Displaying items by tag: reits

Wednesday, 13 March 2019 12:44

Eye-Popping Yields in Mortgage ETFs

(New York)

If you are of the opinion that rates are not going to move higher, or if just want some great yields and aren’t too worried about rates, take a look at mortgage REIT ETFs. Mortgage REITs are a special subsector of the REIT industry, and have recently become greatly more accessible because of ETFs. For instance, consider the iShares Mortgage Real Estate ETF (REM). The fund has a 30-day SEC yield of 9.36%. It is obviously rate sensitive, but even during last year’s brutal hiking cycle, it only lost 3.75%.


FINSUM: If the Fed stays put this year, which it likely will, these could be a great investment as we head into a downward rate cycle.

Published in Bonds: MBS
Wednesday, 20 February 2019 11:27

Four Analyst Picks to Play the Data Center Surge

(New York)

Along with warehouse growth, data center expansion is one of the hottest areas of commercial real estate. So how to play it? These REITs were hit pretty hard at the end of the year, but they are now making a strong comeback. The big driver at the macro level is demand for cloud services and the growth of AI, both of which increase the need for data center space. Four stocks to look at are Equinix, CoreSite Realty (COR), Iron Mountain (IRM), and InterXion Holding (INXN).


FINSUM: Data centers seem to have some strong growth drivers behind them, and along with warehouses, we think they are strong ideas for REITs.

Published in Eq: Real Estate
Thursday, 29 November 2018 13:14

There is No Buyers’ Market Coming in Real Estate

(New York)

It would be easy to think that real estate is headed towards a buyer’s market. Inventory has been increasing, prices gains have slowed or disappeared, rates are rising, and prices are very high. However, despite all of this, many real estate experts think 2019 will still be a better year to be a seller than a buyer. The reason why is that inventory may only increase slightly, which will keep prices relatively high and not lead to massive price cuts like in the last housing downturn. A recession still looks a little way off, which could also insulate prices as the employment market stays tight.


FINSUM: We think the housing market is definitely going to see prices stay flat or fall next year, mostly because demand is falling as rates rise. However, we do agree that the bottom is not going to fall out by any means.

Published in Eq: Real Estate
Wednesday, 28 November 2018 11:58

Some Good REIT Calls

(New York)

REITs are an interesting sector at the moment. The real estate sector is obviously past peak, and rates are rising, a double whammy for REITs. The initial reaction for many would be “stay away”, however, there is some value to be had. One interesting area is in regional mall REITs, which have actually outperformed the S&P 500 this year. There is a lot of variation in quality between different regional malls, however. In particular, the performance is bifurcating between the very best malls and the rest, with the former thriving, and the rest lagging.


FINSUM: The US has 1,000 malls and some estimates say there is only enough demand to solidly support around 300. The ones that stick around, particularly the top 20, will likely do very well.

Published in Eq: Real Estate
Tuesday, 20 November 2018 17:37

Why Real Estate Might Stop the Fed

(New York)

One of the surest signs in the economy right now is that real estate is in trouble. Data coming out of the sector has been consistently weak for months and shows a clear downtrend in the housing market. Rates seem to be playing a big part of that, as demand for housing has sunk as rates have risen. That could prove one of the few brakes on the Fed’s relentless rate hike path. The fall in real estate comes at a time when the market should be surging, as unemployment is at extreme lows and Millennials are entering their peak home buying years.


FINSUM: Besides stocks and bonds freaking out, real estate is one of the areas showing a lot of weakness, and this it is perhaps one of the few aspects that could stop the Fed.

Published in Eq: Real Estate
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