax is due on $50,000 ($300,000 profit - $250,000 IRS exclusion). If your income falls between $40,400 and $441,450, your capital gains tax rate as a single person is 15% in 2021.5 (The income range rises slightly, between $41,675 and $459, 750, for 2022.)6 If you have capital losses elsewhere, you can offset the capital gains from the sale of the house by those losses, and up to $3,000 of those losses from other taxable income.7
2021 Long-term Capital Gains Rates
Filing Status 0% Tax Rate 15% Tax Rate 20% Tax Rate
Single < $40,400 $40,400 to 445,850 >$445,850
Married filing jointly < $80,800 $80,800 to $501,600 >$501,600
Married filing separately < $40,400 $40,400 to $250,800 >$250,800
Head of Household < $54,100 $54,100 to $473,750 >$473,750
Applicable to the Sale of a Principal Residence
2022 Long-term Capital Gains Rates
Filing Status 0% Tax Rate 15% Tax Rate 20% Tax Rate
Single < $41,675 $41,675 to $459,750 >$459,750
Married filing jointly < $83,350 $83,350 to $517,200 >$517,200
Married filing separately < $41,675 $41,675 to $258,600 >$258,600
Head of Household < $55,800 $55,800 to $488,500 >$488,500
Applicable to the Sale of a Principal Residence
Requirements and Restrictions
If you meet the eligibility requirements of the IRS, you'll be able to sell the home capital gains tax-free. However, there are exceptions to the eligibility requirements, which are outlined on the IRS website.
The main major restriction is that you can only benefit from this exemption once every two years. Therefore, if you have two homes and lived in both for at least two of the last five years, you won't be able to sell both of them tax-free.3
The Taxpayer Relief Act of 1997 significantly changed the implications of home sales in a beneficial way for homeowners. Before the act, sellers had to roll the full value of a home sale into another home within two years to avoid paying capital gains tax. This, however, is no longer the case, and the proceeds of the sale can be used in any way the seller sees fit.1
When Is a Home Sale Fully Taxable?
Not everyone can take advantage of the capital gains exclusions. Gains from a home sale are fully taxable when:3
The home is not the seller's principal residence
The property was acquired through a 1031 exchange within five years
The seller is subject to expatriate taxes
The property was not owned and used as the seller's principal residence for at least two of the last five years prior to the sale (some exceptions apply)
The seller sold another home within two years from the date of the sale and used the capital gains exclusion for that sale
Capital Gains Tax on Home Sale Example
Consider the following example. Susan and Robert, a married couple, purchased a home for $500,000 in 2015. Their neighborhood experienced tremendous growth and home values increased significantly. Seeing an opportunity to reap the rewards of this surge in home prices, they sold their home in 2020 for $1.2 million. The capital gains from the sale were $700,000.
As a married couple filing jointly, they were able to exclude $500,000 of the capital gains, leaving $200,000 subject to capital gains tax. Their combined income places them in the 20% tax bracket. Therefore, their capital gains tax was $40,000.
How to Avoid Capital Gains Tax on Home Sales
Want to lower the tax bill on the sale of your home? There are ways to reduce what you owe or avoid taxes on the sale of your property. If you own and have lived in your home for two of the last five years, you can exclude up to $250,000 ($500,000 for married people filing jointly) of the gain from taxes.
Adjustments to the cost basis can also help reduce the gain. Your cost basis can be increased by including fees and expenses associated with the purchase of the home, home improvements, and additions. The resulting increase in the cost basis thereby reduces the capital gains.
Also, capital losses from other investments can be used to offset the capital gains from the sale of your home. Large losses can even be carried forward to subsequent tax years. Let's explore other ways to reduce or avoid capital gains taxes on home sales.
Use 1031 Exchanges to Avoid Taxes
Homeowners can avoid paying taxes on the sale of their home by reinvesting the proceeds from the sale into a similar property through a 1031 exchange. This like-for-like exchange—named after the IRS code Section 1031—allows for the exchange of like property with no other consideration or like property including other considerations, such as cash. The 1031 exchange allows for the tax on the gain from the sale of a property to be deferred, rather than eliminated.8
Owners—including corporations, individuals, trust, partnerships, and LLCs—of investment and business properties can take advantage of the 1031 exchange when exchanging business or investment properties for those of like kind.8
The properties subject to the 1031 exchange must be for business or investment purposes, not for personal use. The party to the 1031 exchange must identify in writing replacement properties within 45 days from the sale and must complete the exchange for a property comparable to that in the notice within 180 days from the sale.9
Since executing a 1031 exchange can be a complex process, there are advantages to working with a reputable, full-service 1031 exchange company. Given their scale, these services generally cost less than attorneys who charge by the hour. A firm that has an established track record in working with these transactions can help you avoid costly missteps and ensure that your 1031 exchange meets the requirements of the tax code.
Convert Your Second Home into Your Primary Residence
Capital gains exclusions are attractive to many homeowners, so much so that they may try to maximize its use throughout their lifetime. Because gains on non-primary residences and rental properties do not have the same exclusions, more people have sought clever ways to reduce their capital gains tax on the sale of their properties. One way to accomplish this is to convert a second home or rental property to a primary residence.
A homeowner can make their second home as their primary residence for two years before selling and take advantage of the IRS capital gains tax exclusion. However, stipulations apply. Deductions for depreciation on gains earned prior to May 6, 1997, will not be considered in the exclusion.10
According to the Housing Assistance Tax Act of 2008, a rental property converted to a primary residence can only have the capital gains exclusion during the term in which the property was used as a principal residence.11 The capital gains are allocated to the entire period of ownership. While serving as a rental property, the allocated portion falls under nonqualifying use and is not eligible for the exclusion.10
To prevent someone from taking advantage of the 1031 exchange and capital gains exclusion, the American Jobs Creation Act of 2004 stipulates that the exclusion applies if the exchanged property had been held for at least five years after the exchange.12
How Installment Sales Lower Taxes
Realizing a large profit at the sale of an investment is the dream. However, the corresponding tax on the sale may not be. For owners of rental properties and second homes, there is a way to reduce the tax impact. To reduce taxable income, the property owner might choose an installment sale option, in which part of the gain is deferred over time. A specific payment is generated over the term specified in the contract.13
Each payment consists of principal, gain, and interest, with the principal representing the non-taxable cost basis and interest taxed as ordinary income. The fractional portion of the gain will result in a lower tax than the tax on a lump-sum return of gain. How long the property owner held the property will determine how it's taxed: long-term or short-term capital gains.
How Real Estate Taxes Work
Taxes for most purchases are assessed on the price of the item being bought. The same is true for real estate. State and local governments levy real estate or property taxes on real properties; these collected taxes help pay for public services, projects, schools, and more.
Real estate taxes are ad-valorem taxes, which are taxes assessed against the value of the home and the land it sits on. It is not assessed on the cost basis — what was paid for it. The real estate tax is calculated by multiplying the tax rate by the assessed value of the property. Tax rates vary across jurisdictions and can change, as can the assessed value of the property. However, some exemptions and deductions are available for certain situations.
How to Calculate Cost Basis of a Home
The cost basis of a home is what you paid (your cost) for it. Included is the purchase price, certain expenses associated with the home purchase, improvement costs, certain legal fees, and more.
Example: In 2010, Rachel purchased her home for $400,000. She made no improvements and incurred no losses for the ten years she lived there. In 2020, she sold her home for $550,000. Her cost basis was $400,000, and her taxable gain was $150,000. She elected to exclude the capital gains and, as a result, owed no taxes.
What Is Adjusted Home Basis?
The cost basis of a home can change. Reductions in cost basis occur when you receive a return of your cost. For example, you purchased a house for $250,000 and later experienced a loss from a fire. Your home insurer issues a payment of $100,000, reducing your cost basis to $150,000 ($250,000 original cost basis - $100,000 insurance payment).
Improvements that are necessary to maintain the home with no added value, have a useful life of less than one year, or are no longer part of your home will not increase your cost basis.14
Likewise, some events and activities can increase the cost basis. For example, you spend $15,000 to add a bathroom to your home. Your new cost basis will increase by the amount you spent to improve your home.14
Basis When Inheriting a Home
If you inherit a home, the cost basis is the fair market value (FMV) of the property when the original owner died.15 For example, say you are bequeathed a house that the original owner paid $50,000 for. The home was valued at $400,000 at the time of the original owner's death. Six months later, you sell the home for $500,000. The taxable gain is $100,000 ($500,000 sales price - $400,000 cost basis).
The fair market value is determined on the date of the death of the grantor or on the alternate valuation date if the executor files an estate tax return and elects that method.16
Reporting Home Sale Proceeds to the IRS
It is required to report the sale of a home if you received a Form 1099-S reporting the proceeds from the sale or if there is a non-excludable gain. Form 1099-S is an IRS tax form reporting the sale or exchange of real estate. This form is usually issued by the real estate agency, closing company, or mortgagee. If you meet the IRS qualifications for not paying capital gains tax on the sale, inform your real estate professional by Feb. 15 following the year of the transaction.
The IRS details what transactions are not reportable:17
If the sales price is $250,000 ($500,000 for married persons) or less and the gain is fully excludable from gross income. The homeowner must also affirm that they meet the principal residence requirement. The real estate professional must receive certification that these attestations are true.
If the transferor is a corporation, a government or government sector, or an exempt volume transferor (someone who has or will sell 25 or more reportable real estate properties to 25 or more parties)
A transaction to satisfy a collateralized loan
Non-sales, such as gifts
If the total consideration for the transaction is $600 or less, which is called a de minimus transfer
Special Considerations
What happens in the event of a divorce or for military personnel? Fortunately, there are considerations for these situations. In a divorce, the spouse granted ownership of a home can count the years the home was owned by the former spouse to qualify for the use requirement.3 Also, if the grantee has ownership in the house, the use requirement can include the time the former spouse spends living in the home until the date of sale.
