REIT mafia members will know that there is a big industry conference this week, which we will be monitoring of course, followed by 3Q21 earnings season now upon us and then the virtual fall NAREIT conference immediately thereafter. In light of how quickly things will be moving, we wanted to lay out where we are going in 4Q21:
Plans for 4Q21:
- Black Book presentation on Americold Realty Trust (COLD) on Thursday, 10/7:
- Currently on Short Bench
- Unique asset in the public REIT market focusing on owning climate-controlled warehouses, and from a sentiment/positioning standpoint had been widely liked on the long side since coming public in 2018
- Recently several questions have emerged which we intend to explore - pace of growth vis-a-vis the "story" told, underperformance relative to expectations, COLD's unique and below-REIT average margin and ROIC profile, the "roll-up" nature of the business, COLD's international exposure, near- and intermediate-term status of the food supply chains, etc.
- Black Book presentation on Corporate Office Properties Trust (OFC) on Thursday, 10/28:
- Scarce "office" REIT that is less "office" and more "critical infrastructure," owing to its unique relationship with the U.S. Government in supporting critical defense/IT missions
- Among other items we will be exploring whether the company will finally be hitting an earnings growth inflection point beginning with 2021, following several years of "hamster wheel" effect on earnings from trimming regional office and non-core assets
- We will also be looking at OFC from a Macro perspective, particularly as an interesting Quad 4 stock (when the time comes) due to its above-average yield, low leverage and unmatched tenant quality (if the sky is falling, money printer still goes Brrrrrr and OFC gets its rent checks)
- By popular demand, we will be picking up coverage of the Data Center subsector (CONE, COR, DLR, EQIX) with a presentation in mid-to-late 4Q21:
- Starting our work now on what will be a new subsector for the team
- Very important as DLR and EQIX both crack the top-10 list of components in the XLRE
- Relevant for IRM and OFC as well, with both companies carrying data center businesses
Please call or e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
Cell:
