👋 Happy Friday, Everyone. Wow, quite the week! A slew of REIT downgrades put a temporary damper on the recent rally early in the week, but a soft CPI report on Tuesday and the FED talking three rate cuts for 2024 on Wednesday put the spark back into the REIT sector big time.

In this issue, we also have Elliott Investment Management forcing the removal of a major REIT’s CEO and Christmas coming early for one hotel REIT. And wait until you see the REIT winners this week. REIT on!

JOIN OUR WEBINAR: DEC 21

Real Estate Reimagined: Capitalizing on Unique Opportunities in a Changing Market

Join us on December 21st for an insightful webinar hosted by Benzinga, dedicated to the dynamic world of real estate investing. Our expert panel, featuring the most innovative industry leaders, will guide you through the intricacies of the current market and the unique opportunities available to retail investors. 

Learn about the various types of passive real estate investments that are currently showing the greatest potential, and how virtually any investor can take advantage of the benefits that investing in real estate provides. 

This session is a must-attend for anyone looking to capitalize on the opportunities available in today's real estate market. Don't miss this chance to gain valuable insights and strategies from top industry leaders.

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REIT ROUND-UP

Digital Realty Trust Inc (NYSE: DLR) December 7, announced a $7 billion joint venture with Blackstone Inc (NYSE: BX) to acquire a 20% interest in four Hyperscale Data Centers. Digital Realty will manage the day-to-day operations of these centers.

Arbor Realty Trust Inc (NYSE: ABR) December 11, announced its Board of Directors has approved an increase to its share repurchase program to repurchase up to $150 million of its outstanding common stock with no time limit and may be suspended, modified or discontinued at any time.

RPT Realty (NYSE: RPT) December 12, announced its shareholders have approved the August 28, 2023 proposal for the merger with Kimco Realty Corp (NYSE: KIM) and several of its subsidiaries.

Arlington Asset Investment Corp (NYSE: AAIC) December 12, announced its shareholders have voted to approve the proposed May 29, 2023 merger with Ellington Financial Inc (NYSE: EFC).

INSIDER PURCHASES

National Storage Affiliates Trust (NYSE: NSA) December 8, SEC filing revealed that on December 5, Arlen Dale Nordhagen, Vice Chairman of National Storage Affiliates, purchased 10,000 shares of common stock for a total value of $359,000.

Agree Realty Corporation (NYSE: ADC) December 11, President/CEO Joey Agree purchased 1,350 shares of common stock @ $58.47 per share for a total of $78,934.50.

Ryman Hospitality Properties Inc (NYSE: RHP) December 11, Director/Executive Chairman of the Board, Colin V. Reed, purchased 19,284 shares of common stock at an average price of $105.82, for a total of $2,040,633.

DIVIDEND NEWS

CubeSmart (NYSE: CUBE) December 7, announced an increase in its quarterly dividend from $0.49 to $0.51 per share, payable on January 16, 2024 to shareholders as of January 2. The ex-dividend date is December 29.

Universal Health Realty Income Trust (NYSE: UHT) December 7, announced an increase in its quarterly dividend from $0.72 to $0.725 per share, payable on December 29 to shareholders as of December 19. The ex-dividend date is December 18.

Invitation Homes Inc (NYSE: INVH) December 8, announced a 7.7% increase in its quarterly dividend, from $0.26 to $0.28 per share, payable January 19, 2024, for shareholders of record on December 27. The ex-dividend date is December 26.

Farmland Partners Inc (NYSE: FPI) December 12, announced a one-time special dividend of $0.21 per share of common stock and Class A Common OP Unit, payable January 12, 2024 to shareholders of record on December 29, 2023. The dividend comes from aggregate gains from assets sold this year.

Realty Income Corp (NYSE: O) December 12, announced an increase in its monthly cash dividend from $0.2560 to $0.2565 per share. The dividend is payable on January 12, 2024 to shareholders of record as of January 2, 2024. The ex-dividend date is December 29, 2023. The new annualized dividend amount of $3.078 presently yields 5.64%. This was the 123rd dividend increase since 1994 and the 105th consecutive quarter of dividend increase.

Mid-America Communities Inc (NYSE: MAA) December 12, announced it’s increasing its quarterly dividend from $1.40 to $1.47 per share, payable January 31 for shareholders as of January 12, with an ex-dividend date of January 11.