Military personnel and certain government officials on official extended duty and their spouses can choose to defer the five-year requirement for up to ten years while on duty. Essentially, as long as the military member occupies the home for 2 out of 15 years, they qualify for the capital gains exclusion (up to $250,000 for single taxpayers and up to $500,000 for married taxpayers filing jointly).18
Capital Gains Taxes on Investment Property
Real estate can be categorized differently. Most commonly, it is categorized as investment or rental property or principal residences. An owner's principal residence is the real estate used as the primary location in which they live. An investment or rental property is real estate purchased or repurposed to generate income or a profit to the owner(s) or investor(s).
How the property is classified affects how it's taxed and what tax deductions, such as mortgage interest deductions, can be claimed. Under the Tax Cuts and Jobs Act of 2017, up to $750,000 of mortgage interest on a principal residence can be deducted. However, if a property is solely used as an investment property, it does not qualify for the capital gains exclusion.19
Deferrals of capital gains tax are allowed for investment properties under the 1031 exchange if the proceeds from the sale are used to purchase a like-kind investment. And capital losses incurred in the tax year can be used to offset capital gains from the sale of investment properties. So, although not afforded the capital gains exclusion, there are ways to reduce or eliminate taxes on capital gains for investment properties.
Rental Property vs. Vacation Home
Rental properties are real estate rented to others to generate income or profits. A vacation home is real estate used recreationally and not considered the principal residence. It is used for short-term stays, primarily for vacations.
Often, homeowners convert their vacation homes to rental properties when not in use by them. The income generated from the rental can cover the mortgage and other maintenance expenses. There are a few things to keep in mind, however. If the vacation home is rented out for less than 15 days, the income is not reportable. If the vacation home is used by the homeowner for less than two weeks in a year and then rented out for the remainder, it is considered an investment property.20
Homeowners can take advantage of the capital gains tax exclusion when selling their vacation home if they meet the IRS ownership and use rules.
Real Estate Taxes vs. Property Taxes
The terms real estate and property are often used interchangeably, as are real estate taxes and property taxes. However, property is actually a broad term used to describe different assets, including real estate, owned by a person; and not all property is taxed the same.
Property taxes, as it relates to real estate, are ad-valorem taxes assessed by the state and local governments where the real property is located. The real estate property tax is calculated by multiplying the property tax rate by real property's market value, which includes the value of the real property (e.g., houses, condos, and buildings) and the land it sits on.
Property taxes, as it relates to personal property, are taxes applied to movable property. Real estate, which is immovable, is not included in personal property tax. Examples of personal property include cars, watercraft, and heavy equipment. Property taxes are applied at the state or local level and may vary state-to-state.
The Bottom Line
Taxes on capital gains can be substantial. Fortunately, the Taxpayer Relief Act of 1997 provides some relief to homeowners who meet certain IRS criteria. For single tax filers, up to $250,000 of the capital gains can be excluded, and for married tax filers filing jointly, up to $500,000 of the capital gains can be excluded. For gains exceeding these thresholds, capital gains rates are applied.1
There are exceptions for certain situations, such as divorce and military deployment, and there are rules for when sales must be reported. Understanding the tax rules and staying abreast of tax changes can help you better prepare for the sale of your home.
Are Home Sales Tax-Free?
Home sales are tax-free if the condition of the sale meets certain criteria. The seller must have owned the home and used it as their principal residence for two out of the last five years (up to the date of closing). The two years must not be consecutive to qualify. The seller must not have sold a home in the last two years and claimed the capital gains tax exclusion. If the gains do not exceed the exclusion threshold ($250,000 for single people and $500,000 for married people filing jointly), the seller does not owe taxes on the sale of their house.1
How Do I Avoid Paying Taxes When I Sell My House?
There are several ways to avoid paying taxes on the sale of your house. Here are a few:
Offset your capital gains with capital losses. Capital losses from previous years can be carried forward to offset gains in future years.
Consider using the IRS primary residence exclusion. For single taxpayers, you may exclude up to $250,000 of the capital gains, and for married taxpayers filing jointly, you may exclude up to $500,000 of the capital gains (certain restrictions apply).1
Also, under a 1031 exchange, you can roll the proceeds from the sale of a rental or investment property into a like investment within 180 days.9
How Much Taxes Do I Pay When Selling My House?
How much taxes you pay is dependent on the amount of the gain from selling your house and your tax bracket. If your profits do not exceed the exclusion amount and you meet the IRS guidelines for claiming the exclusion, you owe nothing. If your profits exceed the exclusion amount and you earn between $40,400 and $441,450, you will owe a 15% tax (based on the single filing status) on the profits.5
Do I Have to Report the Sale of My Home to the IRS?
It is possible that you are not required to report the sale of your home if none of the following are true:3
You have non-excludable, taxable gain from the sale of your home (>$250,000 for single taxpayers and >$500,000 for married taxpayers filing jointly).
You were issued a 1099-S, reporting proceeds from real estate transactions.
You want to report the gain as taxable, even if all or a portion falls within the exclusionary guidelines.
ADVISOR INSIGHT
Kimerly Polak Guerrero, CFP®, RICP®
Polero ICE Advisers, New York, NY
In addition to the $250,000 (or $500,000 for a couple) exemption, you can also subtract your full cost basis in the property from the sales price. Your cost basis is calculated by starting with the price you paid for the home, and then adding purchase expenses (e.g., closing costs, title insurance, and any settlement fees).
To this figure, you can add the cost of any additions and improvements you made that had a useful life of over one year.
Finally, add your selling costs, like real estate agent commissions and attorney fees, as well as any transfer taxes you incurred.
By the time you finish totaling all these costs of buying and selling and improving the property, your capital gain on the sale will likely be much lower, enough to qualify for the exemption.
Tap Into Your Home Equity Without Adding Debt
You can receive up to $400,000 using a smart new loan alternative that lets you access your home equity without any debt, monthly payments, or interest. With a home equity investment from Hometap, you can receive cash in hand in exchange for a percentage of the future value of your home. The process can take as little as three weeks, and you can use the cash however you choose to accomplish the financial goals that matter to you most. Learn more >>
<<<
>>> Israeli firm to sell HSBC Tower in New York for $855 million
MSN Money
By Steven Scheer
https://www.msn.com/en-us/money/companies/israeli-firm-to-sell-hsbc-tower-in-new-york-for-24855-million/ar-AARugTF?ocid=uxbndlbing
JERUSALEM (Reuters) - Israel's Property and Building Corp said on Sunday it agreed to sell the HSBC Tower building in midtown Manhattan for $855 million to New York-based real estate firm Innovo Property Group, recording a net loss of $45 million.
The Israeli company, which is 63% owned by Discount Investment Corp, said it had also sold property in Israel for 390 million shekels ($123 million).
Doron Cohen, chief executive of both Property and Building and Discount, said management was focusing on income-producing properties in Israel and that the amount it was receiving from both transactions would allow it to advance this policy.
"We are continuing the policy and examining the possibility of realising additional properties in the United States and in Israel," Cohen said, noting the sale of the HSBC building came despite "gloomy" predictions over U.S. commercial real estate market.
He cited Tivoli Village, an upscale apartment complex in Las Vegas that opened this year, which may be put up for sale as part of the company's efforts to boost liquidity and reduce debt.
Along with conglomerate Koor Industries, Property and Building, bought the 30-storey, 80,000 square metre HSBC Tower in 2009 for $353 million. In 2011, Property acquired Koor's stake in the tower which has an occupancy of 99%, it said. HSBC had bought the building in the 1990s.
Property and Building said the value of the HSBC Tower in its books was $864 million as of Sept. 30. After costs, it said it would record a net loss of $45 million from the sale.
Completion of the sale is expected by April 1, 2022 subject to Innovo's right to advance the date while also receiving options to postpone the completion twice for 30 days each.
Property said after the sale it will have a net cash flow of $343 million.
Its shares were 0.7% lower in afternoon trading in Tel Aviv.
<<<
>>> Gladstone Land Acquires Farmland in Oregon
Yahoo Finance
November 29, 2021
https://finance.yahoo.com/news/gladstone-land-acquires-farmland-oregon-133000467.html
MCLEAN, VA / ACCESSWIRE / November 29, 2021 / Gladstone Land Corporation (NASDAQ:LAND) ("Gladstone Land") announced that it has acquired 165 gross acres of farmland located near Milton-Freewater, Oregon, for approximately $2.4 million. In connection with the acquisition, Gladstone Land entered into a 10-year, triple-net lease agreement with an existing tenant who is a leader in the wine industry.
"We are excited to make another acquisition in Oregon," said Tony Marci, Managing Director for Gladstone Land. "Our tenant will plant a vineyard on this land, which is located within the Walla Walla Valley AVA. The property is in a beautiful setting on land overlooking the Walla Walla Valley."
"This land, with established water rights, will be a great addition to our portfolio," said David Gladstone, President and CEO of Gladstone Land. "We are pleased to expand the relationship with our tenant and help them to continue providing premium wines to their customers."
About Gladstone Land Corporation:
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 162 farms, comprised of approximately 109,000 acres in 15 different states and 45,000 acre-feet of banked water in California, valued at approximately $1.4 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 10 to 20-plus years and harvested annually. The company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 105 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The company has increased its common distributions 24 times over the prior 27 quarters, and the current per-share distribution on its common stock is $0.0452 per month, or $0.5424 per year. Additional information, including detailed information about each of the company's farms, can be found at www.GladstoneLand.com.
