REIT - REIT Earnings Preview: Delay And Pray

2024-04-19 09:00:00 ET

Summary

• Real estate earnings season kicks off this week, and over the next month, we'll hear results from 175 equity REITs, 40 mortgage REITs, and dozens of housing industry companies.
• One step forward, one back. Pressured by the rebound in interest rates, REITs again enter earnings season on a skid, with the REIT Index now 12% off recent December highs.
• While property-level fundamentals remain solid across most property sectors, the latest rate resurgence creates renewed pressure on rate-sensitive sectors and more highly leveraged REITs.
• Amend and Extend, or Delay and Pray? For some highly levered private equity portfolios that "kicked the can down the road" with short-term refinancing, the latest rate resurgence will likely prompt more aggressive liquidations, which may create opportunities for public REITs.
• Notable recent 'green shoots' include: a firming in residential rents despite ample multifamily supply, steady positive momentum in retail, a modest rebound in office leasing, some cooling in travel demand, softer leasing trends in goods-oriented property sectors, and an overall slowdown in construction activity.

Real Estate Earnings Preview

Real estate earnings season kicked 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) ...

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