Ola Ξlixir
AI Engineer, Building Vano, Web3 Growth
Office landlords Boston Properties, Vornado and SL Green are exposed if hantavirus fear dominates the next 60-90 days, whether or not a lockdown happens, since markets react to perception before confirmed reality. Fear alone shifts attention, behavior and capital flows. In a pandemic scare, work-from-home stocks are among the first panic plays, and COVID pushed remote work adoption forward almost overnight. x.com
Highwoods Properties is the favorite office REIT because new office supply has dried up, making its prime Sun Belt buildings scarcer and giving it pricing power. It signed over 1mm square feet of second-generation leases in Q2 with GAAP spreads above 20%, and occupancy rose 70 basis points. Debt-to-EBITDA fell to 6.2x, and it was the only office REIT not to cut its dividend in the GFC. Consensus 12% growth in 2027 plus a 6.4% yield implies about 20% total returns with no multiple expansion. … Show more
The US large-cap correction isn't over until interest rates top and bonds bottom, which hasn't happened yet. The summer 2023 S&P 500 correction ended right when bonds bottomed in October, with TLT trading massive upside volume, and there is no sign of that now. Higher rates keep pressuring real estate, where lots of money has been trapped since 2022, a possible source of downside dislocation, and an aggressive further rise in rates could bring a panic bottom. x.com x.com x.com x.com x.com x.com
High Treasury yields keep US real-estate stocks from being a buy yet, despite a record low against the S&P 500. Each hike pushes the sector lower; the 10-year yield above 5% argues for waiting rather than assuming rotation is inevitable. A turn likely needs falling rates, perhaps a first cut or the 10-year back below 4%. x.com x.com x.com x.com x.com x.com x.com x.com x.com x.com
Hudson Pacific Properties is a levered play on AI companies, with tech office space at a clear inflection. Higher prices and occupancy are coming. x.com
Real estate stocks suffer badly as interest rates rise, and the sector needs help or its 50-day moving average will be taken out. Welltower, the sector's largest name, is starting to struggle to sustain its parabolic move. x.com
Brookfield Corporation is not enticing near current valuations because of its accounting practices, of which office real estate is only the tip of the iceberg. @NickNemo17 notes Brookfield uses IFRS fair value for investment properties, so depreciation mostly disappears and investors must trust management's marks; before BPY was taken private it showed $321M of depreciation against about $100B of real estate. x.com