<<<
>>> Gladstone Land Corporation Exceeds $75 Million Raised for Series C Preferred Stock Offering
Yahoo Finance
November 18, 2021
https://finance.yahoo.com/news/gladstone-land-corporation-exceeds-75-210500039.html
MCLEAN, VA / ACCESSWIRE / November 18, 2021 / Gladstone Land Corporation (Nasdaq:LAND) (the "Company") today announced that it has sold over $75,000,000 in its continuous registered public offering of $500,000,000 of its 6.00% Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock") since filing a prospectus supplement on April 3, 2020. The Company's first sale of Series C Preferred Stock occurred on April 8, 2020.
"We launched our Series C Preferred Stock offering in 2020 very soon after closing on $150 million in sales in our Series B Preferred Stock offering. Despite launching near the start of the COVID-19 pandemic, we were very pleased with the pace of sales of our Series C Preferred Stock throughout 2020. Moreover, after hiring our own wholesaling team within Gladstone Securities, our affiliated broker dealer, we have been thrilled with the acceleration of our Series C Preferred Stock sales throughout 2021. We hope to continue increasing our monthly sales in 2022 and beyond, as we have a total offering size of $500 million and a large target market of available farmland in the United States. Since launching the Series B Preferred Stock offering in May of 2018, we've used the Series B and Series C proceeds to grow our farmland portfolio from 79 farms with approximately 65,000 acres worth about $550 million in mid-2018 to 160 farms with over 108,000 acres worth approximately $1.4 billion. Having access to the independent broker dealer and RIA markets has been important to augment our other sources of capital so that we have been able to grow significantly," said David Gladstone, President of Gladstone Land.
The Company expects that the offering of its Series C Preferred Stock will terminate on the date that is the earlier of either June 1, 2025 (unless earlier terminated or extended by the Company's Board of Directors) or the date on which all 20,000,000 shares offered in the Series C Preferred Stock offering are sold (the "Termination Date"). The Company intends to use the net proceeds from the Series C Preferred Stock offering to purchase more farmland and for other general corporate purposes. There is currently no public market for shares of Series C Preferred Stock. The Company intends to apply to list the Series C Preferred Stock on Nasdaq or another national securities exchange within one calendar year of the Termination Date, however, there can be no assurance that a listing will be achieved in such timeframe, or at all.
Gladstone Securities, LLC, a FINRA-member broker-dealer, is acting as dealer manager on this offering.
Investors are advised to carefully consider the investment objectives, risks, charges and expenses of the Company before investing. The prospectus supplement dated April 3, 2020 and the accompanying prospectus dated April 1, 2020, which have been filed with the SEC, contain this and other information about the Company and the Series C Preferred Stock offering and should be read carefully by prospective investors before investing.
The Series C Preferred Stock offering is being conducted as a public offering under the Company's effective shelf registration statement filed on Form S-3 with the U.S. Securities and Exchange Commission (the "SEC") (File No. 333-236943). The Company has filed a registration statement (including a prospectus) and a prospectus supplement with the SEC for the Series C Preferred Stock offering. Before you invest, you should read the prospectus in that registration statement, the prospectus supplement and other documents that the Company has filed with the SEC for more complete information about the Company and the Series C Preferred Stock offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, Gladstone Securities, the Company's dealer manager for the Series C Preferred Stock offering, will arrange to send you the prospectus and prospectus supplement if you request it by calling toll-free at (833) 849-5993 or email info@gladstonesecurities.com.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About Gladstone Land Corporation:
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that owns farmland and farm-related properties located in major agricultural markets across the U.S. and leases its properties to unrelated third-party farmers. The Company reports the fair value of its farms on a quarterly basis. The Company currently owns 160 farms, comprised of over 108,000 acres in 14 different states, valued at approximately $1.4 billion. The farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, figs, olives, pistachios, and other orchards, as well as groves of blueberries and vineyards, which are generally planted every 10 to 20-plus years and harvested annually. The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. The Company pays monthly distributions to its stockholders and has paid 105 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The current per-share distribution on its common stock is $0.0452 per month, or $0.5424 per year. Additional information, including detailed information about each of the Company's farms, can be found at www.GladstoneFarms.com.
<<<
>>> American Tower (AMT) Announces Deal to Buy CoreSite for $10.1B
Zacks Equity Research
November 16, 2021
https://finance.yahoo.com/news/american-tower-amt-announces-deal-135801583.html
American Tower Corporation AMT has entered into a definitive agreement to acquire CoreSite Realty Corporation COR for roughly $10.1 billion. The combined company will cater to the growing need for convergence between mobile network providers, cloud service providers, and other digital platforms amid accelerating global 5G deployments.
The data center management company, CoreSite, consists of 25 data centers, 21 cloud on-ramps and more than 32,000 interconnections in eight major U.S. markets. As of Sep 30, 2021, CoreSite generated annualized revenues and adjusted EBITDA of $655 million and $343 million, respectively. Hence, the property buyout is likely to increase American Tower’s scale.
Moreover, with the addition of CoreSite’s data and cloud management capabilities to its mobile edge compute business American Tower will be able to offer a huge variety of 5G and cloud solutions.
Per management, “We expect the combination of our leading global distributed real estate portfolio and CoreSite’s high quality, interconnection-focused data center business to help position American Tower to lead in the 5G world.”
The transaction, expected to close by the end of this year, will likely be accretive to American Tower’s adjusted funds from operations (AFFO) per share and be increasingly accretive over time.
This marks American Tower’s second acquisition deal this year. Previously, AMT agreed to acquire Telxius Towers for $9.4 billion in cash in January. In June, it closed the first tranche of this previously announced acquisition, which comprised roughly 20,000 communications sites in Germany and Spain.
Shares of this Zacks Rank #3 (Hold) company have appreciated 5.9% compared with its industry's 10.9% growth, in the past six months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, tenant concentration is very high for American Tower. In fact, of its top three customers, Verizon VZ and AT&T T accounted for majority of the company’s total revenues.
Hence, loss of either Verizon or AT&T, consolidation among them, or reduction in network spending will significantly hamper American Tower’s top line.
<<<
>>> Gladstone Land Corporation (LAND) Q3 2021 Earnings Call Transcript
LAND earnings call for the period ending September 30, 2021.
Motley Fool
Gladstone Land Corporation (NASDAQ:LAND)
Q3 2021 Earnings Call
Nov 10, 2021, 8:30 a.m. ET
https://www.fool.com/earnings/call-transcripts/2021/11/10/gladstone-land-corporation-land-q3-2021-earnings-c/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Greetings, and welcome to Gladstone Land Third Quarter Earnings Call. [Operator Instructions]. A question-and-answer session will follow the formal presentation. [Operator Instructions].
I would now like to turn the conference over to your host, David Gladstone, Chief Executive Officer and President. Thank you. You may begin.
David J. Gladstone -- Chairman, Chief Executive Officer and President
Well, thank you for that nice introduction. This is David Gladstone, and welcome to the quarterly conference call for Gladstone Land. And again, thank you all for calling in today. We appreciate you take time out of your day to listen to our presentation. We're first going to start with Erich. Erich Hellmold is in the office today for Michael LiCalsi. Erich is our Deputy General Counsel, and he is also the -- one of the big guns in administration side of our business and that's the administrator for all the Gladstone funds. Erich, why don't you start?
Erich Hellmold -- Deputy General Counsel
Thanks, David, and good morning. Today's report may include forward-looking statements under the Securities Act of 1933 and the Securities Exchange Act of 1934, including those regarding our future performance. These forward-looking statements involve certain risks and uncertainties that are based upon our current plans, which we believe to be reasonable.
Many factors may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements, including all risk factors in our Forms 10-K and other documents we file with the SEC. Those can be found on our website, www.gladstoneland.com, specifically the Investor's page or on the SEC's website at www.sec.gov. We undertake no obligation to publicly update or revise any of these forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
Today we will discuss FFO, which is Funds From Operations. FFO is a non-GAAP accounting term defined as net income excluding the gains or losses from the sale of real estate and any impairment losses from property, plus depreciation and amortization of real estate assets. We will also discuss core FFO, which we generally define as FFO adjusted for certain non-recurring revenues and expenses, and adjusted FFO which further adjusts core FFO for certain non-cash items, such as converting GAAP rents to normalized cash rents. We believe these are better indications of our operating results and allow better comparability of our period-over-period performance.
Please take the opportunity to visit our website, www.gladstoneland.com, and sign up for our email notification service, so you can stay up to date on the Company. You can also find us on Facebook, keyword-The Gladstone Companies, and we have our own Twitter handle @GladstoneComps.
Today's call is an overview of our results, so we ask you to review our press release and Form 10-Q, both issued yesterday for more detailed information. Again, those can be found on the Investors page of our website.
Now, I'll turn the presentation back to David Gladstone.
David J. Gladstone -- Chairman, Chief Executive Officer and President
All right. Thank you, Erich. I always start with a brief recap of the current farmland holdings. We currently own about 108,000 acres on 160 farms and about 45,000 acre-feet of banked water. All those together total about $1.4 billion in assets that we own. Our farms are located in 14 different states, and more importantly in 28 different growing regions, and our farms continue to be 100% occupied and are leased to 82 different tenant farmers, all of whom are unrelated to us. And the tenants on these farms are growing over 60 different types of crops.
Given the number of different growing regions, tenants, types of crops, our farms -- on our farms, we think this is sufficient diversification to provide for safety and security of the cash flows coming from the rents. And we believe this diversification helps protect the dividends that we're paying to our preferred as well as our common shareholders. There are no guarantees in this world, anything can happen in this life. But right now, we're feeling pretty good about getting the money in from rents and paying it out as dividends.
We had another strong quarter from the acquisition standpoint and we continued to see a decent number of buying opportunities come our way. And in the fourth quarter, we've gotten off to a nice start. We still have a few farms that we're working on to close before the end of the year. Hopefully, we'll get them all done. It has been kind of a slow year in terms of the pandemic has kept people out of the office and that always slows things down.
We continue to be able to renew all the expiring leases without incurring any downtime on any of our farms and notable increase in these renewals reflects the positive trends in all the rental rates that we're currently seeing in many regions.
