Summary
- "Did the rent get paid? How about the mortgage?" Earnings season kicks off this week with more than 175 REITs and 100 housing-related companies reporting earnings over the next month.
- Buckle up. On what will surely be the most newsworthy earnings season in a decade, REIT earnings should provide pivotal information on rent collection and future dividend plans.
- While some REITs have provided mid-quarter updates and preliminary earnings results, this is the first update we'll hear from the majority of companies since the start of the coronavirus pandemic.
- Residential REITs are expected to report relatively limited issues with rent collection. The same can't necessarily be said about other commercial real estate sectors, particularly retail REITs.
- Most REITs entered the COVID-19 crisis on solid footing, but some of the more highly levered small-cap REITs may have been caught swimming naked. We'll find out soon.
- This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »
Real Estate Earnings Preview
REIT earnings should provide pivotal information on rent collection and future dividend plans on what will surely be the most newsworthy and potentially volatile earnings season in at least a decade. While some REITs have provided mid-quarter updates on rent collection and balance sheet health, this is the first update we'll hear from the majority of companies since the start of the coronavirus pandemic. As discussed in the article titled "REITs: This Time Is Different", most commercial equity REITs and housing-related companies entered the COVID-19 crisis on solid footing following a decade of conservative decision-making and prudent balance sheet management, but we'll find out if any of the more highly levered small-cap REITs have been caught swimming naked.
(Hoya Capital Real Estate, Co-Produced with Brad Thomas)
Real Estate Earnings Calendar
Earnings season kicks off this week in the real estate sector with more than 175 REITs and 100 housing-related companies reporting earnings over the next month. Below, we compiled the notable earnings that we’re watching across the residential and commercial real estate sectors, which we will update throughout earnings season in our Real Estate Weekly Outlook, and we'll also have real-time coverage on the iREIT on Alpha marketplace. (Note that REITs that have not yet announced an earnings date are in italics with an estimated data based on past earnings seasons.)
(Source: Company Filings, Seeking Alpha)
What To Watch For in Residential Sectors
Apartments: Housing is the ultimate "essential service" amid the pandemic and mandated stay-at-home orders. 2020 was shaping up to be a strong year for multifamily operators before the COVID-19 outbreak. While "rent strikes" were a clickable media headline, the vast majority of apartment renters did indeed pay their April rent, according to preliminary updates from Equity Residential (EQR) and Camden Properties (CPT), particularly in the higher-rent segments. If trends from the Financial Crisis hold, a coronavirus recession would support rental household formations, which will be needed to support the large supply pipeline. We're watching for updates on rent collection, rental growth trends, and commentary on construction and supply conditions.
