REIT Earnings Preview: Here's What We're Watching
Real estate earnings season kicks into gear this week, and over the next month, we'll hear results from 175 equity REITs, 40 mortgage REITs, and dozens of housing industry companies.
Real estate equities - the sector with perhaps the most to gain from a moderation in inflation and normalization in Fed monetary policy - enter earnings season with wind in their sails.
Obscured by macro headwinds, REITs delivered a solid first quarter of earnings results fueled by buoyant rent growth. This report discusses the major high-level themes we'll be watching across second quarter results.
Expenses and margins will be a key focus amid broader disinflationary impacts on revenues. A reversal from last quarter, upside guidance revisions to Net Operating Income ("NOI") are more likely to be driven by lower expense expectations.
Access to capital is also a focus amid expectations that capitulation from debt-burdened private portfolios will create consolidation opportunities for well-capitalized REITs. Public REITs' access to equity capital could become a major competitive advantage if debt markets remain tight.
