The Daily REITBeat | Monday, January 13th, 2025

"More and More Setbacks"

Good Morning!

Futures in the red at the time of this writing as talking heads highlight a variety of topics including this week’s earnings season kicking off, a big economic calendar, the wildfires in Los Angeles and rising bond yields.

From Bloomberg

"Global stock and bond markets extended losses on Monday, hit by diminishing wagers on Federal Reserve interest-rate cuts and a further oil-price spike that poses a fresh threat to inflation.
Wall Street was set to add to Friday’s losses, with futures on the S&P 500 down 0.7%, and those on the Nasdaq 100 falling 1.1%. Tech shares, including Tesla Inc., Palantir Technologies Inc. and Nvidia Corp., were among the high-profile losers in premarket trading. European shares dropped 0.7%, with technology names leading the declines.
World markets, already in turmoil since the start of 2025, suffered a fresh setback on Friday from a blowout US jobs report that prompted traders to slash their wagers on Fed rate cuts to less than 30 basis points for the whole of 2025. The figures sparked a selloff that wiped out the S&P 500’s year-to-date gain and sent Bloomberg’s dollar index to two-year highs.
Ten-year Treasury yields — the rate that underpins the global cost of capital — rose further to touch a 14-month high, up more than 15 basis points this year. Thirty-year borrowing costs hovered just below the psychologically key 5% threshold.
“As long as the US fixed-income market hasn’t stabilized, it will be difficult for the equity market to regain strength,” said Benjamin Melman, chief investment officer at Edmond de Rothschild Asset Management. “We need some stabilization, but as we are seeing this morning, it is not going to happen today.”"

In REIT News

BMO upgrades ESS to Outperform from Market Perform (lower price target by $13 to $310)
Piper Sandler upgrades DEI to Overweight from Neutral (maintain $20 price target)
Barclays upgrades CCI to Overweight from Equalweight (lower price target by $13 to $104)
Barclays downgrades TRNO to Equalweight from Overweight (lower price target by $8 to $60)
BXP announced that it signed an approximately 246,000 sf long-term lease renewal and expansion with KnitWell Group at 7 Times Square in New York City, NY noting that the 20-year lease comprises the existing approximately 191,000 sf premises plus two additional full floors totaling approximately 55,000 sf
AHH announced that Trader Interactive leased a full 12K sf floor at Town Center of Virginia Beach located at 222 Central Avenue where occupancy of Town Center of Virginia Beach’s 800,000 sf of office space increased from 95% at the end of the third quarter of 2024 to 98% at the end of the fourth quarter and in 2024 alone, more than 110,000 sf of new office leases and renewals were completed
PSTL announced an update on its acquisitions, re-leasing and capital markets activity for the fourth quarter and full year 2024 noting that 1) For the full year 2024, the Company acquired 197 properties leased to the USPS comprised of approximately 571,000 net leasable interior sf for approximately $91 million excluding closing costs which had a weighted average rental rate of $13.61 per leasable sf at a weighted average capitalization rate of approximately 7.6%; 2) As of December 31, 2024, the Company received 88 fully executed new leases from the USPS representing 85% of the aggregate 2023 expired rent and 118 fully executed new leases from the USPS representing 95% of the aggregate 2024 expired rent; 3) For the fourth quarter of 2024, the Company acquired 63 properties leased to the USPS comprised of approximately 176,000 net leasable interior sf for approximately $30.7 million excluding closing costs at a weighted average capitalization rate of approximately 7.5%; 4) During the quarter, the Company issued through its at-the-market offering program 185,445 shares of common stock at an average gross sales price of $14.57 per share plus issued 171,414 common units in its operating partnership as part of the consideration for property acquired during the quarter
AHT reported that it expects to report Occupancy of approximately 66% for the fourth quarter of 2024 with Average Daily Rate of approximately $190 resulting in RevPAR of approximately $126 noting that this Comparable RevPAR reflects an approximate increase of 3.0% compared to the fourth quarter of 2023 plus for the month of October 2024, Comparable RevPAR increased approximately 4.5% versus October 2023 while November 2024 Comparable RevPAR increased approximately 0.4% versus November 2023 and December 2024 Comparable RevPAR increased approximately 3.8% versus December 2023
MPW issued a statement in response to Prospect Medical Group’s decision to commence an in-court restructuring process under Chapter 11 of the U.S. Bankruptcy Code commenting that “…while Prospect’s California facilities have reported volume growth and improved coverage trends in 2024, its overall liquidity has been adversely impacted by stalled sales processes across various East Coast markets, including Rhode Island where MPT has no interest in the real estate. Prospect has not paid any rent to MPT since June 2024, its Connecticut and Pennsylvania lessees and mortgagors have made only minimal payments over the past two years, and MPT has been recognizing all revenues from Prospect using cash basis accounting since 2023…The Company’s priority during the restructuring process is to protect MPT’s investment in Prospect’s California hospitals. MPT also expects to support efforts by Prospect to use the Chapter 11 process to complete a successful sale of Prospect’s Connecticut facilities.”
On Friday, CPT reported that its apartment communities located in the Los Angeles area have not sustained damage from the recent wildfires
On Friday, REXR reported no damage to its properties and does not anticipate unfavorable impacts to the Company’s operating results or financial condition due to the wildfires in Los Angeles County

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David Auerbach & Mary Jensen

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David Auerbach
dauerbach@irrealized.com
214.492.3777

David Auerbach boasts over two decades of experience in the securities industry, specializing as an institutional trader with a focus on Real Estate Investment Trusts (REITs), Equity and Preferred stocks, MLPs, ETFs, and Closed End Funds.

Based in Dallas, TX throughout his entire career, David currently serves as the Chief Investment Officer for Hoya Capital, managing the Hoya Housing 100 ETF (Ticker: HOMZ) and The High Yield Dividend ETF (Ticker: RIET).

Previously, David held the position of Managing Director at Armada ETF Advisors, the sub-advisor for the Residential REIT ETF (Ticker: HAUS) and The Private Real Estate Strategy via Liquid REITs ETF (Ticker: PRVT). Additionally, he acts as a consultant with IRRealized, LLC, focusing on corporate access in the REIT industry.

David's industry journey includes roles at World Equity Group, Esposito Securities, and Green Street Advisors where he got his start in the REIT industry. At Esposito Securities, he played a crucial role in building the REIT/Real Estate platform and worked extensively with institutional investors, Equity REITs, and ETF issuers.

Throughout his career, David has been quoted by reputable publications such as Bloomberg, WSJ, Financial Times, REIT.com, and GlobeSt.com. He has also made notable appearances as a featured guest on networks like Yahoo Finance, TD Ameritrade, and Bloomberg.

David holds a BBA in Finance from the University of Texas at Austin (May 1999) and an MBA in Finance from Southern Methodist University (May 2005). He maintains FINRA Series 7, 24, 55, and 63 registrations.

In his leisure time, David is an avid traveler, often found crisscrossing the country in pursuit of attending as many Phish concerts as possible.

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