Overall operations on our farms remained strong and demand for products that are grown in most of our farms remains relatively strong. And these are products like berries and vegetables and nuts. And as anybody who goes to the grocery store these days, tell you, there are many of these types of food that continue to increase in price and that's good for our farmers and good for us long-term.
During the third quarter, the team acquired five farms, 5,000 acre-feet of banked water for total price of about $62 million. In addition, right after the quarter-end, we acquired two more farms, approximately 2,000 more acre-feet of banked water or total about $46 million. So we have new investments of about $108,000 -- $108 million from last time.
Overall, initial net cash yield to us on these are about 5.5%. In addition, all the leases on these farms contain certain provisions such as participation rents or annual escalations that should push that figure higher as we go forward in the future. As a reminder, this banked water is water that we own, but is stored in a local water district. We can use the water that's in these districts on the farmland located in Kern County that sub-basin where the water is, where we have several farms and we can sell it to a third-party, or we can use it on our farms.
Our plan is to hold the water to keep as a safeguard for our own assets in the region. Currently, we are not using any of it. We're using the water that we have from the wells that we have on the farms in the past. They say they have not used any of it, they kept buying a little bit. So when it came time to sell, they wanted to sell us the same insurance for water that we have in these wells. All of our farms currently have enough water, but we like the security of having extra water.
On the leasing front, since the beginning of the third quarter, we executed ten lease renewals on properties located in California, Colorado, Florida and Michigan.
Overall, these lease renewals are expected to result in an increase in annual net operating income of about $227,000 or about 8% over the prior leases that we had. Looking ahead, we only have three leases scheduled to expire in the next six months that make up less than 2% of our total annualized lease revenue. We are in discussion with the existing tenants on these farms, as well as some potential new tenants and we aren't expecting any downturn -- downtime on these farms.
Overall, we continue to expect the new leases on these farms to be relatively flat from where they are today. There are few other items I'd like to touch on before we move on. The first one is going -- the ongoing drought in the West, despite some recent record-breaking rainfall parts of California. Certainly in Oregon and Washington, they've gotten a good amount of water down on the farms, but they also have gotten many feet of snow in the mountains, and when that snow melts, it feeds all the farms in the valley. However, all our properties continued to be in a position where there is currently ample water to complete both the current crop and next year's crop. Where we have farms located in water districts, those districts have stored water or other supplemental sources that cover our farms for the short-term.
Almost all of the farms out West have well sites and most of them rely on groundwater as their main source of the irrigation. For these properties, we are seeing a typical seasonal dropping of the water table levels, and we haven't had any, of course, that have gone dry. And all of our farms currently have pumping capacity to cover their crop needs.
One thing you should know is that wet and dry weather cycles are the norm out West. Those of you here in the Midwest or in the South, this is something that you would know how to handle most likely, but it's very difficult in the West, especially California. Throughout any long-term investment, we know that we're going to have both drought periods and wet periods. So when we underwrite a potential investment out West, we look for properties with multiple sources of water, we build in drought scenarios in our projections, and we also take into account potential government regulations because sometimes they just come in and say we'd like you to pump 25% less water out of the ground. We've done that and we've done a good job keeping the government happy with our water.
We continue to expect a strong year in terms of participation rents. I think this will be the largest year we've ever had. You know, we recorded about $2.4 million in participation rents each of the past two years and we are expecting a sizable increase in that amount for 2021. No guarantees, but that's what we're projecting right now. And this is mainly due to having several more farms with participation rents this year. We recorded about $1.8 million of participation rents so far through the third quarter. People have begun to pay and give us good projection, so we're bringing in that money now.
Regarding the progress on our ESG policy, we continue to work on developing a formal policy related to disclosures that we continue to think are relevant and we will continue to update you on this as we get closer to finalizing these policies. One of our problems on ESG is just finding someone who can identify and say we've done it correctly. There is a lot of fighting on Europe over what constitutes some of the ESG policies.
Finally, I want to again briefly mention that Gladstone Acquisition, it's our SPAC that recently filed and reiterate the relationship to Gladstone Land. It has a little over $100 million in cash in it now. And as mentioned in previous calls, we sometimes come across farm owners who don't want to sell just their land, they want to sell both their farmland and their operations as a package deal.
As you know, a REIT like Gladstone Land is limited in the ability to own operating companies because operating income is generally not permitted in a Real Estate Investment Trust. So Gladstone Acquisition was created to potentially take advantage of such opportunities. We're looking at a couple now, we've not signed anything, and so, there has been no press releases on it, but stay tuned, you'll hear what we do there.
I'm going to stop at this point on operations. I'll turn it over to our Chief Financial Officer, Lewis Parrish, to talk to you more about the numbers that he published last night.
Lewis Parrish -- Chief Financial Officer and Assistant Treasurer
Thank you, Dave, and good morning, everyone.
I'll begin with our balance sheet. During the third quarter our total assets increased by about $60 million, due to new acquisitions which were financed with a mix of debt and equity proceeds. During the quarter, we secured about $31 million of new long-term borrowings at a weighted average rate of 2.75%, which is fixed for the next ten years.
On the equity side, since the beginning of the third quarter, we've raised about $86 million of net proceeds through sales of our common stock under the ATM Program, representing a net cost of capital of 2.35% with our recently increased dividend. And over the same time period, we've also raised about $22 million of net proceeds from sales of the Series C Preferred Stock.
Moving on to our operating results, first, I'll note that for the third quarter we had net income of about $1.5 million and a net loss to common shareholders of $1.6 million or $0.052 per common share. On a quarter-over-quarter basis, adjusted FFO for the third quarter was approximately $5.3 million compared to $3.7 million in the second quarter, an increase of about 41%. AFFO per share was $0.166 in the third quarter versus $0.126 in the second quarter, an increase of 32%. Dividends declared per share were about $0.135 in each quarter. The primary driver behind the increase in AFFO was additional participation rent recorded. This was partially offset by incentive fee earned by advisor during the current quarter.
During the third quarter, we recorded about $1.8 million of participation rents versus only $19,000 in the previous quarter. Fixed base cash rents increased by about $1 million or 6% on a quarter-over-quarter basis, primarily driven by additional revenue earned from recent acquisitions.
On the expense side, excluding reimbursable expenses and certain non-recurring or non-cash expenses, our core operating expenses increased by about $1.1 million, which is driven by higher related party fees. The quarter-over-quarter increase in related party fees is reflective of a higher rate used to determine the base management fee rate, which became effective from July 1 and includes an incentive fee of $945,000 earned by our advisor during the current quarter versus none earned in the prior quarter.
Removing related party fees, our core operating expenses decreased by about $250,000. This decrease was primarily driven by lower property operating expenses, which was largely due to less water costs incurred in one of our properties in Colorado and reduced annual filing fees as well as a decrease in our general and administrative expenses due to the additional costs incurred in the prior quarter related to our annual shareholders meeting.
Regarding the additional water costs in Colorado, the impact on the current quarter's numbers was about $260,000 or $0.01 per share, down from about $350,000 in the prior quarter. We currently anticipate incurring an additional $100,000 to $150,000 during the fourth quarter for these water costs, but we do not currently anticipate continuing to incur these costs beyond 2021.
Moving on to net asset value, we had 37 farms revalued during the quarter, all via third-party appraisals except for three farms that we revalued internally. Overall, these farms increased in value by about $2 million over their previous valuations from a year ago. So as of September 30, our portfolio was valued at just over $1.3 billion all of which was supported by third-party appraisals or the actual purchase prices.
And based on these updated valuations and including the fair value of our debt and all preferred stock, our net asset value per common share at September 30 was $13.80, which is up by $0.64 from last quarter.
Turning to our capital makeup and overall liquidity, from a leverage standpoint and with respect to our borrowings, our loan-to-value ratio on our total farmland holdings on a fair value basis and net of cash was about 44% at September 30. Over 99% of our borrowings are currently at fixed rates, and on a weighted average basis, these rates are fixed at 3.35% for another six years out. So we believe we are currently well protected on the debt side against any future interest rate volatility. In addition, the weighted average maturity of these borrowings is about ten years out.
Regarding upcoming debt maturities, we have about $43 million coming due over the next 12 months. However, about $27 million of that represents maturities of eight loans coming due. The eight properties collateralizing these loans have increased in value by a total of $14 million since their respective acquisitions. So we do not foresee any problems refinancing any of these loans if and when we choose to do so.
So removing these maturities, we only have about $16 million of amortizing principal payments coming due over the next 12 months, or about 2% of our total debt outstanding. From a liquidity standpoint, including availability on our lines of credit and other undrawn notes, we currently have over $125 million of dry powder, in addition to over $100 million of unpledged properties. We have ample availability under our two largest borrowing facilities and we continue to be in discussions with these and other lenders for new borrowings and credit facilities. But overall, credit continues to be readily available to us from multiple vendors and at very favorable terms.
Finally, I will touch on our common distributions. We recently raised our common dividend again to $0.0452 per share per month. Over the past 27 quarters, we've raised our dividend -- our common dividend 24 times resulting in an overall increase of 50.7% in our monthly common distributions over this time. Since 2013, we've paid 105 consecutive monthly dividends to common shareholders totaling $5.39 per share in total distributions. Paying dividends to our shareholders is paramount to our business plan and our goal is to continue to increase the dividend at regular intervals.
When considering the relative stability and security of the underlying assets and the related cash flows, we believe the stock continues to offer a compelling investment alternative especially in light of today's inflationary concerns.
And with that, I'll turn the program back over to David.
David J. Gladstone -- Chairman, Chief Executive Officer and President
All right. Thank you, Lewis. That's a nice report and Erich gave us a nice introduction. So we're gliding along here. Acquisition activity remains good for us. We continue to see buying opportunities, we continue to make offers, we sign up people and get them into a position that we can go forward and close -- little bit slow in the marketplace out there simply because people are still reacting to the COVID-19.
