Simon Property Group, Federal Realty Investment Trust, Prologis and Rexford Industrial Realty

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Chicago, IL – December 29, 2021 – Zacks.com announces the list of stocks featured on the Analyst Blog. Every day, Zacks Equity Research analysts discuss the latest news and events affecting stocks and financial markets. Stocks recently featured on the blog include: Simon Property Group, Inc. SPG, Federal Realty Investment Trust FRT, Prologis, Inc. PLD, and Rexford Industrial Realty, Inc. REXR.

Here are the highlights from Tuesday’s analyst blog:

4 REITs to Take Advantage of As Holiday Sales Rise

This year, the US holiday season has been an encouraging one for retailers and their owners – the retail REITs. This is because consumers not only splurged throughout the season, but also returned to stores.

According to a recent report from Mastercard SpendingPulse, holiday retail sales excluding automotive increased 8.5% year-on-year this holiday season, from November 1 to December 24. Although e-commerce continued to expand, increasing by 11.0% year-on-year, in-store sales also saw an 8.1% increase relative to 2020.

Clothing and department stores experienced strong growth from November 1 to December 24, and apparel registered a huge increase of 47.3% year-on-year. Department stores witnessed a 21.2% increase from last year and an 11% increase from pre-pandemic levels.

Steve Sadove, Senior Advisor to Mastercard and former CEO and President of Saks Incorporated noted that “shoppers were eager to secure their gifts before the retail rush, and conversations about supply chain and labor supply issues. they shipped to consumers online and to stores in droves. “

Obviously, with low unemployment, rising earnings backed by wage compensation, and huge savings accumulated during the pandemic, consumers had the money to splurge. Additionally, while people staying indoors had previously helped the e-commerce industry flourish, widespread vaccination renewed people’s confidence to leave their homes.

This translated into higher profits for real estate, particularly REITs. Higher retail sales, whether online or in physical stores, generate huge profits for these REITs, as a greater influx of public in malls and malls would create a greater demand for space, while online sales also need a real space for efficient storage and distribution.

Retailers are also using last-mile stores as indispensable fulfillment and distribution centers to serve the dense population nearby. This is also helping them outperform pure ecommerce players in terms of delivery times and profitability. Additionally, curbside pickup, combined with click-and-pick options, is likely to continue to gain attention in today’s environment. And REITs that are making efforts in this regard are likely to add a competitive advantage in today’s times.

Stock picks

To capitalize on this trend, we have selected four stocks from these high-performing industry groups. In addition to having strong fundamentals, these top-ranked REITs have a high chance of outperforming the market over the next 1-3 months. These stocks are also seeing positive revisions to estimates, reflecting the optimistic sentiment of analysts.

We suggest investing in Simon Property Group, which is a giant in the retail REIT industry and enjoys a portfolio of premium retail assets in the United States and abroad. Adopting an omnichannel strategy and successful partnerships with premium retailers have helped the company. It is also taking advantage of growth opportunities by helping digital brands improve their physical presence, as well as capitalizing on the purchase of bankrupt retail brands.

Additionally, Simon Property is exploring the mixed-use development option, which has gained immense popularity in recent years among those who prefer to live, work and play in the same area. Furthermore, with the strong balance sheet and capital res available, Simon Property Group appears poised to ride this growth curve and seize the opportunities arising from market dislocations.

In the third quarter, Simon Property posted higher lease volumes, occupancy gains, buyer traffic and retail sales. Simon Property also announced a 10% sequential increase in its 2021 fourth quarter dividend.

Simon Property Group currently has a # 1 Zacks Rank (Strong Buy). Over the past month, the Zacks Consensus Estimate for 2021 FFO per share witnessed an upward revision of 2.1% to $ 11.52, reflecting the bullish outlook from analysts.

Another retail owner is Federal Real Estate Investment Trust, a North Bethesda, MD-based retail REIT with a portfolio of premium retail assets, primarily located in major coastal markets from Washington, DC to Boston, San Francisco, and Los Angeles, along with a diverse tenant base , both national and local.

Federal Realty has strategically selected the first ring suburbs from nine major metropolitan markets. Due to the strong demographics and infill nature of its properties, the company has been able to maintain a high level of occupancy over the years.

Additionally, Federal Realty’s focus on the outdoor format and “The Pick-Up” concept has prepared it well to attract renters even amid the current health crisis. The resumption of the economy, widespread vaccination, and strong consumer spending have prepared the retail REIT to benefit from its superior assets in premium locations and experience an improved leasing environment.

FRT currently holds a Zacks # 1 rank and has a long-term growth rate of 9.9%. Additionally, for 2021, the stock has seen the Zacks Consensus Estimate for FFO per share revised 1.3% up to $ 5.43 over the past month. This also suggests an increase of 20.1% year-on-year.

The cart will be incomplete without industrial REITs, as this asset category is a huge beneficiary of the e-commerce boom and supply chain strategy transformations.

So our next pick is an industrial REIT stock: Prologis – a leading industrial REIT that acquires, develops, operates and manages industrial properties in the United States and around the world. The company continues to benefit from the scale of its platform.

The performance of this industrial giant REIT in recent quarters reflects strong demand for its properties, an increase in market rents and low vacancies. Along with the rapid adoption of e-commerce, logistics real estate is expected to benefit from an increase in inventory levels. Given Prologis’ ability to deliver high-quality installations in key markets and its strong balance sheet, you are well prepared to bet on these trends.

PLD currently has a Zacks Rank of 2 (Buy). The Zacks Consensus Estimate for current-year FFO per share has been marginally revised upward to $ 4.12 over the past two months. This requires an increase of 8.4% year-on-year.

The cart will be incomplete without another industrial REIT. A promising one on the shelf is Rexford Industrial Realty which focuses on the acquisition, ownership and operation of industrial properties located in the landfill markets of Southern California. Recently, Rexford announced the expenditure of $ 141.4 million for the acquisition of five industrial properties in the major infill submarkets of Southern California.

With these acquisitions, Rexford’s acquisition activity in 2021 reached $ 1.6 billion. Additionally, more than $ 350 million in acquisitions are under contract or an accepted offer. Southern California is considered a highly valued industrial property market with limited supply in the United States.

Rexford currently has a Zacks # 2 rank. The Zacks Consensus Estimate for FFO per share for the current year has been revised up 1.2% in the past two months. This also indicates a projected 23.5% year-over-year increase.

Note: All EPS numbers presented in this report represent funds from operations (“FFO”) per shar

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Past performance is not a guarantee of future results. Inherent in any investment is the potential for loss. This material is provided for informational purposes only and nothing contained herein constitutes legal, tax, accounting, or investment advice, or a recommendation to buy, sell, or hold a security. No recommendation or advice is given as to whether any investment is suitable for a particular investor. It should not be assumed that investments in identified and described securities, companies, sectors or markets were or will be profitable. All information is current as of the date of this document and is subject to change without prior 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 value. These returns come from hypothetical portfolios consisting of Zacks = 1 rank stocks that were rebalanced monthly with no transaction costs. These are not the returns from actual portfolios of stocks. The S&P 500 is an unmanaged index. Please visit https://www.zacks.com/performance for information on the performance figures shown in this press release.

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