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Soft Landing Secured? Weekly Outlook: https://lnkd.in/eFut-Eby U.S. equity markets posted mixed performance while interest rates dipped to four-month lows as a lukewarm start to corporate earnings season and mixed economic data reinforced Fed rate cut expectations. Another twist in a wild month of politics, President Biden announced that he would not seek reelection, instead endorsing VP Harris, setting the stage for a more competitive November election. The S&P 500 slipped 0.8% on the week as the powerful "value rotation" trade extended into a third-week. The Small-Cap 600 rallied 3.6% while the mega-cap Nasdaq 100 dipped 2.6%. Real estate equities - which were even more significant underperformers during the Fed's rate hiking cycle - were among the leaders for a third-straight week following a strong start to earnings season. Of the 27 equity REITs that have provided full-year guidance, 20 (74%) have raised their outlook, while just 1 (4%) has lowered its outlook - well above the historical average "raise rate" for the second quarter of 40-45%. REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | Seeking Alpha | #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

Inflation Cools • Small-Cap Strength • REIT Earnings REIT Daily Recap: https://lnkd.in/erX5TY9g U.S. equity markets rebounded Friday while benchmark interest rates declined to four-month lows as the PCE Price Index showed a continued cooling of inflationary pressure in June and reinforced expectations of Fed rate cuts later this quarter. All eyes were on the PCE Price Index this morning - the Federal Reserve's preferred inflation gauge - which showed that price pressures continued in June, as expected, with the headline PCE posting its lowest annual increase since early 2021. Headline PCE increased 0.1% in June and 2.5% from a year ago - matching consensus estimates - as a 0.2% decline in goods prices were offset by a 0.2% increase in services. The so-called "Supercore" PCE metric - Core Services ex-Housing - rose 0.19% from the prior month, which pulled the 3-month average back to roughly 0.2%, which is consistent with the Fed's 2% inflation target. Swaps markets continue to price-in in a 100% probability that the Fed will cut rates in September - unchanged from yesterday - and imply 2.73 rate cuts in 2024 - up from 2.62 cuts implied yesterday. REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | Seeking Alpha | #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

Historic REIT IPO • Goldilocks GDP • REIT Earnings REIT Daily Recap: https://lnkd.in/d_tsahK2 A new REIT is born. Lineage Logistics (LINE) - the world's largest cold storage operator - raised $4.44 billion in its initial public offering - the largest IPO of the year in the United States, and the largest IPO of a REIT in history. $LINE issued roughly 57M shares of common stock at $78/share, which was at the upper end of its previously indicated range of $70 to $82, implying a total enterprise value of over $18 billion. Lineage is the world’s largest cold storage operator with a network of roughly 480 facilities totaling over 84.1 million square feet and 3.0 billion cubic feet of capacity across countries in North America, Europe, and Asia-Pacific. Americold (COLD) - the second-largest cold storage operator - went public in 2018 and has had a relatively successful tenure as a public REIT, delivering annualized total returns of 10.0% since inception, nearly double that of the Equity REIT index at 5.7%. Following a historically quiet period of REIT IPO activity dating back to the start of the Fed's rate hiking cycle in early 2022, the "animal spirits" may be coming alive once again in the real estate sector as rate-related headwinds ease. Last month, a former non-traded REIT Sila Realty (SILA) - which owns a $2.1B net lease healthcare portfolio - went public via a direct listing on the NYSE.

Stocks Slide • Behind The Curve? • Blackstone Dividend Cut REIT Daily Recap: https://lnkd.in/eW_nF_Yb U.S. equity markets tumbled Wednesday while short-term interest rates tumbled to the lowest-level since early February as investors parsed a disappointing slate of earnings results from several mega-cap tech names. Posting its worst day since December 2022, the S&P 500 slid 2.3% today, while the Dow Jones Industrial Average tumbled 504 points. Weighed down by heavyweights Alphabet and Tesla, the tech-heavy Nasdaq 100 dipped 3.6% on the session, extending its losing skid to five of the past six sessions. Continuing the "value rotation" theme, the Small-Cap 600 posted more-muted declines of 1.9%, outperforming the S&P 500 for the tenth time in the past eleven sessions. Real estate equities were among the better-performers today as solid results from a office and retail REITs offset a widely-discussed miss and dividend reduction from Blackstone Mortgage. The Equity REIT Index declined by 1.5%, with 17-of-18 property sectors in negative territory. The Mortgage REIT Index tumbled 3.7%, while Homebuilders slipped 2.5%. REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | Seeking Alpha