Just a few final points before -- that I'd like to make before we move too far on. We believe that investing in farmland, growing crops that contribute to healthy lifestyle such as fruits and vegetables and nuts is following the trend that we're seeing in the marketplace today. Currently, about 85% of our total crop revenues come from farms growing the types of food that you'd find in either the produce section or the nut section of your local grocery store.
So if you want to see what we grow, just go to the grocery store and you will see it. We consider these foods to be among the healthiest type foods, and we continue to see a growing trend toward organic among these food groups. About 40% of our fresh produce acreage is either organic or transitioning to become organic and about 15% of the permanent crop acreage falls into this organic category.
We believe the organic sector would continue to be strong -- as very strong growth area. And in addition, more than 95% of the crops that are grown on our farmland is classified as being non-GMO.
Another major reason our business strategy is to focus on farmland growing fresh produce is due to the effect of inflation on the particular segment. According to the Bureau of Labor -- the Bureau of Labor, the overall annual food CPI generally keeps pace with inflation. This is why so many financial advisors tell their clients to invest in farmland because it acts as the hedge against inflation. However, over the 40-plus years, the fresh fruit and vegetable segment of the food category has outpaced total food CPI by a multiple of 1.5 times. And this is a large reason why we like being in this segment as well.
And while prices of commodity grain crops such as corn and wheat are typically more volatile and susceptible to global supply and demand, fresh produce is mostly insulated from global volatility mainly because the crops are generally consumed locally and within a short time after harvest. You've got about 14 days to get a strawberry off the vine and into somebody's mouth before it goes bad.
I'm telling you this because we are often confused with owning farms where farmers grow corn, soy, wheat and we have mostly stayed clear of these crops because we have to compete, they have to compete with other countries like Brazil, Argentina, the Ukraine, where cost of production, even after shipping cost, is very low. And those farmers can undercut the prices of grain farmers in the US. This year, grain prices have been much higher in the United States. But one reason and that's because Brazil and Argentina are in a very difficult drought situation. Farms in these countries, largely depend on rain for water.
So overall demand for prime farmland growing berries and vegetables remains stable to strong in almost all of the areas where our farms are located, particularly along the West Coast, including most of California, Oregon and Washington. And not to forget East Coast especially Florida and some of the other states on the East Coast, everything is going along at a good pace. And overall, farmland continues to perform well compared to other assets. There is an association called NCREIF and it has a farmland index and is currently made up of about $13.2 billion worth of agricultural properties including all of ours and that's averaged return of about 12.3% over the last 20 years compared to 11% for the overall REIT index and lower for the S&P index.
And during those 20 years, the Farmland Index has not had a single negative year yield, whereas the REIT Index and the S&P Index have had four negative years over that same period. Farmland has generally provided investors with a safe haven during turbulent times and in financial marketplaces as both land prices and food prices, especially for fresh produce have continued to rise steadily.
So just in closing, please remember that purchasing stock in this Company is a long-term investment in farmland. I think, an investment in our stock really has two parts. It's similar to gold in the sense that it's a hard asset, farmland or dirt, and it's the good farmland that can grow food. It has an intrinsic value because there's a limited amount of good farmland and it's being used up by urban development especially in California and Florida, where we have many farms.
Second, I'd like to compare gold and other alternative assets because it's better than those because it's an active investment with cash flows to investors. And we believe that's better than a bond fund because we keep increasing the dividend. We expect inflation, particularly in the food sector to increase and increase to values that pump up the value of underlying farmland to increase as a result. And we expect this especially be true of fresh produce food sector, the trends are more people in the US are eating healthy foods continuing to grow such products for distribution through.
And Gladstone Land would not be anything without the good people we have operating and managing it. Buying and leasing farmland is a complex business. So if you like, what we're doing, please buy some stock and keep eating fresh fruits and vegetables and nuts.
Now we will stop and have some questions from those who follow us. Operator, would you please come on and tell these people how they can ask us some questions?
Questions and Answers:
Operator
Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions]. Our first question comes from Rob Stevenson with Janney. Please proceed.
Robert Stevenson -- Janney Montgomery Scott LLC -- Analyst
Good morning. David, where is pricing for farmland today versus a couple of years ago pre-pandemic? When you look at similar properties, are we up 5%, 10% flattish? How do you sort of characterize it across your various sort of property types and markets?
David J. Gladstone -- Chairman, Chief Executive Officer and President
Yeah. If you're looking at the Midwest, which is most often the one that's published, it's gone up pretty substantially this year simply because people are making money. They're also buying lots of tractors and those kind of equipment. In the areas that we're in, there has been sort of a steady increase over the last ten years and certainly over the last three or four years as people have realized that there is other things, other than corn and wheat that are growing. And I would say, there has been a good 15% increase over the last three years.
Robert Stevenson -- Janney Montgomery Scott LLC -- Analyst
Okay. And then given how hot the housing market is, have you guys thought about selling some of your land to homebuilders in some markets where it's bumping up against the farms?
David J. Gladstone -- Chairman, Chief Executive Officer and President
We have a few farms that are inside of the areas like, in California, you can't just sell your land to a developer and the developer goes off and builds where he wants to on it. In California, you need to get the local city -- you have to be inside the city districts. So if you're in Watsonville, you need to be inside of the town limits for Watsonville, and then the local government officials can make that decision.
If you're outside of that, you have to put it on the ballot for voting. And if you've ever seen a ballot for California, they are about four-feet long. There are really a lot of things on those ballots. And one of those would be I want to take that lot that's right next to the -- right next to this one or that one and build houses on it. And they always get shot down. Californians are not interested in building more houses. And so, you have California pushing now to take neighborhoods and tear down the houses and build apartment buildings or condos, something in order to increase the net amount of land that's being used for that.
And it's really rough in California. They're probably 15% under house built or places to live and they just can't seem to get out of their own way in terms of regulations. And I know a lot of farms will be there. We have one right inside of Watsonville. It's a small, mostly blueberries, no mostly strawberries in that. And I think some day someone will show up and want to buy that. But that's not going to be a big hit, it's going to be a nice hit. But they haven't shown up yet. And one reason is quite frankly the strawberry fields are in an area that is not the best part of town. So as a result, they have a lot of old houses around it and they haven't done much changes. And unlike a lot of cities in California, there's not a lot of people moving to Watsonville. So as a result, we haven't had the pressures that you'd have if we were next to Los Angeles or San Francisco or even some of the other large cities.
So I would say, one day someone will show up in one of our big farm, which is -- it's probably 500 acres, and it's right next to the ocean. And somebody is going to be able to get that through and build on it because it's an hour and 20 minutes to LAX, and that's going to be a big one. We paid about $25,000 in total for everything on that farm. It's probably worth $80,000 an acre today. And if you could zone it, it would be worth $1.5 million an acre if you could put townhouses on it.
So, yes, someday all you lucky people after I'm gone are going to enjoy the benefits of us selling some of these farms. Right now, we're not interested in selling anything. What we want to do is build an incredible Company with lots of farms and try to catch up with some of the other big farmers in the United States.
As you well know, there is a man that is in the -- really not in the business anymore, but he is buying up a lot of land around the country. He has got about 230,000 acres and he is the largest farmer and we need to catch him. It's going to be a while because there is issues in tax-free dollars to buy farms. But I think we are in good shape, Rob, and I think we're just going to continue doing the same thing every day for the next ten years until we get a really big farming operation going.
Robert Stevenson -- Janney Montgomery Scott LLC -- Analyst
Okay. And then last one from me. The acquisition vehicle, I mean, are the opportunities which you're looking at there going to be too big for taxable REIT subsidiary? Is that the reason why you're going that route rather than just putting any of the operations into a taxable REIT subsidiary for the time being?
David J. Gladstone -- Chairman, Chief Executive Officer and President
Yeah. They are too big and they would overshadow everything. And as you know, if we bust that regulation, we are out of the REIT business for five years. So I don't want to break it in. So that's why we're there and we keep getting these opportunities showing up and saying we'd like to sell the whole thing, and we say, well, hang on, as soon as we get public, we will be able to distribute some of the $100 million that we have in that SPAC, and also give you some publicly traded stock. We are working on some now. We've got some in here. And when is our acquisition call? Did we have a date? Anybody know?
Lewis Parrish -- Chief Financial Officer and Assistant Treasurer
We don't yet.
David J. Gladstone -- Chairman, Chief Executive Officer and President
We don't have a date yet. Okay. I know he's filing next week. Is it...?
Erich Hellmold -- Deputy General Counsel
Isn't it filed?
David J. Gladstone -- Chairman, Chief Executive Officer and President
No.
Lewis Parrish -- Chief Financial Officer and Assistant Treasurer
It hasn't been.
David J. Gladstone -- Chairman, Chief Executive Officer and President
It's the case, so it will happen soon. You'll get a copy of it obviously, Rob, and maybe by then, we'll have something little more firmed up. I don't think it's going to be a problem finding things to buy. We've seen a lot of those. And what we want to do is buy several relatively large ones and start out as a diversified group rather than one that just does one thing and then continue to buy smaller farms and operations and have a good operating team. We don't have an operating team now. We'd have to tap one of our tenants to do some of that. But I don't -- I don't know how all of that's going to work out until we buy the first couple of farms.
Robert Stevenson -- Janney Montgomery Scott LLC -- Analyst
Okay. Thanks, David. Guys, I appreciate it.
David J. Gladstone -- Chairman, Chief Executive Officer and President
Okay. Next question?
Operator
Our next question comes from Eddie Reilly with EF Hutton. Please proceed.
