First, on the NY Football Giants...
Ok back to the grind.
Tickers: ILPT/MNR
Headline: Monmouth to be Acquired by ILPT for Approximately $4.0 Billion
MNR and ILPT announced this past Friday morning that ILPT would be acquiring MNR for $21/share, or a +11% premium to Thursday's close, in an all-cash deal expected to close in 1H22. Subscribers will recall that MNR had previously attempted to sell itself to EQC in an inferior and poorly executed stock/cash transaction that was voted down by shareholders. We had both ILPT & MNR on our Short Bench along with several other Logistics REITs, so we have to take an "L" here on the MNR side on this second go around. We were wrong in our thinking that MNR's process could be dead/stalled for the foreseeable future. Shares of ILPT traded -5.6% lower on Friday.
Apartment Rent Tracker
We are updating the Hedgeye Apartment Rental Rate Tracker (Figure 1 + PDF link below) for October transacted numbers just published. Some key takeaways:
- Sequential RoC slowdowns in most of the key REIT submarkets in the typically seasonally weak leasing period of October. Top gainers were Miami (+2.1%), New York City (+1.8%), San Diego/Fort Lauderdale/Charleston (each up +1.7%), and Phoenix (+1.5%). Top decliners were San Francisco (-1.0%), Birmingham (-0.8%) and San Jose (-0.4%).
- We would not read too much into the October sequential decelerations just yet, as it is typically a relatively weak seasonal leasing month as we enter the colder part of the year. In our view the story remains the 2-year stack on rental rate RoCs and why we remain Long the Coastal Gateway Apartment REITs AVB/EQR/ESS. Key markets for these REITs such as New York, Boston, and Seattle are just getting back to prior nominal peak levels on rental rates, and key California markets Los Angeles, San Francisco, Oakland and San Jose remain several months and even quarters behind the other key REIT submarkets in terms of their recovery. This has created a setup for these REITs to print some of the highest SSRev and SSNOI growth numbers in FY22 they have ever seen, a RoC acceleration by definition.
Figure 1: Y/Y RoC in Transacted Apartment Rents
PDF Link
Figure 2: Hedgeye REITs Position Monitor
PDF Link
Figure 3: Hedgeye REITs Sentiment Monitor
PDF Link
Prior Notes:
11.4.21 - REIT RECAP | 11.4.21 | AMH 3Q21 RESULTS
11.4.21 - REIT RECAP | 11.4.21 | CUBE 3Q21 RESULTS
11.4.21 - REITS DAILY BRIEF | 11.4.21 | (COLD, IRM, EARNINGS SURPRISE MONITOR)
11.3.21 - REITS DAILY BRIEF | 11.2.21 | (LSI, POSITION MONITOR UPDATE)
11.2.21 - REITS DAILY BRIEF | 11.2.21 | (PSA, U.S. OFFICE UTILIZATION)
11.1.21 - REIT RECAP | 11.1.21 | PSA 3Q21 RESULTS
10.31.21 - SUNDAY NIGHT REIT READ | 10.31.21 | (3Q21 EARNINGS SURPRISES, POSITION MONITOR)
10.28.21 - REIT RECAP | 10.28.21 | CPT 3Q21 RESULTS
10.28.21 - REITS DAILY BRIEF | 10.28.21 | (EXR)
10.28.21 - REIT RECAP | 10/28/21 | INVH 3Q21 RESULTS
10.28.21 - REIT RECAP | 10/27/21 | AVB 3Q21 RESULTS
10.27.21 - REITS DAILY BRIEF | 10.27.21 | (3Q21 Earnings, AVB, EXR, Office)
10.26.21 - REIT RECAP | 10/26/21 | EXR 3Q21 RESULTS
10.26.21 - REITS DAILY BRIEF | 10.26.21 | (EQR, REXR)
10.25.21 - SUNDAY NIGHT REIT READ | 10.24.21 | (POSITION MONITOR)
10.21.21. - REIT RECAP | 10/21/21 | REXR 3Q21 RESULTS
10.20.21 - REITS DAILY BRIEF | 10.20.21 | (EGP, PLYM, REXR, ILPT)
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