📈 Biggest Winners This Week: Office, Office, Office

• Macerich Co (NYSE: MAC) Up 20.65%

• City Office REIT Inc (NYSE: CIO) Up 18.58%

• Hudson Pacific Properties Inc (NYSE: HPP) Up 18.47%

• Medical Properties Trust Inc (NYSE: MPW) Up 18.41%

• JBG SMITH Properties (NYSE: JBGS) Up 15.88%

• Hannon Armstrong Sustnbl Infrstr (NYSE: HASI) Up 15.21%

• Arbor Realty Trust (NYSE: ABR) Up 14.81%

• Innovative Industrial Properties Inc (NYSE: IIPR) Up 14.54%

• Boston Properties, Inc (NYSE: BXP) Up 13.43%

📉 Biggest Losers This Week: Not many!

• Ashford Hospitality Trust, Inc (NYSE: AHT) Down 4.78%

• Clipper Realty Inc (NYSE: CLPR) Down 1.62%

• Getty Realty Corp (NYSE: GTY) Down 1.40%

• Crown Castle Inc (NYSE: CCI) Down 1.25%

  Prices as of December 14, 12:00 PM

UPGRADES:

NetSTREIT Corp (NYSE: NTST) December 11, Mizuho Securities analyst Haendel St. Juste upgraded Netstreit from Buy to Neutral and raised the price target from $15 to $18.

Realty Income Corp: December 11, Mizuho analyst Haendel St. Juste upgraded Realty Income from to Buy and set a $58 price target. Also, December 13, Exane BNP Paribas analyst Nate Crossett upgraded Realty Income from Neutral to Outperform and announced a $63 price target.

Extra Space Storage Inc (NYSE: EXR) December 12, Wells Fargo analyst Eric Luebchow upgraded Extra Space Storage from Underweight to Overweight and raised the price target from $120 to $155.

Mfa Financial Inc (NYSE: MFA) December 13, Keefe, Bruyette & Woods analyst Bose George upgraded Mfa Financial from Market Perform to Outperform and announced a $12 price target.

Sunstone Hotel Investors Inc (NYSE: SHO) December 14, JP Morgan analyst Joseph Greff upgraded Sunstone Hotel Investors from Underweight to Neutral and raised the price target from $9 to $10.

Ryman Hospitality Properties Inc (NYSE: RHP) December 14, JP Morgan analyst Joseph Greff upgraded Ryman Hospitality Properties from Underweight to Neutral and raised the price target from $89 to $102.

Host Hotels & Resorts Inc (Nasdaq: HST) December 14, JP Morgan analyst Joseph Greff upgraded Host Hotel & Resorts from Underweight to Neutral.

Park Hotels & Resorts Inc (NYSE: PK) December 14, JP Morgan analyst Joseph Greff upgraded Host Hotel & Resorts from Underweight to Neutral.

…AND DOWNGRADES:

Apple Hospitality REIT Inc (NYSE: APLE) December 8, Wells Fargo analyst Dori Kesten downgraded Apple Hospitality REIT from Overweight to Equal-Weight and announced a $17 price target.

Diamondrock Hospitality Co (NYSE: DRH) December 8, Wells Fargo analyst Dori Kesten downgraded Diamondrock Hospitality from Overweight to Equal-Weight and announced a $9 price target.

Sunstone Hotel Investors Inc (NYSE: SHO) December 8, Wells Fargo analyst Dori Kesten downgraded Diamondrock Hospitality from Equal-Weight to Underweight and announced a $9.50 price target.

Vornado Realty Trust (NYSE: VNO) December 11, Evercore ISI Group analyst Steve Sakwa downgraded Vornado Realty from In-Line to Underperform and raised the price target from $23 to $28.

National Storage Affiliates Trust: December 11, Evercore ISI Group analyst Steve Sakwa downgraded National Storage Affiliates from In-Line to Underperform and raised the price target from $32 to $35.

CubeSmart: December 11, Evercore ISI Group analyst Steve Sakwa downgraded CubeSmart from Outperform to In-Line and raised the price target from $42 to $43.

Gaming and Leisure Properties Inc (Nasdaq: GLPI) December 11, Mizuho analyst Haendel St. Juste downgraded Gaming and Leisure Properties from Buy to Neutral and lowered the price target from $50 to $47. December 14, JP Morgan analyst Joseph Greff downgraded Gaming and Leisure Properties from Overweight to Neutral and announced a $48 price target.

Agree Realty Corporation: December 11, Mizuho analyst Haendel St. Juste downgraded Agree Realty from Buy to Neutral and lowered the price target from $67 to $61. Also, December 13, Exane BNP Paribas analyst Nate Crossett downgraded Agree Realty from Outperform to Neutral and announced a $64 price target.

Equity Residential (NYSE: EQR) December 11, Mizuho analyst Haendel St. Juste downgraded Equity Residential from Buy to Neutral and lowered the price target from $62 to $58.

Public Storage (NYSE: PSA) December 12, Wells Fargo analyst Eric Luebchow downgraded Public Storage from Overweight to Equal-Weight and announced a $280 price target.

