Self-Storage M&A • REIT Earnings • Fed Ahead
U.S. equity markets advanced Monday as investors parsed a soft slate of European economic data ahead of a jam-packed week of newsflow stateside, headline by the Fed's interest rate decision.
The Dow Jones Industrial Average rose for an 11th straight day- its longest winning streak since 2017- while the S&P 500 advanced 0.4% after closing at its highest-levels since April 2022.
Real estate equities were among the leaders today as the busy week of earnings reports began with some M&A developments in the storage space. The Equity REIT Index gained 0.8%.
Public Storage (PSA) gained after it announced a $2.2B deal to acquire Simply Self Storage from Blackstone's (BX) Real Estate Income Trust ("BREIT") for $2.2B - one of a half-dozen portfolio sales by BREIT since late 2022 and the latest example of public REITs capitalizing on Blackstone's struggles to meet withdrawal requests from investors.
Mortgage REIT Dynex Capital (DX) rallied 4% after kicking off mREIT earnings season with a solid report, noting that its Book Value Per Share ("BVPS") increased by 2.9% in Q2 while its comprehensive net income improved to $0.79/share - up from a negative number last quarter and now covering its $0.39/share dividend - driven by hedge gains.
Income Builder Daily Recap
U.S. equity markets advanced Monday as investors parsed a weak slate of PMI data across Europe ahead of a jam-packed week of newsflow stateside, headline by the Federal Reserve's interest rate decision on Wednesday. The Dow Jones Industrial Average rose for an 11th straight day - its longest winning streak since 2017 - while the S&P 500 advanced another 0.4% after closing at its highest-levels since April 2022 last week. Real estate equities were among the leaders today as the busy week of earnings reports began with some M&A developments in the self-storage space. The Equity REIT Index gained 0.8% today, with 13-of-18 property sectors finishing in positive territory, while the Mortgage REIT Index also gained 0.8%. Homebuilders rebounded after a skid last week ahead of earnings results from a half-dozen of the nation's largest builders in the week ahead.
Storage: Public Storage (PSA) gained after it announced a $2.2B deal to acquire Simply Self Storage from Blackstone's (BX) Real Estate Income Trust ("BREIT") for $2.2B - one of a half-dozen portfolio sales by BREIT since late 2022 as it struggles to meet withdrawal requests from investors. The portfolio consists of 127 wholly owned properties and 9M net rentable square feet located across 18 states and in markets, about 65% of which are in Sunbelt markets. We predicted earlier this year that the Simply Storage portfolio - which BREIT acquired in late 2020 - was among the most likely assets that BREIT would sell given its preference to avoid a mark-to-market event by "selling its winners and holding its losers." Four of the six "winners" in BREIT's portfolio are its casino holdings, two of which it has already sold (MGM Grand and Mandalay) and one of which (Bellagio) it is reportedly marketing for sale. The other two "winners" are the Simply Self-Storage portfolio and the GLP Jupier 12 industrial portfolio, which BREIT acquired in 2019.
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