The Daily REITBeat | Thursday, October 17th, 2024

"Soothing Those Jittery Nerves"

Author

David Auerbach
October 17, 2024

Good Morning!

Dow futures up over 25 points at the time of this writing as talking heads focus on corporate earnings, treasuries, European Central Bank interest rate policy decision and today’s big economic calendar.

From Bloomberg

  • "A recovery in chip stocks soothed market nerves as results from Taiwan Semiconductor Manufacturing Co. spurred gains across major stock gauges. 

  • Contracts on the tech-heavy Nasdaq 100 climbed 0.9% on Thursday, led by an advance in chip stocks after TSMC posted a better-than-projected 54% rise in quarterly earnings. That helped reverse the impact of ASML Holding NV’s lowered 2025 guidance, which halted a rally that had pushed US-traded shares to a three-month high. The Stoxx 600 index gained 0.7%.  

  • “TSMC earnings were clearly a positive and that has allayed some of the worries around the chip sector after that dismal report from ASML,” said Michael Brown, strategist at Pepperstone Group Ltd. “The outlook for risk remains very positive particularly as central banks across both developed markets continue to remove policy restriction at a pretty rapid pace.” 

  • The European Central Bank’s policy decision is due later, where it’s expected to cut its benchmark rate by another quarter-point to 3.25%. 

  • Shortly after, the market will turn its attention to US retail sales and jobless figures for further evidence that the US consumer and labor market remain healthy, as investors seek confirmation of soft-landing bets.

  • Treasury 10-year yields climbed two basis points to 4.03% ahead of the data."

In REIT News

  • Jefferies initiates SUI with a Buy rating ($160 price target)

  • Jefferies initiates ELS with a Hold rating ($72 price target)

  • Piper Sandler initiates CURB with an Overweight rating ($28 price target)

  • Compass Point upgrades HST to Buy from Neutral (raise price target by $4 to $22)

  • CCI, FR, REXR, SLG announced quarterly earnings while PINE announces after the close of trading

  • SLG announced that it signed a 924,876 sf renewal and expansion lease with Bloomberg, L.P. at 919 Third Avenue which includes a 749,035 sf, 11-year lease extension commencing March 1, 2029, covering floors 2-18 and 28-33 plus Bloomberg will expand its footprint within the building by 175,841 sf with a new 15-year lease covering a portion of the 34th floor and the entire floors on 35 and 41-44

  • CHCT closed on an amended 5-year $400 million senior unsecured revolving line of credit with the Second Amendment to the Company's Third Amended and Restated Credit Agreement which 1) increases the Company's liquidity compared to the previous $150 million senior unsecured revolving line of credit; 2) extends the Company's debt maturity profile with the next debt maturity not being until March 2028; and 3) achieved improved, lower pricing on the Revolving Facility of 10 to 30 basis points depending on the applicable leverage ratio as proceeds from the increased Revolving Facility were used to repay the existing seven-year term loan facility in the aggregate principal amount of $75.0 million, which was scheduled to mature on March 29, 2026 and approximately $123.0 million that was outstanding under the Revolving Facility prior to October 16, 2024 will remain outstanding under the Revolving Facility pursuant to the Refinancing Transaction

  • UNITE HERE has written a letter to the California Attorney General and Franchise Tax Board calling for the agencies to investigate whether AHT and BHR are violating IRS provisions that provide them with lucrative tax breaks on their corporate income commenting that “the REIT tax break likely costs California taxpayers hundreds of millions per year in lost revenue, and urges the Attorney General and Franchise Tax Board to investigate whether the concerns identified regarding AHT and BHR are prevalent with respect to other REITs, particularly in the hotel sector, in order to ensure that the state receives the revenue to which it is entitled to fund the services our members and others need and all companies are operating on a level playing field.”

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Have a great day!

David Auerbach & Mary Jensen