MBB - REIT Earnings Preview: Animal Spirits Revived?
2024-01-25 11:30:00 ET
Summary
- Real estate earnings season kicked into gear this week, and over the next month, we'll hear results from 175 equity REITs, 40 mortgage REITs, and dozens of housing industry companies.
- The sector with perhaps the most to gain from moderating inflation and a normalization in Fed monetary policy, REITs enter earnings season with upside momentum after a dismal eighteen-month stretch.
- Sentiment and macroeconomic conditions have improved significantly in the past quarter, fueled by several months of encouraging inflation data pointing once again towards a "soft landing" for the domestic economy.
- Private real estate markets take far longer to fully reflect "real time" market conditions, so there's likely more distress to come in 2024 - and opportunity for well-capitalized public REITs. Benchmark yields remain 2x higher than the average from 2015-2019.
- Are the animal spirits coming alive? After a half-decade of being "raided" by private equity firms, macroeconomic conditions are ripe for public REITs to reach into private markets to fuel accretive external growth this year, especially given the muted appetite for new development.
Real Estate Earnings Preview
Real estate earnings season kicks off this week, and over the next month, we'll hear results from more than 175 equity REITs, 40 mortgage REITs, and dozens of housing industry companies, which will provide key insights into how the real estate industry is adapting to the shifting interest rate regime. This report discusses the major high-level themes and metrics we'll be watching across each of the real estate property sectors this earnings season. Below, we compiled the earnings calendar for equity REITs and homebuilders. (Note: Companies that have not yet confirmed an earnings date are in italics. We'll update the chart in real-time for members linked here .) ...
REIT Earnings Preview: Animal Spirits Revived?