REIT现实：2020年Q2总结
下面是小编为大家整理的REIT现实：2020年Q2总结,供大家参考。
The
REIT
Reality
2Q20
Mega
Wrap
#3,
33
REIT
Credit
Opinion
Updates
North America Credit Research 12
August
2020
2Q20 mega wrap #3, 33 REIT credit opinion updates: AMH (OW), BRX (OW), CBL (N), CBRE (N), OFC (OW), DLR (N), DHC (Issuer: UW, Structurally Senior: N), EPR (N), ESS (OW), FRT (N), HR (N), HTA (N), PEAK (Downgrading from OW to N), STAR (Downgrading from OW to N), KIM (Downgrading from OW to N), LSI (OW), CLI (Upgrading from UW to N), NNN (OW), OHI (N), O (N), DOC (OW), REG (OW), SBRA (OW), SVC (Issuer: N, Structurally Senior: UW), SPG (N), STWD (OW), STOR (OW), SKT (N), VTR (OW), VER (Downgrading from OW to N), VNO (N), WELL (OW), and WPC (OW). Yes, we’re tired. ...and 26 prior 2Q20 updates: Click here for the first edition of this report with the first
batch
of
REIT
credit
updates
(PLD,
SLG,
BDN,
FR,
ACC) and
here
for
the second edition (21 more updates). Key
themes
from
the
recent
earnings
reports:
Sunbelt
multifamily
markets outperforming the coasts (see below), rent collection trends improving for non-mall retail landlords (but
upfront reserves
to rent
charge offs were
common), industrial REITs can still do no wrong (several triple net lease REITs, like VEREIT, continue to invest in the sector), and office tenant rent collection surprisingly resilient. For the mall REITs specifically, how many more retailers will file (Ascena, Tailored Brands, Lord
&
Taylor,
Chico"s,
to
name
the
recent
handful)?
And
how
many
of
these retailers are worthy of being rescued by their deep pocket landlords? On this latter point, Simon noted that its Brooks Brothers and Lucky investments are anticipated to generate a significant near-term return on the limited capital required (<$50mm for both
at
effectively
~1x
forward
EBITDA).
Post
the
Simon
call,
the WSJ
reported that
the
Simon
venture
with
Authentic
Brands,
Sparc
Group,
increased
its
bid
for Brooks Brothers from $305mm to $325mm to win the deal and that it has committed to
retain
125
of
200
stores.
Meanwhile
J.
Crew
(parent
company
Chinos)
has reopened
95%
of
its
stores
after
securing
$130mm
in
rent
concessions
over
two years (originally plans called for 67 store closings but now only eight are planned, per Commercial Observer). Issuance
update ($25.1bn YTD,
~$34bn expected for
the full
year). YTD US$ HG Core REIT issuance is now ~$25bn, full tally inside. This week we have seen deals from ESS, KIM, HST, and GLPI (we do now count the lodging and gaming REITs with standard REIT covenants as core). Mid-BBB rated Agree Realty (retail triple net lease, low leverage) also
issued a debut public unsecured deal this week (10yr, +225bp). As we wrote last month, we expected REIT issuance to accelerate post
the
expiration
of
earnings
blackouts
–
and
we
doubt
we’re
done
yet
before Labor Day.
The capital markets for REITs
(and
most everyone else) remain wide open. REITs will continue to look to pay down revolving credit line balances. We also expect several to look to get in front of remaining 2021 and 2022 maturities as the year progresses (with some even eyeing dates further out the curve). The offset is lower than anticipated acquisition and development funding. REIT credit performance slowing after a torrid few months: Month to date, the
US
Credit
Research Mark
Streeter,
CFA
AC (1-212)
834-5086
mark.streeter@jpmorgan.com
Ian
B
Snyder
(1-212)
834-3798
ian.b.snyder@jpmorgan.com
J.P.
Morgan
Securities
LLC
See page 77 for analyst certification and important disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
www.jpmorganmarkets.com
broader
HG
market
has
generated
a
total
return
of
0.3%
and
an
excess
return
of 0.6%. Our last sector change was an upgrade from Neutral to
Overweight on May 28.
Since
May 28,
our
10yr
REIT
fitted
curve
is
106bp
tighter
while
the
broader market
is
only
52bp
tighter
(and
BBBs
specifically
63bp
tighter).
The
June performance for REITs, if you do the math, was rather stunning in terms of the snack back. That being said, check this out: since the pandemic was declared (11-Mar-20), our 10yr REIT fitted curve is still 9bp wider while the overall HG market is 58bp tighter (and
BBBs 63bp
tighter). REITs
were
slow
to
sell
off,
but
when
they did, they sold
off hard. Similarly,
the REIT credit recovery kicked in with a lag to the broader
market
recovery,
but
once
REITs
started
to
rally
(albeit
from
an
extreme oversold
starting
point),
the
sector
rallied
hard.