Freight Recession • REIT Earnings • Home Sales Slump REIT Daily Recap: https://lnkd.in/daydT_UC Commercial mortgage REIT KKR Real Estate (KREF) - which had been among the weaker performers this year after reporting rising delinquencies in its office-heavy loan book - surged 14% today after reporting results that were "less bad" than feared. Despite realizing several losses on three delinquent loans, KREF reported that its Book Value Per Share ("BVPS") actually increased 0.4% during the quarter to $15.24, as its CECL reserves adequately covered the realized losses. KREF's distributable EPS excluding realized losses rose a penny to $0.40 during the quarter, which covered its $0.25/share dividend. KREF resolved three of its four Risk-5 office loans - two through REO and one write-off - and avoided any further downgrades in its loan book in Q2, which resulted combined with the resolutions, lowered its average risk rating of the portfolio favorably improved to 3.1 from 3.2 previously. Elsewhere, residential mREIT AGNC Investment Corp. (AGNC) gained 0.7% today after reporting mixed results, but providing an upbeat outlook on residential MBS investment fundamentals. Like its peer Dynex Capital (DX) yesterday, the combination of hedging costs and the impact of equity issuance offset the investment returns during the quarter, resulting in a 5.0% decline in its BVPS during the quarter, but AGNC noted that its BV has increased by 2% thus far in July. Comparable EPS moderated slightly to $0.53 in Q2 - roughly in-line with estimates and still covering its $0.36/share dividend. REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | Seeking Alpha

Biden Bows Out • Stocks Rebound • Earnings Ahead REIT Daily Recap: https://lnkd.in/ejq6h4iD We'll see another jam-packed slate of economic data in the week ahead, as the Federal Reserve will be in its "quiet period" ahead of the FOMC meeting and interest rate decision on July 31st. The most closely-watched report of the week comes on Friday with the PCE Price Index. The Fed's preferred gauge of inflation, Core PCE is expected to cool slightly to 2.5% in June, down from its peak of 5.6% and now within range of its stated 2% policy objective. We'll see both major home sales reports earlier in the week, which will provide good insight into where the housing market stands after two years of abnormally tight monetary policy. On Tuesday, Existing Home Sales data is expected to show an annualized sales velocity of 4.0M in June - still hovering around three-decade lows, and considerably below the typical 5.0-5.5M range. On Wednesday, we'll see New Home Sales data, which is expected to show sales activity at a 640k annualized sales pace in June - down about 5% from last year - as builders continue to contend with financing and affordability issues. On Thursday, we'll get the first look at second-quarter Gross Domestic Product, which is expected to show "real" economic growth of 2.0% in the second quarter, which follows a disappointing 1.4% growth rate in the first quarter. While the "job is not done" yet, it does appear at this point that the Federal Reserve has indeed successfully engineered a "soft landing." Since Q1 2022 - corresponding to the start of the Fed's tightening cycle - real GDP has averaged 1.8% while the CPI Index has cooled from 6.3% to 3.4%. REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | Seeking Alpha | #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

Earnings Preview: A REIT Revival? Real estate earnings season kicks 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 Fed rate cuts, REITs enter earnings season with upside momentum after a dismal two-year stretch, including 50 percentage points of market underperformance. Since the start of last earnings season in mid-April, the Equity REIT Index has gained 14.0%, outpacing the 12.8% gains from the S&P 500, led by small-caps and rate-sensitive REITs. Even before the rate retreat sparked a "REIT revival" in the past several weeks, there appeared to be some "bottoming" in private market real estate valuations in late Spring and early summer. It took longer than expected, but macroeconomic conditions are finally aligning such that the long-dormant "animal spirits" could come alive for public REITs through IPOs and acquisitions of debt-burdened private portfolios. Notable 'green shoots' we've observed in recent commentary and industry data include: 1) surprising strength in office leasing activity; 2) a continued firming in residential rents (especially in limited-supply markets and sub-sectors); 3) a "bottoming" in logistics-related demand amid a rebound in manufacturing activity; 4) a slight cooldown in consumer-oriented trends including retail and travel demand; and 5) still-limited appetite for new ground-up development across all property sectors. https://lnkd.in/e8vnXvpS REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | Seeking Alpha | David Auerbach | Alex Pettee, CFA | Brad Thomas | #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

