Ralf Hahn
A total of 20 out of 31 S&P 500 real estate companies reported quarterly results this week. The Real Estate Select Sector SPDR Fund ETF is down 5.4% QTD, while SPY is 3.3% lower.
Of the 11 S&P sectors, real estate is the only one that has been lower so far in 2024. As investors push back their near-term rate cut expectations, the sector’s disciplined balance sheet is expected to keep them reasonably well-insulated.
Last week saw some big real estate names deliver solid earnings growth, including Alexandria Real Estate Equities (ARE), Equity Residential (EQR), CoStar Group (CSGP), Healthpeak Properties (DOC), AvalonBay Communities (AVB) and Weyerhaeuser (WY). The trend continued this week.
Among the 20 companies that reported, 16 posted an earnings beat, while four reported a miss. A total of 14 of the reporting companies exceeded revenue consensus, while six trailed expectations.
Below are the latest quarterly results for five industry giants.
American Tower (AMT) gained 1.7% in Tuesday premarket trading after Q1 earnings easily beat the average analyst estimate and the telecom towers owner raised its 2024 guidance for earnings and adjusted EBITDA.
Iron Mountain (IRM) posted stronger-than-expected Q1 earnings and record revenue with strong performance in both its storage rental and services segments. The stock rose 1.2% in Thursday premarket trading.
Vici Properties’s (VICI) earnings and revenue both exceeded Wall Street consensus estimates as revenue continued rising and expenses held steady from a year ago. The stock rose 0.6% in Wednesday after-hours trading.
Digital Realty Trust (DLR) turned in Q1 core funds from operations on Thursday that surpassed the Wall Street consensus as “strong demand supported a new leasing record, driven by large footprint deals,” President and CEO Andy Power said. DLR was rising ~6% Friday noon.
Federal REIT (FRT) delivered in-line Q1 FFO and revenue that exceeded consensus estimates, while the 2024 FFO guidance were in line with expectations. The stock was, however, trading lower on Friday after the results were announced Thursday post market.
QTD, 27 out of the 31 real estate companies have reported earnings.
At the industry level, three Health care REITs; one Hotel and Resort REIT; one Industrial REIT; two Office REITs; one company in the Real Estate Management & Development subsector; seven Residential REITs; three Retail REITs and nine Specialized REITs have posted their quarterly results.
Roughly 85.2% of the companies delivered an earnings beat, while ~14.8% missed consensus. In terms of revenue, about 70.4% beat expectations, and nearly 29.6% trailed the consensus.
For the upcoming week, five notable real estate companies scheduled to report results are Realty Income (O), Medical Properties Trust (MPW), Simon Properties (SPG), Innovative Industrial Properties (IIPR) and Healthcare Realty (HR).