Eddie Reilly -- EF Hutton -- Analyst
Hey guys, congrats on a strong quarter. It's like this is the second quarter on a row where our lease renewals will contribute over 10% in growth in net operating income. Is this more indicative of the individual farms whose leases were renewed? Or is this indicative of the general environment we're in, in terms of inflation you think?
Lewis Parrish -- Chief Financial Officer and Assistant Treasurer
We think it's a little bit of both. I mean, obviously there are certain pockets in the country where if we were renewing leases in those regions, it might be a more muted increase or maybe even flat. But with a couple of the farms that we've negotiated, where those negotiations have taken place, in Northern California, Michigan, parts of -- some parts of Florida, Midwest and that's where we're seeing rents in those particular areas are increasing slightly, particularly in the Midwest as David mentioned, with the commodity prices this year. But Florida has been a pretty strong market consistently, Central and Northern California has -- Southern California cap rates have compressed a little bit there, but none of our lease renewals have been in that area lately. So it's a little bit of both.
Eddie Reilly -- EF Hutton -- Analyst
Got you, got you. And where are most of the lease renewals say in upcoming year taking place?
David J. Gladstone -- Chairman, Chief Executive Officer and President
In the rest of 2021, it's just one farm. We have three leases in '21 that are expiring over the next -- well I guess, actually over the next six months, three leases, but two of them are tenant termination options that are exercisable within the next five days. We do not believe the tenants want to exercise the option on either one of those. So it's really just one renewal that we're working on. And it's on a farm in Colorado that we're close to finalizing negotiations with a tenant. The gross rent is likely to remain flat. But we are expecting a significant decrease in the amount of operating expenses we will be on the hook for. So we would expect hopefully an increase in NOI for us there.
Eddie Reilly -- EF Hutton -- Analyst
Got it, got it. Turning to the financing, it seems like you guys have a pretty healthy loan-to-value ratio right now. Can you just talk a little bit about your plan of action for funding new deals going forward?
David J. Gladstone -- Chairman, Chief Executive Officer and President
Well, we have three ways of generating funds for that. One, of course, we've touched on and that's the borrowing. There are lots of lenders in the agricultural space. In the US, we have -- I think, there's five federal large banks that do lending and we've used them pretty much every time. We also have a couple of large institutions. Rabobank is the largest in the world in terms of agricultural lending. We've done a little bit with them, but not a lot. And in addition to that, we've got -- MetLife is the largest lender in the United States and we've done deals with them.
So there is plenty of leverage, and it doesn't seem to be impacted by banks that might have problems. So we're in good shape there. We also sell some preferred stock. We've got a number of those outstanding and we participate by selling non-traded preferred. That's more expensive. It's about 6%, but we use it when we need a little extra leverage. So it's that kind of situation.
And quite frankly, the ATM Program has been very strong. What have you got from that?
Lewis Parrish -- Chief Financial Officer and Assistant Treasurer
We've got about $86 million over the past four months or so.
David J. Gladstone -- Chairman, Chief Executive Officer and President
So we've been selling stock through that ATM Program and using it to buy farms that are generating 5%, 6%. And so after leverage, we've got a good ratio. And the nice thing about leverage is that it doesn't go up until the end of it, and we've got long-term mortgages on these things. So as a result, the spread is sort of locked in for years and years and years. And so for us, the next movement for us is going to be to raise money in some other way. And I don't have any other way right now. But all of those that I mentioned are just wonderful places to get leverage now. That's going to change over time and that will reduce how much we can pay for a farm. And all of these farmers know that. So we've had good transaction with them. And as you probably know, we do from time to time have people that will take UPREIT shares that is -- and that's a non-taxable transaction whereby we give them shares of our stock and they give us their farm and it's quite nice for them and for us, because that's another way of raising equity. So we are in good shape on the financial side. We don't see any problems unless something blows up and I don't see that happening in the economy right now.
Eddie Reilly -- EF Hutton -- Analyst
Got you. Thank you.
Lewis Parrish -- Chief Financial Officer and Assistant Treasurer
And I will add regarding the use of some of the sources that David mentioned, in the past where we would almost always get a loan simultaneously with the acquisition, with all the equity proceeds that we've been able to bring in. What we've been doing and what we probably will continue to do is buy these farms with equity proceeds and then close on a loan, but not draw it until later. We want to close on it now because interest rates are very attractive. As we said earlier, we got 2.75% fixed debt for next ten years this quarter, but we want to lock in these rates, but not drawn them yet until late down the road when we actually need the additional proceeds.
Eddie Reilly -- EF Hutton -- Analyst
Okay, great. That makes sense. Thank you, guys.
David J. Gladstone -- Chairman, Chief Executive Officer and President
Other questions?
Operator
Our next question comes from Eric Borden with Berenberg Capital. Please proceed.
Eric Borden -- Berenberg Capital -- Analyst
Hey, guys, good morning.
David J. Gladstone -- Chairman, Chief Executive Officer and President
Good morning.
Eric Borden -- Berenberg Capital -- Analyst
Kind of -- can you talk about the volumes in the quarter? What was the mix in terms of deal size there? And then kind of maybe going forward given your favorable cost of capital, what's the appetite to target larger deals or maybe portfolios out there in terms of farmland?
David J. Gladstone -- Chairman, Chief Executive Officer and President
Yeah, there are not that many that come up with big farms, other than the fact that the farms continue to go up in price in some areas. So I think we'd love to get some big farms, 5,000 acres would be great. We can find acreage here and there and everywhere. We also want diversification. So getting one huge farm like we have in Southern California. There are not that many people that can lease it. We've leased it to one of the largest strawberry operators in the country. And they are strong, big and lots of cash flow. So we like that.
But to get to these much larger farms, there aren't that many farmers that can take down that much. So we have to be very careful not to get in a vine whereby we have a large farm, we don't have a tenant. So we like the onesie, twosies. There not a lot of players there. And that's our forte as being able to negotiate those and offer the seller a good price for the farm, but also tax-free if they want to do the right transaction. So we'll keep doing what we're doing and the diversification is really important for me. I don't want to get into a situation where we've got a couple of big farms that are going to hurt us.
Eric Borden -- Berenberg Capital -- Analyst
No, I appreciate that. And then maybe on the acquisition front, kind of historically Q4 seems to be the key time to acquire farms, but given constraints as it relates to COVID, do you think you'll see more farmers come to market in Q1 or will there be some rollover there into the New Year?
David J. Gladstone -- Chairman, Chief Executive Officer and President
Probably, I would guess. We never know if they're going to be able to close on time. We had one situation in which after the review of everything, we found that we were about a half a acre or maybe it was more on somebody else's farm that we were -- that the farmer was farming, and we had to get that undone before we close. And of course that's got to go through the government in California. So that's always a pain. Not that they're bad people, it's just that COVID has messed up their scheduling. And so as a result, we get -- we don't get really quick response on that. So you sit for a while waiting for it to close.
I think the bottom line, Eric, is that we are known in the marketplace now. We were not known five years ago very much. And so now everybody knows who we are, that's going to sell our farm, and so they show up on our doorstep. And we are just sitting there working with them, trying to get them to move to a point where we can get the deal done.
And unfortunately a lot of these farms are tied up in history that is it's been in the family for five, six generations. And there is a lot of emotional in the sale of that. It just is one of those things that it's been in our family for six generations or three generations, whatever it is and they don't want to let it go for what it's really worth to somebody who's farming it. And while we can always agree to look at somebody doing -- some third-party doing the review, it doesn't mean you're going to get the farm just because you got the review at the [Technical Issues] there is a lot of things bundled up into that.
There is a lot of farms out there in California. It's massive in terms of the areas that we like which is berries and most of the nut trees are out there. Certainly, almonds and pistachios, and we've picked up a lot of pistachio farms because there weren't a lot of people buying those, and it's a wonderful product. So, I don't know, acquisitions are going to go at the pace that people want us -- want to go. And I know, I talked to a guy ten years ago, trying to buy his farm, and unfortunately for him, he died and we bought it from his sister, who inherited that and she didn't have the same emotional impact and that went back to 1938, where they sold off the oil and gas underneath the farm. And so it was a little bit different transaction.
I just think there is the time when people decide to sell. The pandemic pushed some people along. Others once you talk to them and say, look you're 65 years old, do you have a plan for your farm? And they don't usually. So we show them how they can do it. We talk with some of the people that advise farmers on what to do and they see the non-taxable way of going, and here's the difference between that program that we have, is that farms that might be 200 or 300 acres are broken into maybe six or eight different tax districts. And so as a result, each one of those taxable pieces is considered a farm by the IRS, and so they can sell us three or four of those and take cash, and sell the other two or three in the form of cash, non-cash and be a shareholder.
We've had a number of those, where they want to take some cash out. And this is one of the only places that I know that works like that because if you're buying a warehouse some place, it's one unit. And so you've got to be very careful how you do that, because I think there is only a 10% amount that you can pay in cash, if the other part of it is in non-taxable.
The pressure that's been put on the marketplace by the reduction in 1031's value, because the government has changed the way that works, has been good for us. And I think we'll see more of that as time goes on. Anyway, if you talk to some of these advisors, farmland is where you want to be, but having a whole lot of money tied up in one farm is not where you want to be, as there's little -- only a few things you can do with it.
The other question?
Eric Borden -- Berenberg Capital -- Analyst
Yeah. Last one for me and then -- kind of relates to potential development opportunities. I know in the past you kind of talked about potential deforestation around the farmlands, certain farms, and I was just curious, is that potential -- does that arable land give you an opportunity to increase the acreage per farm or is that really not how I should be thinking about it?
David J. Gladstone -- Chairman, Chief Executive Officer and President
Probably not the way to think about it, only because the deforestation is up in the mountains and we don't grow anything in the mountains. So we're not part of that whole problem. And it's really sad people have burned down houses and a lot of trees have been lost that were up in the mountains. But at the end of the day, problem for us is we just need good flat farmland and that's what we're looking forward.
