The Daily REITBeat | Friday, February 28th, 2025

"Some Core Data?"

Author

David Auerbach
February 28, 2025

Good Morning!

Futures in the green at the time of this writing as talking heads prepare for today’s Core Personal Consumption Expenditures (PCE) data coming due which has significant implications towards Fed policy along with the move in bitcoin and treasuries.

So how are we doing in the battle against inflation? We shall find out more soon…

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From Bloomberg

  • "S&P 500 futures edged higher as traders looked forward to a print of the Federal Reserve’s preferred inflation measure for clues on the outlook for interest rates.

  • Contracts for the equity benchmark climbed 0.2%, signaling a modest rebound after the index erased the last of its 2025 gains on Thursday. A plunge in Bitcoin deepened as investors avoided riskier assets following President Donald Trump’s latest tariff threats. Worries about a trade war spread to oil, which slumped and headed for the biggest monthly loss since September.

  • Attention turns later to the core personal consumption expenditures price index — which excludes often-volatile food and energy costs. The index probably rose 2.6% in the year through January, after an increase of 2.8% in December, according to Bloomberg economists. It likely ticked up to 0.27% monthly compared with 0.16% in December.

  • A hotter-than-expected reading would prompt concern among investors, said Kevin Thozet, a portfolio advisor at Carmignac. “It would be another hint that there hasn’t been much progress on US inflation since June 2024,” he said."

In REIT News

  • RBC upgrades WELL to Outperform from Sector Perform (raise price target by $22 to $168)

  • AHR, ALEX, CUBE, DRH, GMRE, GNL, PGRE announced quarterly earnings

  • BRX priced $400 million of 5.20% senior notes due 2032 and intends to use the net proceeds for general corporate purposes, which may include repayment of outstanding indebtedness under its unsecured revolving credit facility

  • FVR announced intraquarter net investment activity for 1Q’25 noting that 1) From January 1, 2025 through the date of this release, we acquired 14 new properties for $35.3 million at a weighted average initial cash capitalization rate of 7.8% and a weighted average lease term of 12.7 years; 2) The acquisitions were diversified across 7 industries, 11 tenants, and 11 states, including 5 new tenants and 2 new states. Investment grade tenants accounted for approximately 34% of the annualized base rent (“ABR”) from these acquisitions; 3) As of the date of this release, we have 6 properties under contract for an additional $20.7 million at a weighted average initial cash capitalization rate of 8.2% and a weighted average lease term of 12.6 years. The properties are diversified across 5 industries, 5 tenants, and 4 states, with investment grade tenants representing approximately 12% of the ABR; 4) During February 2025 we sold one property for gross sales proceeds of $2.1 million at a 6.9% cash capitalization rate, recognizing a $0.05 million gain over our original purchase price

  • AHT announced that the Board of Directors has approved significant reductions to board and management compensation as part of its broader "GRO AHT" initiative whereby compensation for board members was reduced by 50%, and the Board of Directors has currently been reduced from nine members down to seven plus incentive awards granted to executive management and other associates have been reduced by more than 50% in aggregate relative to recent years

  • Moody’s downgrades FSP’s corporate family rating and senior unsecured rating to “Caa1” from “B3” and revised its outlook to stable from negative

  • Yesterday, S&P affirmed EPRT’s ratings, including its “BBB-“ issuer credit rating on the company and its issue-level rating on its senior unsecured notes and revised its outlook to positive from stable

  • Yesterday, Fitch Ratings affirmed the ratings of IRT and its operating partnership, including the Issuer Default Rating and unsecured debt, at “BBB” with a stable outlook

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Have a great day!

David Auerbach