Ugly week for #REITs. Bought the CA heavy stuff hard today:
$KRC -10.7% overall cap. Office is 13+% stripping out MF/LifeSci @ 6.
$ARE -6.5%
$ESS -5.9%; 370k/door
$EQR -6.1%; $372k/d
I $SIVB $FRC $SBNY $PACW doesn't sink the SF Bay/CA economy
non CA:
$MAA -5.9%; $218k/d
$KRC -10.7% overall cap. Office is 13+% stripping out MF/LifeSci @ 6.
$ARE -6.5%
$ESS -5.9%; 370k/door
$EQR -6.1%; $372k/d
I $SIVB $FRC $SBNY $PACW doesn't sink the SF Bay/CA economy
non CA:
$MAA -5.9%; $218k/d
I'm implicitly betting the the troubled banks don't F up the golden goose of the SF Bay /LA VC ecosystem. Yes many wannabe unicorns had deposits there but I believe recoveries will be 80%+ of funds. Might lead to some incremental job losses but not the end of the world
I am concerned about general banking problems (which could continue to spill into RE and/or REIT). $BAC appears to have $100+ BN in unrecognized Held to Maturity securities. Others must as well. Could get ugly out there.
But the balance sheets of the REITs are solid. Having access to the corporate debt market is a big advantage. REITs don't need the banks. In general, REIT leverage is low. Most of the debt is fixed rate, long-term. Supply is manageable.
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