So I think from our standpoint, you shouldn't look at it that way, you should consider it, gee, they've got some farmland, the farmer is going to sell it. If you sometimes have taken a small plane from Watsonville down to Oxnard, the two small airports you can go through, and as you fly over that part of the world, it's just everything is in farmland that isn't in houses. And so over time, there is no doubt in my mind that over time those places will go away.
There used to be -- in Watsonville, there was a company that you probably know, it's that sparkling apple juice, and a lot of non-alcoholic drinkers drink that in place of champagne. And they've been around forever and a day, and all of that farmland that we farm there in Watsonville plus thousands of other acres used to be, filled with apple trees. And those all got chopped down and put into berries and some of the other ground crops because it was much more profitable. And they now get a lot of their apples from up in the mountains of Washington and maybe some of the other apple tree makers. And so it's just a changing thing that goes on almost every day out there. And we are seeing more and more people needing place to live. And so it's going to continue with pressure on all of those places.
So, I don't know, Eric, we just are following huge transition in land from agricultural to places to live. It won't happen in my lifetime completely, but I'd say 50 years, a lot of that will be gone, and it will be cashed in by us and other people who own farms. So, hang in there.
Eric Borden -- Berenberg Capital -- Analyst
Sounds good. Thank you, guys. Appreciate it.
David J. Gladstone -- Chairman, Chief Executive Officer and President
Okay. We have any more questions?
Operator
Our next question comes from James Villard with Ladenburg Thalmann. Please proceed.
James Villard -- Ladenburg Thalmann -- Analyst
Good morning, guys.
David J. Gladstone -- Chairman, Chief Executive Officer and President
Good morning.
James Villard -- Ladenburg Thalmann -- Analyst
Just one quick one. How do you think inflation expectations were impacting your acquisition volume?
David J. Gladstone -- Chairman, Chief Executive Officer and President
Yeah, maybe some there. Obviously, inflation in berries and other ground crops are pretty steep right now. And so the farmer is making good money and he wants more money than he wanted before. So, yes, it's following through. The difference is that a lot of the leases that we have in place now go up in price when inflation goes up. So, it helps us. We have stopping points as we call it, where in three years or five years, we assess the marketplace, and to the extent that the marketplace has gone up, we are able to push up the price of our rents. We also have, as we've mentioned many times now, the ownership in some of the crop. And as the crop prices go up, we benefit as well on that.
So it's kind of sheltered ourselves from inflation. We're not in the crops that people rent by the year. For example, a lot of the corn crops are rented on an annual basis, and they, of course, have a chance to jack up the rent every year. We've tried to stay away from that and just put some bumps in there for us, and all of others have some kind of way of the price going up and it's worked very well.
I think there is always a tension between what you want to do on something like that, and because if the prices of the crop go down, our rent doesn't go down. So we only have a chance to move rents up rather than any other method. And like many other REITs, we have built into our leases 2% increases every year, 3% increases every year, and that pretty much takes care of the way inflation is going.
However, at the rate of the last six months, that would be stripped away pretty quick. So inflation could hurt us, unlikely at some point in time, we will regain our strength back because the lease will come due and that's when we push up the price. I think the acquisition side -- inflation on the acquisition side is taken care of by the fact that people want to sell, they want to sell for no taxes or they want to sell and lease it back with some kind of inflation protection for us and for them that they know what they're going to have to pay over the next five to ten years, in the sense that they have a base rent and an inflated piece of the rent.
I don't know, there is not many ways to protect yourself. We go through that with our other REIT which is in the business of buying warehouses and office buildings that are leased to tenants. And those are all long-term leases with bumps every year. That seems to be OK, but I think you're right, there is some herd [Phonetic] against us being able to buy some properties, we looked at a farm in Oxnard, not too long ago that was growing some very inflated types of crops. And so as a result, they wanted more money for it and they also were in an area -- if you're in Oxnard, you're within striking distance of LA. And I think all of that land will be sold over time.
I remember going over from LA some years ago and I arrived in the afternoon and the twinkling lights were very few ten years ago. Today you come over that hill that's just before you get to Oxnard, and there are a lot of lights, so they're building houses there, they're building this, that and the other. And so it's going to -- it's going to grow, it's just too close to LA not to grow. So we're going to see that pressure on those properties as well.
Anything else I can answer for you?
James Villard -- Ladenburg Thalmann -- Analyst
Yeah. I guess just kind of following up on that, are you seeing any -- I guess, in the negotiations you're having on new potential leases, are you seeing more push back on your ability to get percentage rent agreements?
David J. Gladstone -- Chairman, Chief Executive Officer and President
No, I don't think so. I think we always -- there is a dance that goes on between buyers and sellers, and we are no different from anybody else. They're pushing whatever they think they can get, and which they should do. But I think the negotiations go pretty straightforward. Most people have already heard about us, they've already read about us, they are probably some shareholders that come with their land. But having negotiations go pretty straightforward, and some sellers as I mentioned in another part of the presentation have an emotional attachment to their land. And they just don't want to sell it at the average price that's going on.
They have their whole history. I know when we bought a farm in Oxnard, it had an old fashioned house on it. We ended up tearing down the house. And after we tore it down, I realized that one of the families there, all of their children who were in their 60s now had grown up in that house, and I regretted it from that standpoint, but we had to get rid of it because we were afraid they were going to come in and tell us, it's one of those protected areas that we couldn't tear down the house. It was a beautiful old farm house, but it didn't fit in the farm. They had been lived in for years and years and years. So it was not in good shape.
Anyway, I think there is a lot of people in the California areas that I went -- recently there was a family with 24 members in the family that had come over about 100 years ago. And each of those 24 people have the right to stop any sale. I had 23 of them lined up -- I'm sorry, 22 of them lined up, but they were two hold-outs and we couldn't get them to agree. So it's still sitting out there, I guess, it's ready for somebody else to take over at some point in time and sell it off. But it will get sold. There is just nobody there that wants to do it. Besides it's in -- it's growing garlic and how many people can grow garlic. Any other question?
James Villard -- Ladenburg Thalmann -- Analyst
I mean, I guess just following up on that, I mean, is there -- have you seen a change -- I'm guessing, where I'm getting at it, is there a change in what's versus pre -- I guess pre-inflation scare looking back to a year?
David J. Gladstone -- Chairman, Chief Executive Officer and President
No, we haven't seen anybody say, gee, it's worth more this year because of inflation. I mean, I'm sure somebody argues that. We don't spend a lot of time on it. We usually have an appraisal. We need to keep the -- within the confines of the appraisal because that's what we borrow against this, whatever the appraiser says, the banks will usually give us 60% of that in terms of a long-term mortgage. So we don't have a lot of room to go outside of that appraised relationship, but we're in every time we do a deal.
So, yeah, they know what we can -- and we tell them, here's what we can pay. And they either keep coming back and negotiating or they stop and go away. And at this -- as we call it the smaller end of the spectrum, there just aren't that many people out there bidding against us. I'm sure we'll see somebody come and do the same thing we're doing at some point in time. So far, no one is there. And as you probably know, we have a huge team of people in both Florida -- not a huge team in Florida, but a huge team in California, just everywhere there, everybody knows us.
James Villard -- Ladenburg Thalmann -- Analyst
Yeah, thank you for the color. Great answer.
David J. Gladstone -- Chairman, Chief Executive Officer and President
Okay, thank you. Any other questions?
Operator
There are no further questions in queue at this time. I would like to turn the call back over to Mr. Gladstone for closing comments.
David J. Gladstone -- Chairman, Chief Executive Officer and President
Well, thank you all for asking questions. Hope you come with a lot of questions next time. It's always great just to chat about things that are on your mind. And we'll see you next quarter. That's the end of this call.
Operator
[Operator Closing Remarks].
Duration: 59 minutes
Call participants:
David J. Gladstone -- Chairman, Chief Executive Officer and President
Erich Hellmold -- Deputy General Counsel
Lewis Parrish -- Chief Financial Officer and Assistant Treasurer
Robert Stevenson -- Janney Montgomery Scott LLC -- Analyst
Eddie Reilly -- EF Hutton -- Analyst
Eric Borden -- Berenberg Capital -- Analyst
James Villard -- Ladenburg Thalmann -- Analyst
<<<
>>> World's largest 3D-printed neighborhood to break ground in Texas
November 4, 2021
by Oscar Holland
CNN
https://edition.cnn.com/style/article/icon-3d-printed-homes-austin
Anew property development in Austin, Texas, is set to become the world's largest community of 3D-printed homes.
Scheduled to break ground next year, the project will feature 100 single-story houses "printed" on-site using advanced robotic construction and a concrete-based building material.
Digital renderings of the neighborhood, unveiled last week, show rows of properties with their roofs covered in solar cells. The homes will each take approximately a week to build, according to firms behind the development.
The project is a collaboration between homebuilding company Lennar and ICON, a Texas-based construction firm specializing in 3D-printed structures. The houses have been co-designed by the Danish architecture practice Bjarke Ingels Group.
Although ICON would not disclose the cost of the project, the company said its technology is significantly faster and cheaper than conventional construction methods -- partly because it requires less manual labor. The building process will involve five of the firm's 46-foot-wide robotic "Vulcan" printers, which pipe out a concrete mix called Lavacrete according to a pre-programmed home design.
The firms behind the project said houses can be significantly cheaper and quicker to produce using 3D printing.
The firm said it can produce homes up to 3,000 square feet in size, and has previously printed the walls of a house measuring 400 to 500 square feet in just 24 hours (spread over the course of "several days"). Roofs, windows, doors and finishes will be added afterward by Lennar.
In a press release, ICON's co-founder and CEO Jason Ballard described the Austin neighborhood as a "watershed moment in the history of community-scale development."
