3 Real Estate Stocks to take Advantage of Rising Rents
The US housing market was scorching hot last year and existing home sales peaked highest level for around 15 years. In addition, historically low mortgage rates amid the supply tightening have caused house prices to rise dramatically. On the other hand, the lack of housing affordability and the desire of teleworkers to relocate and use their flexibility meant that rents have skyrocketed.
Rental costs were 10.1% higher last year, growing five times faster than 2020. December 2021 was the sixth consecutive month of double-digit annual increases in national rents. Additionally, Realtor.com expects rents to continue rising this year due to limited supply and over-demand. The organizational prognosis national rental growth of 7.1% in 2022growing even faster than home prices.
Against this backdrop, real estate stocks Newmark Group, Incorporation (NMRK), preferred flat shares, founding (APTS) & BRT Apartments Corporation (BRT) could now be ideal bets.
Newmark Group, Incorporation (NMRK)
NMRK is a leading global provider of commercial real estate services. The Company’s services and products include capital markets such as investing, property management, valuation and advisory, and commercial real estate advisory and advisory services.
NMRK this month announced its agreement with Budapest-based VLK Consulting, which will become Newmark VLK Hungary. VLK has built a strong track record as one of Hungary’s leading commercial real estate service companies. NMRK intends to use VLK’s know-how to strengthen its presence in Central and Eastern Europe. In addition, NMRK announced another agreement with a leading commercial real estate group in Poland, which will operate as Newmark Polska. This agreement is intended to strengthen its presence across Europe, the Middle East and Africa.
Total revenue for NMRK for the fiscal third quarter ended September 30 increased 80.8% year over year to $788.13 million. Net income available to common shareholders increased 70.6% year over year to $128.55 million, while Adjusted EBITDA improved 229.3%. year-over-year to $174.54 million. Its adjusted result eps up 316.7% year-on-year to $0.50.
Street expects the company’s revenue to increase 43.6% year over year to $863.73 million for the fourth quarter of the fiscal year ended December 2021. Also, NMRK beat street EPS estimates in three of the last four quarters, which is impressive.
NMRK shares are up 109.3% over the past year and 36.9% over the past nine months to close their last trading session at $14.57.
NMRKs POWR ratings reflect these promising prospects. The company has an overall rating of B, which means buy in our proprietary rating system. The POWR ratings are calculated considering 118 different factors, with each factor being optimally weighted. NMRK is rated B in growth, value and momentum. Within the real estate services Industry, it’s number 4 out of 45 stocks.
In addition to the POWR ratings I’ve highlighted, you can see the NMRK’s stability, mood, and quality ratings here.
Preferred shared apartments, start-ups (APTS)
APTS is a real estate investment trust engaged in the ownership and operation of Class A apartment buildings. Its investment objective is to generate attractive and stable returns for shareholders by investing in real estate and acquiring multi-family real estate loans.
Last month, APTS announced it had signed a new 15-year lease with Hapag-Lloyd for Three Ravinia in Atlanta, Georgia. The lease is intended to diversify the tenant base and create additional cash flows.
In November, APTS completed its approximately $9.10 million real estate loan investment related to Oxford Properties’ plans to develop Beaver Ruin Apartments, a multi-family development in Gwinnett County, marking its second investment of the year in Gwinnett County, a fast-growing suburb of Atlanta. This real estate loan is expected to generate significant ongoing returns and expand the pipeline of quality communities in its target markets.
APTS operating income was $34.88 million, an increase of 30.4% for the third fiscal quarter ended September 30, while net income attributable to the company increased 385.5% year-on-year to $9.98 million US dollar rose.
APTS earnings per share are expected to improve 15.6% year over year for the fourth quarter of the fiscal year ended December 2021.
Over the past year, the stock is up 122% to close yesterday’s trading session at $16.14. APTS shares are up 55.2% over the past six months.
APTS POWR ratings reflect its solid fundamentals. The company has an overall rating of B, which means buy in our proprietary rating system. APTS has also rated a B in Growth, Value & Momentum. in the REITs – Residential Industry, it’s #1 of 25 stocks. Click here to view the APTS ratings for stability, mood, and quality.
BRT Apartments Corporation (BRT)
BRT is an internally managed real estate investment trust (REIT) primarily focused on the ownership, operation and development of multifamily properties.
In November 2021, BRT announced an amended credit facility with VNB New York, LLC, a subsidiary of Valley National Bank, that will allow for up to $35 million and up to $60 million pursuant to an uncommitted accordion Feature to borrow acquisition of apartment buildings. “The additional capital gives us the ability to capitalize on growth opportunities that we expect will expand our portfolio,” said Jeffrey A. Gould, BRT’s chief executive officer.
BRT’s total revenue increased 5.5% year over year to $7.71 million for the fiscal third quarter ended September 30. Adjusted working capital increased 15.5% year over year to $5.66 million while net income attributable to common shareholders improved 475.5% year over year to $28.11 million. The company’s adjusted fund from operations per common share rose 10.7% year over year to $0.31.
Consensus estimate of revenue of $7.60 million for the fiscal fourth quarter ended December 2021 indicates a 7.8% year-over-year increase. BRT’s FFO per share for the same period is expected to be $0.30, up 3.5% year over year. Additionally, BRT has beaten consensus FFO per share estimates in three of the last four quarters.
The stock is up 44% over the past year and 17.6% over the past six months to close its last trading session at $20.94.
It’s no surprise that BRT has an overall rating of B, which translates to “buy” in our proprietary rating system. The stock is rated A on Sentiment and B on Momentum & Stability. It is #2 in the residential REITs industry. Get BRT’s growth, value and quality ratings Here.
NMRK shares traded at $14.58 per share on Friday afternoon, up $0.01 (+0.07%). Year-to-date, NMRK is down -22.03% versus a -7.78% gain in the benchmark S&P 500 index over the same period.
About the Author: Subhasree Kar
Subhasree’s strong interest in financial instruments led her to pursue a career as an investment analyst. After her master’s degree in economics, she gained knowledge in equity research and portfolio management at Finlatics. More…