Weekly Outlook: Certainly Uncertain https://lnkd.in/eJnE34Pj U.S. equity markets posted their worst week since April while benchmark interest rates rebounded from four-month lows as a wild week of political developments sparked a surge in volatility. Markets reflected a higher likelihood of a conservative victory after former President Trump survived an assassination attempt last weekend, adding fuel to the rotation from multinational growth towards value-oriented domestic. The tech-heavy Nasdaq 100 slid 4% on the week, as tech-specific concerns compounded pre-existing macroeconomic dynamics, but small-cap and mid-cap indices outperformed. Real estate equities led for a second-straight week, lifted by a strong start to REIT and homebuilder earnings season. All six REITs that reported results raised their full-year FFO outlook. Not exclusive to the political arena, "certainly uncertain" was the theme across economic reports this week as the Fed entered its "quiet period." Continuing Jobless Claims jumped to nearly four-year highs, but Retail Sales and Housing Starts topped modest estimates. REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | Seeking Alpha | #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

Tech Wreck • REIT Earnings • Fed Goes Quiet REIT Daily Recap: https://lnkd.in/ejRagtiK Small-cap net lease REIT Alpine Income Property Trust (PINE) - which owns 137 properties across 34 states - was among the top-performers today after it kicked-off net lease earnings season with a solid report. Driven by recent "capital recycling" transactions, PINE now expects full-year AFFO growth of 8.7% - up from 4.4% previously. Noting that it "took advantage of very low cap rates," PINE sold two properties for $6.6M at a weighted average exit cash cap rate of 7.0%, and redeployed the capital across two deals totaling $20.7M with a weighted average yield of 9.5%. The investments included a $14.6M property that is 100% leased to Best Buy and Dick’s Sporting Goods with 5 years remaining in the current lease and a $6.1M construction loan at a yield of 11.5%. PINE noted that it is looking to reduce its exposure to Walgreens (WAL) - its top tenant at 12% of ABR - which announced last month that it is seeking to "significantly" reduce its store count. Speaking on the broader net lease environment, PINE commented that it is "still seeing some very good buyer interest for smaller net-lease properties under $5 million. It's still a very active market and not a lot of dislocations. Larger properties aren't moving as much, but there's a little bit more activity than last quarter for sure." REIT Academy & The Executive REIT Masterclass | The Daily REIT Beat Newsletter | Seeking Alpha | #REITs #Dividends #Investing #Income #Yield #RealEstate #Housing #Stocks #Bonds #HighYield #DividendInvesting #IncomeInvesting #Diversification #Inflation #realassets #investment

Earnings Quick Take: The solid start of industrial REIT earnings season continued over the past 24 hours, with another pair of REITs indicating a bottoming in fundamentals and solid demand trends in recent months following a slow start to 2024. Sunbelt-focused First Industrial Realty Trust (FR) rallied 3% today after reporting surprisingly strong results and boosting its full-year NOI and FFO outlook. Driven by strong leasing activity in its speculative developments, FR now expects full-year NOI growth of 8.75% - up from 7.75% previously - and forecasts FFO growth of 7.0% - up from 5.3% previously. $FR commented that "fundamentals are slowly improving, although as expected, market vacancy ticked up...decision-making remains fairly deliberate. It's still early to determine the resiliency and the pace of demand even though we see today, indicators are pointing in the right direction." West Coast-focused Rexford Industrial (REXR) declined 1.5% today after reporting in-line results indicating that, as expected, demand trends remain soft in its Southern California market. $REXR noted that Southern California market rents fell another 2.0% during the quarter and roughly 5% from a year earlier, but was still able to achieve mark-to-market rent increases of 49% on a cash basis in Q2 - a modest acceleration from the prior quarter but below the 60% increases on its leases from '22-23. https://lnkd.in/dqeR4xdW