September has usually been described as a troublesome month for the inventory market. This pattern goes again almost 100 years and is usually attributed to buyers making adjustments to their portfolios by taking income as summer time ends.
This 12 months, the post-Labor Day vacation week began in bleak style for a lot of actual property funding trusts (REITs) as a collection of analyst downgrades hit the wires shortly earlier than the opening bell on September 5.
Check out 5 cutbacks that negatively impacted the REIT sector and helped pull… Vanguard Actual Property Index ETF (NYSE:VNQ) fell greater than 1% to begin the primary week of September.
Actual Property Kites Group (NYSE:KRG) is an Indianapolis-based retail actual property funding belief with 181 outside and mixed-use properties from Vermont to California. Its malls are principally grocery shops, and tenants embrace CVS, Recent Market, Finest Purchase, Burlington Coat Manufacturing unit, Ross Shops and Costco. Kite Realty went public for an preliminary public providing (IPO) in 2004.
On September 5, Raymond James analyst RJ Milligan downgraded Kite Realty Group Belief by two ranges from sturdy purchase to market carry out. Kite Realty Group shares fell greater than 2% on the day of the announcement. The analyst famous that capital expenditures will seemingly stay excessive till the primary half of 2025.
Federal actual property funding belief (NYSE:FRT) is a diversified, Maryland-based actual property funding belief that owns 102 mixed-use buying facilities and workplaces, in addition to 3,100 residential models in additional prosperous metro markets on the East and West coasts of the US.
Federal Realty Funding Belief, a member of the S&P 500, has been in enterprise since 1962 and is without doubt one of the oldest REITs on Wall Road. Federal Realty Funding Belief is a dividend king and holds the constant report for growing annual dividends for 55 consecutive years.
Federal Realty Funding additionally acquired a downgrade from Raymond analyst James Milligan, from Robust Purchase to Outperform. Milligan additionally lowered its value goal from $115 to $104.
After the downgrade, Federal Realty Funding Belief fell 1.52% on the day.
Progressive industrial actual property firm (NYSE:IIPR) is a San Diego-based diversified/industrial actual property funding belief that makes a speciality of triple-leasebacks and leasebacks of business properties with hashish firms as sole tenants.
As of December 31, 2022, Progressive Industrial Properties owned 108 properties in 19 states. The typical lease time period is 14.9 years. 90% of its properties are industrial, 3% are retail, and 6% are industrial/retail. As of June 30, the occupancy charge was 99.9%.
This week, Compass Level analyst Merrill Ross downgraded Progressive Industrial Properties from purchase to impartial and introduced a $95 value goal.
Newlic Capital Companions (OTCMARKETS: NLCP) is an industrial actual property funding belief primarily based in New Canaan, Connecticut with 31 properties in 12 states. She focuses on triple-leases for hashish firms in addition to offering capital to them when vital.
NewLake Capital Companions was based in 2019 and went public in August 2021. Its tenants embrace the most important firms within the hashish business, akin to Curaleaf, Cresco Labs, Columbia Care, and Trulieve. As of June 30, the occupancy charge was 100%.
This week, Compass Level analyst Ross downgraded NewLake Capital Companions from purchase to impartial and introduced a value goal of $15.50.
The downgrades for the 2 cannabis-focused firms have been considerably stunning, given Progressive Industrial’s 6.16% acquire and NewLake Capital’s 9.52% acquire for August.
Citing the explanation for the cuts, the analyst famous that earnings progress will stay elusive in 2024. However analyst Ross identified one constructive issue — if marijuana have been reclassified from a Schedule I drug to a Schedule III drug, that might allow marijuana operators to revenue. From revenue tax cuts for the primary time.
NewLake Capital Companions misplaced 1% on the day.
Fairness Life-style Actual Property Firm (NYSE:ELS) is a residential actual property funding belief that makes a speciality of proudly owning and working manufactured residence communities, RV resorts and campgrounds. It owns 450 properties throughout North America, of which 225 are RV resorts, 202 are cell residence communities, and 23 marinas. Fairness LifeStyle Properties is a member of the S&P MidCap 400.
On September 5, Wells Fargo analyst James Feldman downgraded Fairness LifeStyle Properties from obese to equal weight. Fairness LifeStyle Properties misplaced 1% after the score downgrade.
Buyers ought to take into account that analysts usually are not all the time proper, and even the very best ones are solely proper about 50% of the time. Buyers shouldn’t rely solely on analysts and all the time do their very own analysis earlier than buying any inventory.
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This text REIT downgrades strike a gloomy note as September begins Initially appeared on Benzinga.com
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