"Construction-scale 3D printing not only delivers higher-quality homes faster and more affordably, but fleets of printers can change the way that entire communities are built for the better," he is quoted as saying. "The United States faces a deficit of approximately 5 million new homes, so there is a profound need to swiftly increase supply without compromising quality, beauty, or sustainability and that is exactly the strength of our technology."
In a statement, Martin Voelkle, partner at Bjarke Ingels Group, described the 3D-printed buildings -- and their photovoltaic roofs -- as "significant steps towards reducing waste in the construction process, as well as towards making our homes more resilient, sustainable and energy self-sufficient."
Advocates of 3D-printed construction believe it can greatly reduce labor costs and construction time. Research has also suggested that the method can slash waste and carbon dioxide emissions. The ability of 3D printers to construct buildings without formwork (the concrete molds that cement is typically poured into) can significantly reduce overall use of the material, which is responsible for about 8% of global CO2 emissions annually.
A recent study in Singapore, for instance, found that constructing a bathroom unit using 3D printing produced almost 86% less carbon dioxide than conventional construction methods -- and was over 25% cheaper. Critics have meanwhile pointed out that 3D concrete printing still relies on a non-renewable material, and that structures' safety and stability are not specifically addressed by existing building codes.
Is this 3D-printed home made of clay the future of housing?
'Not science fiction'
While the newly announced Austin project is ICON's largest to date, the firm has been using 3D printing to build social, or subsidized, housing in Mexico and Texas since 2018. The company also recently revealed that it is working with NASA to make building materials from moon dust, with a view to constructing a lunar base.
Earlier this year, ICON unveiled plans for a separate four-home development in East Austin. In 2019, the company also announced that it is building a community of 50 homes for low-income families in Tabasco, Mexico.
ICON has yet to unveil prices for the homes in its new Austin development. Earlier this year, the first printed home to hit the market in the US -- a one-story, 1,400-square-foot space in Riverhead, New York -- was listed for $299,000. Another 3D printing firm, Palari Group, recently unveiled plans to build 15 3D-printed properties near Palm Springs, California, with prices for three-bedroom homes starting at $595,000.
Speaking to CNN in 2019, Ballard said that his company's technology could "deliver a much higher-quality product to the housing market at a speed and price" that is "typically not available" for low-income families. His firm believes its technology can also be used to combat homelessness and may be deployed during disaster relief.
"3D printing is not science fiction," Ballard said at the time. "We have crossed that threshold from science fiction into reality. In the future, our bet is that this will be humanity's best hope for a housing solution that matches our highest values and ideals."
<<<
>>> Zillow Seeks to Sell 7,000 Homes for $2.8 Billion After Flipping Halt
Bloomberg
by Patrick Clark, Sridhar Natarajan and Heather Perlberg
November 1, 2021
https://finance.yahoo.com/news/zillow-seeks-sell-7-000-184559654.html
(Bloomberg) -- Zillow Group Inc. is looking to sell about 7,000 homes as it seeks to recover from a fumble in its high-tech home-flipping business.
The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter. Zillow will likely sell the properties to a multitude of buyers rather than packaging them in a single transaction, said the people, who asked not to be named because the matter is private.
A representative for Zillow didn’t immediately comment.
The move to offload homes comes as Zillow seeks to recover from an operational stumble that saw it buy too many houses, with many now being listed for less than it paid. The company typically offers smaller numbers of homes to single-family landlords, but the current sales effort is much larger than normal.
If successful, the sale would make a dramatic dent in Zillow’s inventory. The company acquired roughly 8,000 homes in the third quarter, according to an estimate by real estate tech strategist Mike DelPrete.
Zillow shares dropped 8.6% to $96.61 on Monday. The stock had slipped 22% this year through Friday after nearly tripling in 2020. The company is scheduled to report earnings on Tuesday.
Read more: Zillow’s Zeal to Outbid for Homes Backfires in Flipping Fumble
Zillow recently said it would stop making new offers in its home-flipping operation for the remainder of the year, though it continues to close on properties that were already under contract. The decision came after the company tweaked the algorithms that power the business to make higher offers, leaving it with a bevy of winning bids just as home-price appreciation cooled off a bit.
An analysis of 650 homes owned by Zillow showed that two-thirds were priced for less than the company bought them for, according to an Oct. 31 note from KeyBanc Capital Markets.
“I think they leaned into home-price appreciation at exactly the wrong moment,” said Ed Yruma, an analyst at KeyBanc.
Zillow put a record number of homes on the market in September, listing properties at the lowest markups since November 2018, according to research from YipitData. It also cut prices on nearly half of its U.S. listings in the third quarter, according to Yipit, signaling that its inventory was commanding prices lower than it expected.
Read more: Cerberus Leads Wall Street Landlords Finding Hidden Homes to Buy
Led by Chief Executive Officer Rich Barton, Zillow is best known for publishing real estate listings online and calculating estimated home values – called Zestimates – that let users keep track of how much their property is worth. The popularity of the company’s apps and websites fuels profits in Zillow’s online marketing business.
But more recently it has been buying and selling thousands of U.S. homes, practicing a new spin on home-flipping called iBuying that seeks to offer sellers a better way of selling a home.
Zillow invites owners to request an offer on their house and uses algorithms to generate a price. If an owner accepts, Zillow buys the property, makes light repairs and puts it back on the market.
The company bought more than 3,800 houses in the second quarter, making progress toward its stated goal of acquiring 5,000 homes a month by 2024. The increase in purchases left the company struggling to find workers to renovate the properties.
Read more: Wall Street’s Favorite Suburban Housing Bet Is Getting Crowded
Zillow and its chief iBuying competitors, Opendoor Technologies Inc. and Offerpad Solutions Inc., often sell homes to single-family landlords in the normal course of business. Investors bought roughly 9% of all homes Zillow sold in the first quarter of 2021, Bloomberg previously reported.
Investors have been buying single-family rental homes during the pandemic, chasing the inventory-starved housing market for properties they can buy and rent. That should help Zillow find buyers, said Rick Palacios, director of research at John Burns Real Estate Consulting.
“I bet Zillow can sell to single-family landlords at a profit given how hungry those groups are for inventory,” he said.
<<<
Fundrise - >>> 3 Ways to Earn Big Returns Without the Shaky Stock Market
Don't limit yourself to the stock market. These alternatives can trounce the S&P 500.
MoneyWise
by Rona RichardsonBy Rona Richardson
Oct. 28, 2021
https://moneywise.com/investing/investing-basics/3-ways-to-invest-outside-of-the-stock-market?utm_source=syn_oath_mon&utm_medium=B&utm_campaign=19414&utm_content=oath_mon_19414_new+investing+platform
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.
Investment ideas are plentiful — but most of them involve the stock market or flipping homes.
If you’re looking for a way to invest without the violent swings of stocks or the headaches of being a landlord, this article is for you.
While most of these ideas can have big profit potential, please remember to always do your due diligence.
1. Invest in farmland and help drive agriculture towards sustainability on a massive scale
You can now invest in one of human civilization’s oldest and most reliable sources of wealth: U.S. farmland.
Unlike many other types of investments, farmland is intrinsically valuable — whether boom or bust, people still need to eat.
And with the global population poised to hit 10 billion by 2050, there will be no shortage of mouths to feed.
Between 1992 and 2020, farmland returned an average of 11% per year. Over the same time frame, the S&P 500 returned only 8%. And when considered on a risk-adjusted basis, farmland outperforms the stock market by a wide margin.
FarmTogether is an all-in-one investment platform that lets accredited investors buy stakes in U.S. farmland.
You can get a cut from both the leasing fees and crop sales, providing you with an income stream. And you can also benefit from the long-term appreciation of the land.
Start by opening a FarmTogether account free of charge. Review their past offerings, visit their extensive learning center, and review a sampling of the data and tools that active investors have access to prior to making your first investment.
2. Build a real estate empire without being a landlord
Advertisement
Investing in real estate is another money move that might seem out of reach unless you’re already wealthy.
But Fundrise makes it easy for anyone to get into the real estate game, no matter how big (or small) your budget is.
Using Fundrise is a lot like buying stocks, only instead of getting a piece of a company, you get a share of real estate.
And Fundrise lets you invest in all sorts of properties across the country, from single-family homes in rural Texas to high rise apartments in New York City.
There are no transaction fees or sales commissions, and the standard fees are just 1% a year.
Set up an account in a few minutes, and you can start building your real estate empire with as little as ten bucks.
3. Jump into the crypto boom starting with $1
Once considered a niche asset, Bitcoin has entered the mainstream.
Even big names like Elon Musk and Mark Cuban now hold millions of dollars worth of it in their portfolios.
Here's the main allure of cryptocurrencies: Unlike fiat money, most cryptos have a limited supply of tokens specified by mathematical algorithms. So no matter how much money the Fed prints, cryptos don’t get diluted through inflation.
Some even call cryptos “digital gold.”
At the time of this writing, Bitcoin has returned an astronomical 8,667% over the past five years. Had you invested just $500 in Bitcoin five years ago, you'd be sitting on more than $43,000 today.
Thanks to Robinhood, investing in cryptocurrencies is easier (and cheaper) than ever.
Other big crypto exchanges charge up to 4% per transaction when buying or selling crypto.
Robinhood, on the other hand, charges 0%. And it allows you to trade not only Bitcoin, but also Ethereum, Dogecoin, Litecoin, Ethereum classic, Bitcoin Cash, and Bitcoin SV.
There’s no need to buy a whole coin. You can start with as little as $1. So set up an account and start investing today.
Final Thoughts
You don’t need to limit yourself to the stock market in order to invest successfully.
These three investment ideas aren’t typical, but nonetheless real. Maybe reading about these alternatives will inspire you to think outside of the box when looking for interesting places to invest your own money.
Always remember to consult with a financial advisor to discuss the merits of your ideas and associated risks.
<<<
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |