Quote for Today:  

“If you’re saving, you’re succeeding.”

― Steve Burkholder

Source

The REIT earnings headlines are mixed this morning [Feb. 5], with the following three listed one right after another on Yahoo Finance:

1. “Omega Healthcare Investors (OHI) Q4 FFO Match Estimates”
2. “Monmouth Real Estate (MNR) Misses Q1 FFO and Revenue Estimates”
3. “Cedar Realty Trust (CDR) Q4 FFO and Revenues Surpass Estimates.”

(Emphasis added.)

For its part, Cedar owns 54 grocery-anchored shopping centers in high-density cities from D.C. straight up to Boston. On paper in the Covid-era, two out of three of those designations look downright awful.

Who wants to be in retail or big urban areas these days?

Truth be told, Cedar’s funds from operations did fall for the quarter year-over-year. It made $0.71 per share in Q4-20 as opposed to $0.73 in Q4-19. But that was still an intense amount better than the $0.59 Zacks was projecting.

I have to be clear that I am not recommending Cedar as a Buy at this point. Yet, the way I see it, these results do prove my repeatedly preached point that – pandemic or no pandemic – people still have to eat.

It also very much seems to indicate that select REITs remain worthwhile investment targets. And as for those reporting less impressive results, well, you have to take them on a case-by-case analysis.

Some of them, it’s true, might not recover for several quarters – maybe even several years. Others might not recover at all.

To state the obvious, the shutdowns and social distancing did a number on commercial real estate. There’s no other way of looking at it. Moreover, the damage was startlingly sudden and never seen before.

But as we’re seeing as February continues to roll out, there are success stories out there nonetheless. And I expect more ultimate winners than losers to emerge this year.

You just have to know where, when, and how to look.

The World According to Commercial Real Estate

With that goal in mind, here’s today’s news as powered by the Daily REITBeat:

• Essex Property Trust (ESS) announced Q4 core FFO of $3.02 per share and issued 2021 guidance of $11.86-$12.46. Same-property gross quarterly revenue fell 8% year-over-year, and net operating income (NOI) dropped an even more significant 12.7%. With that said, Essex repurchased 211,681 shares of common stock, totaling $46.3 million at an average price of $218.84 per share. And as of February 1, it had about $1.2 billion in liquidity through undrawn capacity on its unsecured credit facilities, cash, and marketable securities.
• Corporate Office Properties (OFC) reported Q4 AFFO of $0.56 per share, with expectations for $0.54-$0.56 in the first quarter and full-year guidance of $2.16-$2.22. Same-property cash NOI rose 1.6% last year, and its core portfolio was 94.3% occupied and 95% leased.
• CorEnergy Infrastructure (CORR) purchased Crimson Midstream Holdings, LLC, a regulated crude oil pipeline owner and operator for a considered value at around $350 million. The acquisition includes four critical infrastructure pipeline systems amounting to approximately 1,800 miles across northern, central and southern California.

So there’s that news. And here’s your top 10 summary of winners and losers in the REIT space:

(The Daily REIT Beat)