REITs To Watch For Earnings On Oct 25: BXP, EQR, LPT, UDR

We have entered into one of the busiest weeks of the Q3 earnings season for the real estate investment trust (REIT) industry. Companies like Boston Properties, Inc. (BXP - Free Report) , Equity Residential (EQR - Free Report) , UDR Inc. (UDR - Free Report) and Liberty Property Trust (LPT - Free Report) have lined up their earnings releases for October 25.

No doubt, the sentiments have been positive so far, with the top-notch REITs like Prologis, Inc. (PLD - Free Report) and SL Green Realty Corp. (SLG - Free Report) rendering better-than-expected performances. However, despite broadly benefiting from the persistent low-rate environment for their high debt-dependence nature, individual market dynamics of the underlying asset category play a pivotal role in defining the REIT’s performance.

Per an Axiometrics study, the national apartment market has been experiencing moderation over the past few quarters, after posting robust results in 2014 and 2015, thanks to the new supply in the high-rent metros. Yet, the market has been still performing above the long-term average. Also, market fundamentals have remained steady in the mid-range markets.

On the other hand, during Q3, the national vacancy rate in the U.S. office sector remained at the lowest level since 2008, per a report from CBRE Group, Inc. (CBG - Free Report) . Further, the office market was aided by limited new construction and stable demand for space. Space additions by firms are occurring at a modest pace, with the suburbs outperforming the downtown markets. Moreover, per the CBRE Group’s study, the industrial REIT market continued its longest stretch of recovery, with the 26th straight quarter of declining availability.

Therefore, surprises might be in store for the REITs, in the third quarter, despite a challenging environment stemming from the rising supply in some asset categories. Now, let’s take a look at the four REITs scheduled to release their third-quarter results today, October 25.

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