See
our
March
sector
downgrade note, here, and our May sector upgrade note, here, for perspective. Where does this leave us? For now, we remain Overweight: We expected a rather resilient tone from management teams as earnings kicked into high gear (despite the virus uncertainty) – and that has mostly played out. REIT credit valuation, as noted above,
has
rallied
since
the
end
of
May
but
has
still
lagged
materially
since
the pandemic declaration. Currently
our 10yr REIT
fitted
curve sits
at
182bp, slightly outside of the market BBB 10yr fitted curve (171bp). We typically (as we do now) find value in REIT credit when it trades at or near BBB levels. Post pandemic, and once ratings stabilize and begin to march back higher (and we realize this is NOT a story for 2020…or maybe even 2021), we will focus more on how REITs are trading 71bp cheap to single As (we still think REIT bonds, given covenant protections, are best measured against other A-rated corporate risk). Speaking of covenants… History in the making with the imminent CBL bankruptcy/restructuring: You heard
this
from
us
before
–
never
in
the
history
of
the
modern
REIT
era
(since basically
1993
when
the
lead
author
just
so
happened
to
begin
his
career
at
J.P. Morgan) has an equity REIT, in a mainstream property type, for bonds issued with (close to) the standard four major REIT financial covenants (total debt test, secured debt
test,
interest
coverage
test,
and
the
“holy
grail”
maintenance
unencumbered asset test), defaulted. The pandemic of course is the tipping point for CBL (the most recent forbearance agreements were extended, again, and the 10Q filing will be late as well), but a bond restructuring fate arguably appears
to us inevitable regardless given mall retail trends. While we may not have to wait another 27 years for another REIT
to
suffer
a
similar
fate
(WPG
unsecured
bonds
are
trading
at <$40),
we
do think the REIT unsecured bond track record remains stellar regardless. REIT bonds, in our opinion – and despite all the mall noise, remain significantly under-rated vs. the current CMBS methodology. Ratings tracker highlights how the tide has turned: REIT rating actions continue to pour in with the updated positive/negative action ratio sitting at 8:55 YTD (wow, that’s really, really negative for the sector). The positive actions came pre-COVID- 19
with
the
bulk
of the
negative
actions
post pandemic
declaration
coming
in
the retail and healthcare sectors. The mortgage REITs have also been either downgraded or moved to negative outlook. Negative rating actions won’t subside until the rent collection picture truly stabilizes. One notable recent positive action was
the Fitch affirmation of STAR’s at BB- with the outlook revised from stable to positive. The outlook
revision
reflects
Fitch’s
view that
STAR’s
asset
quality and
portfolio risk profile have improved over the past year given the continued reduction in exposure to legacy assets, including land assets and NPLs.
2
Recent reports: Please note that we publish commentary on REIT credit in numerous sector specific and team reports. Click on the links below for access to our reports and reference reports from our REIT equity and CMBS research colleagues. If you aren’t receiving any of these reports direct, you perhaps are not on the proper REIT credit, REIT equity, or CMBS distribution lists. Just let us know and we’ll get you added. J.P. Morgan Global Real Estate Daily News and Research Summary (11-Aug-20) REIT Sector Snapshot (11-Aug-20) The Week Ahead in High Yield (7-Aug-20)
The Week Ahead in High Grade (6-Aug-20) The REIT Reality (2Q20) Round #2 (4-Aug-20) CMBS Weekly (31-Jul-20) The REIT Reality (2Q20) Round #1 (28-Jul-20) High Grade Analyst Focus List (15-Jul-20) High Yield Analyst Focus List (15-Jul-20) REIT Dividend Tracker (9-Jul-20) HY Coverage Report (9-Jul-20) REIT 1Q20 Covenant Report (30-Jun-20) REIT 1Q20 Operating Comps (30-Jun-20) REIT Detailed Debt Maturities 1Q20 (30-Jun-20) 2020 Mid-Year Outlook (25-Jun-20, see page 40-41 for REITs) REIT Rent Collections (09-Jun-20) REITweek Meeting Notes (05-Jun-20) USD High Grade Coverage and Rating Report: REITs (01-Jun-20) The REIT Reality (1Q20) Round #2/Sector Upgrade (28-May-20, 32 REITs) The REIT Reality (1Q20) Round #1 (13-May-20, 30 REITs) J.P. Morgan Commercial Real Estate Update (17-Apr-20) REITs 2020 Tenancy Handbook (26-Mar-20) REIT Sector Downgrade (19-Mar-20) REIT 2020 Outlook Webcast and Slides (16-Dec-19)
3
REIT Bond Issuance 2020 YTD
Issue
Date
Issuer
Unsecured
Bonds
-
High
Grade
(Core)
Ra
tings
at
Issuance (Moody"s/S&P/Fitch)
Maturity
Coupon
(%)
Issue Spread
Size
($mm)
12-Aug-20
AGREE
LP
NR
/
BBB
/
NR
1-Oct-30
2.900%
225bp
$350
11-Aug-20
GLP
CAPITAL
LP
/
FIN
II
Ba1
/
BBB-
/
BBB-
15-Jan-31
4.000%
Tap
$200
11-Aug-20
HOST
HOTELS
&
RESORTS
LP
Baa3
/
BBB-
/
BBB-
15-Sep-30
3.500%
300bp
$600
10-Aug-20
KIMCO
REALTY
CORP
Baa1
/
BBB+
/
BBB+
1-Mar-28
1.900%
155bp
$400
10-Aug-20
ESSEX
PORTFOLIO
LP
Baa1
/
BBB+
/
BBB+
15-Jan-31
1.650%
118bp
$300
10-Aug-20
ESSEX
PORTFOLIO
LP
Baa1
/
...