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REIT Replay: Downward projection


According to Market Intelligence, December 2022


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REIT Replay: Downward projection

Real estate investment trusts and the broader markets posted gains Wednesday, Oct. 4, as Vornado Realty Trust projected a third-quarter funds from operations net loss due to a noncash impairment on its investment in Pennsylvania REIT, among other things.

The MSCI US REIT Index (RMZ) rose 0.48% to 1,156.69, and the SNL US REIT Equity Index gained 0.66% to close at 315.13. The Dow Jones Industrial Average ticked up 0.09%, closing at 22,661.64, while the S&P 500 closed 0.12% higher at 2,537.74.

Vornado Realty Trust said Tuesday that it expects a third-quarter net loss of 47 cents per share on a funds-from-operations basis, to be included in the total FFO but excluded from adjusted FFO.

Vornado shares ticked up 0.48% to end the day at $77.66.

OneREIT said Wednesday that it closed its C$1.1 billion acquisition by Smart Real Estate Investment Trust and Strathallen Acquisitions Inc.

OneREIT shares fell 0.23% to C$4.27 and SmartREIT shares added 0.71% to close at C$29.81.

S&P Global Ratings, in a Tuesday note, downgraded Quality Care Properties Inc.'s ratings, noting the company's limited cushion under its current covenants and high likelihood of breaching its debt service coverage covenant as early as March 2018, without an amendment to its credit facilities or waiver of the covenants by lenders.

Shares of Quality Care shed 0.51%, closing at $15.60.

American Campus Communities Inc.'s operating partnership priced a $400 million debt offering for net proceeds of about $395 million, the company said Tuesday.

American Campus shares gained 0.74% to close at $44.76.

Also on Tuesday, National Storage Affiliates Trust said it priced a roughly $150 million offering of 6.0 million of its 6.000% series A cumulative redeemable preferred shares of beneficial interest. The company also offered an update on its $84.9 million secured debt financing and detailed its recent self-storage property acquisitions.

National Storage Affiliates shares rose 0.33% to close at $24.21.

NorthWest Healthcare Properties REIT said Tuesday that it kicked off a roughly C$125 million bought-deal offering of 11,420,000 trust units, with closing expected on or about Oct. 13.

NorthWest Healthcare shares slid 3.15%, closing at C$11.06.

Sotherly Hotels Inc. said Tuesday that it priced an underwritten public offering of 1.2 million shares of its 7.875% series C cumulative redeemable perpetual preferred stock for about $30.0 million in gross proceeds.

Sotherly Hotels shares dipped 0.17% to close at $5.87.

Duke Realty Corp. agreed to acquire approximately $700 million worth of logistics centers from Bridge Development Partners LLC in two phases, The Wall Street Journal reported Tuesday.

Duke Realty shares lifted 0.31%, closing at $29.10.

A partnership between Brandywine Realty Trust and Allstate Investments sold an office building encompassing 230,904 square feet in downtown Bethesda, Md., to The Donohoe Cos. and USAA Real Estate for $105.7 million, the Washington Business Journal reported Tuesday.

Shares of Brandywine increased 0.80% to close at $17.75.

Boenning & Scattergood Inc. analyst Floris van Dijkum upgraded Regency Centers Corp. to "neutral" considering the company's strip sector-leading fundamentals demonstrated by its robust second-quarter same-store net operating income growth and consistent growth outlook for the full year.

In the same Tuesday note, the analyst downgraded DDR Corp. to "underperform," noting that the company will keep facing challenges that could depress its releasing spreads, occupancy levels and, consequently, same-store net operating income growth.

Regency Centers shares rose 0.79% to $62.87, and DDR shares closed 0.11% higher at $9.12.

On the macro front, the Mortgage Bankers Association said U.S. mortgage applications for the week ended Sept. 29 dropped 0.4% on a seasonally adjusted basis.

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