And So Q2-21 REIT Earnings Season Officially Begins

Hail the conquering hero.

I guess the worst naysayers out there have to sit down and eat their crow about Tesla (TSLA). Elon Musk’s baby reported Q2 earnings on Monday, and what a pretty picture it made.

Revenue was expected at $11.37 billion… yet came in at $11.96 billion. And adjusted earnings per share were expected at $0.97… yet came in at $1.45.

That’s with the chip shortage and several instances where China dropped its iron fist down on the company.

Now, don’t misunderstand me. I’m still not justifying the 743% jump its stock took last year. That’s just ridiculous for a company that had only begun turning a profit.

Still, I’ll tip my hat to Tesla’s good news… even while I steer away from it for more value-oriented investment opportunities.

In so doing, I find that New York City hotels just had their busiest week since the shutdowns began. Millionacres reports:

“For the week of July 12, New York City hotels sold more than 481,000 room nights, representing an increase of 17,000 from the previous week, announced Mayor Bill de Blasio. The mayor is also confident that the city is well on its way to surpassing its weekly goal of 500,000 room nights.”

That’s still far off its previous norms, of course. And, as the article also notes, “In June, the occupancy rate at open NYC hotels was 63%, down from 90% during the summers of 2018 and 2019.” But even so, considering my own (non-hotel) investments in that famed locale, I’m watching such numbers closely.

So I’ll be sure to keep you updated as I digest the incoming information accordingly.

The World According to REITs

Yesterday, my REIT-specific newsfeed was filled with headlines like: “Is a Surprise Coming for Extra Space Storage (EXR) This Earnings Season?”

And then there was this one: “Why Equity Residential (EQR) Might Surprise This Earnings Season.”

That’s because Q2-21 REIT earnings season is officially here. Of course, then, everyone is wondering what it will bring our way.

Here’s a bit of what we definitely know so far:

  • Universal Health Realty Income Trust (UHT) reported a net income of $6.6 million, which is $0.48 per diluted share. That’s compared to $4.7 million, or $0.34 per diluted share the same time last year. Funds from operations (FFO), meanwhile, were $12.6 million, or $0.92 per diluted share compared to $11.4 million, or $0.83 per diluted share.
  • KKR Real Estate Finance Trust (KKR) released its second-quarter results, showing a net income of $31.1 million, or $0.52 per share. Earnings were $0.54 per share after adjusting for non-recurring costs, and adjusted revenue was $40.2 million. It also acquired three self-storage properties across Austin, Texas; and Nashville, Tennessee, totaling 1,800 storage units for about $36 million.
  • Sun Communities (SUI) saw Q2 revenue come in at $603.9 million, a 99.1% increase over last year’s $303.3 million. Net income, meanwhile, rose 88% to around $110.8 million ($0.98 per diluted common share). And core FFO was $1.80 per diluted share, up 60.7% year-over-year.

Also worth noting is how Brookfield Property REIT (BPYU) has officially been swallowed up by Brookfield Asset Management (BAM). The acquisition was completed yesterday, which means there’s one less REIT out there for us to evaluate.

For now, that is.

More IPOs should be happening as 2021 continues to unwind. So we should see our list refilled before long.

In the meantime, here’s how existing ones performed on Monday…

(Source: The Daily REITBeat)

Brad Thomas is the Editor of the Forbes Real Estate Investor.

Disclaimer: This article is intended to provide information to interested parties. As ...

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