Back to top

The Zacks Analyst Blog Highlights REIT Digital Realty Trust, industrial REIT Prologis, REIT Simon Property Group and REIT Essex Property Trust

Read MoreHide Full Article

For Immediate Release

Chicago, IL – August 21, 2017 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include REIT Digital Realty Trust, Inc. (NYSE:DLR Free Report), industrial REIT Prologis, Inc. (NYSE:PLD Free Report), REIT Simon Property Group, Inc. (NYSE:SPG Free Report) and REIT Essex Property Trust, Inc. (NYSE:ESS Free Report).   

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday’s Analyst Blog:

REITs’ Record Growth in Q2 FFO, Occupancy Remains High

With the Q2 earnings season on its last leg, this is the right time to gauge the performance of the real estate investment trust (REIT) industry.

Admittedly, rate hikes and a cautious approach of investors have affected gains in this industry so far this year. However, investors need to keep in mind that operating performance of this special hybrid asset is highly determined by the dynamics of the individual asset categories. A number of asset categories displayed strength in second-quarter 2017, with the economy and the job market showing signs of recovery.

In fact, per a NAREIT media release, occupancy rates remained high in the second quarter, while funds from operations (“FFO”), a widely used metric to gauge the performance of REITs, reported growth.

Specifically, the Q2 scorecard reveals that the total FFO of the listed U.S Equity REIT industry of $15.6 billion in the reported quarter increased 7.9% sequentially. The figure also came in 7.3% higher than the prior-year quarter tally.

Same-store net operating income (NOI) reported 3.3% year-over-year growth. Results were driven by segments like Single Family Homes, Data Centers and Manufactured Home Communities, which witnessed robust same-store NOI growth of 6.8%, 5.8% and 5.7%, respectively.

Furthermore, properties owned by the listed Equity REITs enjoyed solid occupancy levels. In fact, the occupancy rate remained unchanged at 93.4%, slightly below the record high occupancy rate of 93.7% recorded in the third and fourth quarters of 2016.

Admittedly, growth in cloud computing, Internet of Things and big data is not only helping tech companies, but also driving demand for data center REITs. Moreover, the industrial asset category hogged the limelight for experiencing high demand, with the economy and job market displaying signs of recovery, ecommerce gaining strength, and the manufacturing environment remaining healthy.

Also, the residential real estate market benefited from healthy demand levels and a delay in deliveries that kept the supply number in check. No doubt, the shrinking mall traffic and store closures amid aggressive growth in online sales kept retail REITs on tenterhooks. However, retail REITs managed to grab attention from new and productive tenants, and were able to replace with the ones which departed.

Among the S&P 500 REIT constituents, data center REIT Digital Realty Trust, Inc. (NYSE:DLRFree Report) and industrial REIT Prologis, Inc. (NYSE:PLDFree Report) delivered better-than-expected results in the quarter, with positive surprises of nearly 3.4% and 7.7%, respectively, in terms of FFO per share. Also, retail REIT Simon Property Group, Inc. (NYSE:SPGFree Report) and residential REIT Essex Property Trust, Inc. (NYSE:ESSFree Report) surpassed estimates, registering positive surprise of 1.2% and around 1.7%, respectively.

Currently, Digital Realty, Prologis, Simon Property Group and Essex Property carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

4 Surprising Tech Stocks to Keep an Eye On

Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without. More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really takes off.

See Stocks Now>>

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.

Get the full Report on DLR - FREE

Get the full Report on PLD - FREE

Get the full Report on ESS - FREE

Get the full Report on SPG - FREE

Follow us on Twitter:

Join us on Facebook:

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit information about the performance numbers displayed in this press release.

More from Zacks Press Releases

You May Like