We are tweaking our positioning in the Industrial/Logistics subsector a bit, moving EastGroup Properties (EGP), micro-cap Plymouth REIT (PLYM) and Rexford (REXR) to the Long Bench, and Industrial Logistics (ILPT) to the Short Bench for Quad 2 in Q4. Over a Tail Duration we think that EGP is one of the more interesting Industrial names along with REXR on the long side, and will be doing some additional work in the coming weeks/months.
As can be seen in Figure 1 below, we are skewed on the long side within Industrial towards the shortest weighted average lease duration as measured by portfolio square feet (SF) or annual base rent (ABR), where the REITs are best-positioned to capture exceptionally high leasing spreads at a faster clip. We are using the longer duration Industrial names as a source of funds here. PLD is screening as a consensus long and does not possess the most favorable style factor exposures here, but at the same time there is no fundamental reason to even think about shorting, so we are going to revisit as a Quad 4 name when the time comes.
Figure 1: Wtd. Avg. Lease Duration for Industrial REITs (SF & ABR as Available)
Source: Company Reports
Figure 2: Updated Hedgeye REITs Position Monitor
Figure 3: Hedgeye REITs Sentiment Monitor
Prior Notes:
10.19.21 - VIDEO | American Homes 4 Rent (AMH) Thesis
10.19.21 - REITS DAILY BRIEF | 10.19.21 | (COLD, SLG, VNO, AMH, U.S. Office Utilization)
10.18.21 - REITS DAILY BRIEF | 10.18.21 | (PLD)
10.17.21 - SUNDAY NIGHT REIT READ | 10.17.21 | (PLD, POSITION MONITOR)
10.15.21 - REIT RECAP | 10/15/21 | PLD 3Q21 RESULTS
10.13.21 - REITS DAILY BRIEF | 10.13.21 | (PLD)
10.10.21 - SUNDAY NIGHT REIT READ | 10.10.21 | (POSITION MONITOR UPDATE)
10.8.21 - BLACK BOOK ROUND-UP | AMERCO (UHAL)
10.7.21 - BEST IDEA ROUND-UP | AMERICOLD REALTY TRUST (COLD)
Please e-mail with any questions.
Rob Simone, CFA
Managing Director
Twitter: @HedgeyeREITs
