Where do REIT'S go from here ?

[Gregmal]

So basically class B(really like C+/B-) Sun Belt operator Nexpoint just unloaded two properties. BOTH at sub 5 caps and both using TTM NOI. Soon I think we see divergence in the market as the liars who spent last year talking about huge cap rate blowouts and everything CRE crashing continue to be exposed. I forget exactly who it was, may have been the hedge eye guy or something, claiming rents peaked in Sun belt in Q3 2021 and how everyone should be long coastal reits like AVB. Well, that was totally wrong as pretty much everyone comped big positives again in 2022, but nevertheless stuff like that never stops the "I called it" seekers....continually throughout the year retweeting their own junk and marveling at "OMG look how much MAA and CPT are down"...all while completely ignoring that their AVBs and ESSs are down just as much, if not even more, and thats without ever really rising much above their pre covid highs. Classic baby with the bathwater situations and again, not surprising, because most WS narrative is originated and controlled from NY, at least at the onset. If we are still at sub 5 on Class B, with the fundamentals still holdings, there is again going to be fortunes made. Part of the reason I started some HIW today. You actually have real demand for office, and growing rents in many places.....but to the market and the narrative creators....if VNO or SLG are having all these problems...everyone must be! LOL nope. Just cuz your kingdom is crumbling doesnt mean the rest are. Same shit with San Jose vs the Texas MSAs. 

[dealraker]

59 minutes ago, Gregmal said:

So basically class B(really like C+/B-) Sun Belt operator Nexpoint just unloaded two properties. BOTH at sub 5 caps and both using TTM NOI. Soon I think we see divergence in the market as the liars who spent last year talking about huge cap rate blowouts and everything CRE crashing continue to be exposed. I forget exactly who it was, may have been the hedge eye guy or something, claiming rents peaked in Sun belt in Q3 2021 and how everyone should be long coastal reits like AVB. Well, that was totally wrong as pretty much everyone comped big positives again in 2022, but nevertheless stuff like that never stops the "I called it" seekers....continually throughout the year retweeting their own junk and marveling at "OMG look how much MAA and CPT are down"...all while completely ignoring that their AVBs and ESSs are down just as much, if not even more, and thats without ever really rising much above their pre covid highs. Classic baby with the bathwater situations and again, not surprising, because most WS narrative is originated and controlled from NY, at least at the onset. If we are still at sub 5 on Class B, with the fundamentals still holdings, there is again going to be fortunes made. Part of the reason I started some HIW today. You actually have real demand for office, and growing rents in many places.....but to the market and the narrative creators....if VNO or SLG are having all these problems...everyone must be! LOL nope. Just cuz your kingdom is crumbling doesnt mean the rest are. Same shit with San Jose vs the Texas MSAs. 

Oh my Greg, I'd just bought Highwoods this morning.  My CPA friend and bro-in-law (they'd been chatting) called and said...

[Gregmal]

Yea winners gone win. 

[Spekulatius]

I bought 2/3 (roughly) $CPT and 1/3 $ESS position after pupil posted is multifamily Reit trade. I think i will do Ok, but probably not great on that one.

Edited January 25, 2023 by Spekulatius

[Gregmal]

Yea I agree with that on the large MF stuff. Too big to get bids but should have a decent reset runway after all the whackos screamed about 6% cap rates and somehow that got priced in to most of them, deservedly or not. 

[Ulti]

https://podcasts.apple.com/us/podcast/odd-lots/id1056200096?i=1000597227627
 

interview with apartment list chief housing economist…outlook on 2023

[tede02]

I've had a small position in a non-traded office REIT for over 10 years. Class A in markets across the US. I've hung onto for a variety of reasons. It's done decent and I just kind of enjoy following it as one barometer for what's going on in commercial real estate.

 

The shares wered marked down 16% in 2022 but most of it was due to an equity position the REIT holds in a spin off that is publicly traded and the impact of rising rates on valuations. What's interesting to me is occupancy has hardly moved over the last three years and is hanging in the 88-89% range. Rents have been flat. If you would have told me that's how things would play out after the pandemic hit, it would have been hard to believe.

 

More recently, the dividend was recently cut around 20% because the REIT is rolling debt at obviously much higher rates. I'm annoyed that management didn't secure better terms before rates surged. This seems like a big miss.