NetSTREIT Corp (NYSE: NTST) December 13, Exane BNP Paribas analyst Nate Crossett downgraded Netstreit from Outperform to Neutral and announced a $17 price target.

ONE BIG THING

Elliott Investment Management Scores A Huge Victory Over Crown Castle

What: A few weeks ago, we brought you the story that on November 27, Elliott Investment Management announced they now owned $2 billion worth of Crown Castle Inc (NYSE: CCI) stock and had sent a letter to the Board of Directors, expressing disappointment at the ongoing underachievement of the company versus its peers and calling for the resignation of CEO/Director Jay Brown and a shakeup of the Board.

On the early morning of December 7, Elliott Investment announced yet another letter to the Board, pledging to nominate a new board if the present board is unwilling to make necessary leadership changes.

Well, it didn’t take long for Elliott to receive a response to its threat. After the closing bell, Crown Castle announced the “retirement” as of January 16, of Jay Brown, who is only about 50 years old. As of January 16, Anthony Melone will become the Interim CEO, while the Board searches for a permanent CEO.

Interestingly, in the Crown Castle news release, it said that CEO Brown had informed the Board on December 6 of his decision, but Crown Castle chose not to announce this before the end of trading on December 7.

Takeaway: This is a huge victory for Elliott Investment Management, not only because they pressured the Crown Castle Board into forcing CEO Brown out, but because Crown Castle shares had rallied from $103 to $116 since the initial letter from Elliott Investment was announced. With Elliott Investment holding $2 billion worth of Crown Castle stock, their own actions brought them a huge share price gain as well.

The ramifications of these events are enormous. Given Elliott Investment’s success, in the future we are likely to see more large investment management and hedge funds who hold sizeable positions in a company, pressuring boards whom they perceive as underperforming.  And one has to wonder how the Securities and Exchange Commission (SEC) feels about activist investors with huge stock positions who pressure and intimidate company boards into actions that ultimately lead to a huge windfall.  

ONE FOR THE ROAD

Park Hotels & Resorts Plays Santa Claus

Briefly: Park Hotels & Resorts Inc (NYSE: PK) is a Tysons, VA based hotel REIT with 43 hotels and resorts comprising over 26,000 rooms. 36% of its hotels are located in Hawaii and the rest are in other prime U.S. markets.

What: On November 1, Park Hotels announced that it will be paying a special 4th quarter cash dividend of $0.77 per share due to the exit from the Hilton San Francisco Hotels, which resulted in a required additional distribution. The special dividend will be paid on January 16, 2024 to shareholders of record as of December 29.

But Wait, There’s More: On December 1, Park Hotels announced an additional fourth quarter dividend of $0.93 per share, which includes its regular $0.15 quarterly dividend plus another $0.78 “top off” dividend, based upon 2023 operating results. These dividends will also be paid on January 16, 2024 to shareholders of record as of December 29, 2023. The ex-dividend date for all three dividends is December 28. In total, the regular plus special dividends will more than double Park Hotels’ 4.16% annual dividend yield.

But these dividends aren’t the only holiday gifts from Park Hotels. On November 1, Park Hotels announced its Q3 operating results. FFO of $0.51 beat the analyst estimates of $0.43 and was an increase from $0.42 year-over-year. Revenue of $679.00 million beat the street estimate of $668.13 million and was 2.6% above revenue in Q3 2022.

On November 6, Barclays analyst Anthony Powell upgraded Park Hotels from Equal-Weight to Overweight and raised the price target form $16 to $19. Since then, analysts from Morgan Stanley and Wells Fargo have both maintained Equal-Weight ratings on Park Hotels, while raising price targets to $13 and $15 respectfully.

Takeaway: Meanwhile, shares of Park Hotels, which were $11.53 just prior to the Q3 earnings report, have now rallied 31.66% to a recent close of $15.42. It was the best performing hotel REIT in November with a 28.62% return and continues to perform well thus far in December.

No doubt about it, Santa Claus has arrived early this year for thousands of Park Hotels’ investors!

JOIN OUR WEBINAR: DEC 21

Real Estate Reimagined: Capitalizing on Unique Opportunities in a Changing Market

Join us on December 21st for an insightful webinar hosted by Benzinga, dedicated to the dynamic world of real estate investing. Our expert panel, featuring the most innovative industry leaders, will guide you through the intricacies of the current market and the unique opportunities available to retail investors. 

Learn about the various types of passive real estate investments that are currently showing the greatest potential, and how virtually any investor can take advantage of the benefits that investing in real estate provides. 

This session is a must-attend for anyone looking to capitalize on the opportunities available in today's real estate market. Don't miss this chance to gain valuable insights and strategies from top industry leaders.

Click here to register