Economics, Housing, & Commercial Real Estate Analysis

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  • Alex Pettee, CFA

Dividend Cuts Pressure REITs [Daily Recap]

  • U.S. equity markets finished lower on Friday, erasing most of their weekly gains following a disappointing slate of earnings results from Amazon and Apple amid continued coronavirus-related uncertainty. Following declines of 0.9% yesterday, the S&P 500 finished lower by 2.7% while the Dow Jones Industrial Average declined by 620 points following yesterday's 290 point decline. Real estate equities finished lower for the second-straight day but clung to weekly gains as the broad-based Equity REIT ETFs declined by 3.4% while Mortgage REITs declined by 2.6%. Equity and Mortgage REITs each outperformed this week as earnings season has generally been in-line or slightly better than expectations, but dividend cuts are mounting. 28 out of 165 Equity REITs have cut dividends since the start of the pandemic. Next week, we'll hear earnings results from roughly 50% of Equity and Mortgage REITs. We'll have a full preview of what to watch for in our Weekly Outlook report published tomorrow morning.

Real Estate Daily Recap

U.S. equity markets finished lower on Friday, erasing most of their weekly gains following a disappointing slate of earnings results from Amazon (AMZN) and Apple (AAPL) amid continued coronavirus-related uncertainty. Following declines of 0.9% yesterday, the S&P 500 ETF (SPY) finished lower by 2.7% while the Dow Jones Industrial Average (DIA) declined by 620 points following yesterday's 290 point decline. Real estate equities finished lower for the second-straight day but clung to weekly gains as the broad-based Equity REIT ETFs (VNQ) (SCHH) declined by 3.4% while Mortgage REITs (REM) declined by 2.6% ahead of the busiest week of REIT earnings season. 

We've now tracked 28 equity REITs in our universe of 165 names to announce a cut or suspension of their dividends in addition to the roughly half of mortgage REITs (20 out of 41) that have announced dividend cuts thus far.

Click here to read the full report on Seeking Alpha!

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