REITS & Water Scarcity > Pricing-In The Cost

Time to take another look at a phrase of frequent focus here:
Water is the most precious commodity here in the desert . . .
In the best of financial negotiations and outcomes, rights to groundwater can be bought and sold at the highest prices when entitlements to lands change hands for rampant real estate developments that depend on delivering a public natural resource -water - for private investments and profits.
That applies closely to the Non-Stop Suburban Sprawl here in Mesa along the Inner Loops and Outer Loops expanding beyond The Outer Fringes of The East Valley.
Your MesaZona blogger was reminded of that by a new report by Bryan Walsh in Axios  .
Roughly 60% of real estate investment trust (REIT) properties are projected to experience high water-stress by 2030 — more than double the number today, according to a report that Axios had early access to from the asset management firm BlackRock.
The bottom line: From billionaire investors down to individual citizens, we need to prepare now for the financial effects of a drier future.
_________________________________________________________________________Water use is also a good proxy for stewardship at both the national and corporate level, says Brian Deese, BlackRock's global head of sustainable investing.

"If you're using water well, you're usually doing other things efficiently, too."

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The deepening financial risk of water scarcity

Bryan Walsh, author of Future 

Why it matters: Climate change is set to exacerbate water scarcity in much of the world. Investors who fail to price in the cost of adapting to water stress risk being left high and dry.

Details: Water stress occurs when need for water exceeds supply, due to a combination of population growth and urbanization — which increases demand — and the effects of climate change, which can alter the distribution of water supplies.

BlackRock used the distribution of REITs to identify where investors will feel the pain of water stress.

Roughly two-thirds of U.S. REIT properties are projected to be in high-risk water zones, double the proportion today. This includes most of the country west of the Mississippi.

According to World Bank estimates, global water infrastructure costs are expected to rise fourfold by 2030, to $150 billion a year.

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RELATED CONTENT ON THIS BLOG

1

Under-The-Radar Real Estate Investment Trusts REIT

Needless to say some people "trust" more than others, but what the heck let's just scan the open skies to see what's on the radar screens. As they say there's a lot of opportunities out there. Let's see if your MesaZona blogger can hit on just one - right here in Mesa: DuPont Fabros Technologies

6 Great Data Center REITs For 2017

First some background and context. 

The need for data centers is growing, and these REITs could be a smart way to invest in it

Matthew Frankel Mar 13, 2017 at 12:03PM

The Motley Fool

Data centers are a relatively new and growing form of real estate to invest in. 
As of 2017, there are several pure-play data center REITs listed on U.S. stock exchanges, including the industry's two largest companies, Equinix(NASDAQ:EQIX) and Digital Realty Trust(NYSE:DLR). 

Here's why data center REITs could be a smart addition to your portfolio, and a little information about each of the options.

Company	Symbol	Market Cap	Recent Share Price	Dividend Yield
Equinix	EQIX	$26.9 Billion	$376.01	2.13%
Digital Realty Trust	DLR	$16.6 Billion	$103.98	3.58%
CyrusOne	CONE	$4.2 Billion	$48.20	3.49%
QTS Realty Trust	QTS	$2.3 Billion	$48.76	3.20%
DuPont Fabros Technology	DFT	$3.7 Billion	$47.43	4.22%
CoreSite Realty	COR	$2.9 Billion	$86.51	3.70%

PLEASE NOTE: Chart is author's own.

Market cap, share prices, and dividend yields are current as of 3/10/17.

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Related content:

The Retail Apocalypse Is Demolishing Mall Investors 

http://www.businessinsider.com/retail-store-closures-hurt-reits-2017-5

"  . . Some of the share prices more than doubled over those years, as part of the commercial property bubble that got so huge that the Fed keeps publicly fretting about it, naming it as one of the reasons for raising interest rates, precisely to tamp down on the valuations. The Fed is worried that an implosion of these inflated commercial property values can take down the banks.
Mall REITs were part of this inflated commercial property universe, and they soared with it. That entire universe is now peaking. But separately, mall REITs are also caught up in the relentless brick-and-mortar retail meltdown, as online shopping is taking over. This is a structural shift that will continue to progress. Mall owners are already trying to find a way to “repurpose” their malls. But this isn’t going to be smooth.
As so many times, Private Equity firms are in the thick of it. . .: 
Read… I’m in Awe of How Fast Brick-and-Mortar Retail is Melting Down. 

2

"The market for mortgage-backed securities was in free fall, with fear running rampant and banks seizing collateral.

So Tom Barrack, the chairman of real estate investment trust Colony Capital Inc., published an 1,800-word plea for the Federal Reserve to buy bonds backed by homes, cars and other assets and for banks to halt margin calls.

That was last Saturday. In the week since, three top investors in the sector have engaged restructuring advisers, two others sold $7 billion of debt at a discount and publicly traded mortgage REITs in the U.S. lost more than $12 billion of market value, bringing total declines this year to at least $50 billion.

The carnage shows no signs of abating. Prominent asset managers including Blackstone Group Inc., TPG and Apollo Global Management Inc. have been sucked into the vortex wrought by the coronavirus pandemic, with their associated mortgage REITs losing more than two-thirds of their value on average so far in 2020.

 

05 April 2020

Re: REITS

Something old posted on this blog Dec 2017and something new and recent just yesterday from Bloomberg News (excerpts)

 

 

After $50 Billion of Losses, No One Comes to Save the Mortgage Market

By 

Tom Maloney

April 3, 2020, 10:12 AM MST

• 
   
  
  Many publicly traded U.S. REITs have lost most of their value
• 
   
  
  Starwood Capital, JPMorgan among those in hunt for bargains

3

26 March 2020

Logistics & Industrial/Commercial Valuations Are Now In Question

 

The World Needs Warehouses Now, and Blackstone’s Got Them

OK . . but do read more [the valuations are now in question]

Before the coronavirus crisis, private equity made a big bet on logistics facilities.

By Noah Buhayar        

@NBuhayarMore stories by Noah Buhayar

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CAUTION INSERT 1

"Venture capital (VC), another part of the private universe, is feverish. SoftBank’s Vision Fund, a $100bn private-capital vehicle backed by Saudi Arabia’s sovereign-wealth fund, has funnelled cash into fashionable, unlisted startups. Other institutions have vied with it to write big cheques for Silicon Valley’s brightest new stars. 

Already some of these bets have gone awry. . .

"The flood of capital into private markets ultimately rests on the belief that they will outperform public ones. There is evidence for this—in the past the best-run private-capital managers have beaten the returns from public markets, even after generous fees. And there are grounds to believe that this was no statistical fluke. Private capital, say its boosters, reduces “agency costs”. These arise wherever somebody (the principal) delegates a task to somebody else (the agent) and their interests conflict. Consider the public markets—no one has a big enough stake to make it worthwhile to monitor firms, which as a result get complacent or indulge in short-term earnings management to the detriment of the long term. Private capital, which is closely held in a few hands, is supposed to get around such agency problems.

Yet every investment craze is liable to overreach, blindness to risk and misallocated capital. Recent converts to the private world, dazzled by the historical returns, may not fully appreciate the hazards . . "

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CAUTION INSERT 2

Asset Management: PRIVATE CAPITAL/PRIVATE DEBT MARKETS > Buy-Outs & Property

"Worldwide, pools of private capital, including private equity and private debt, as well as unlisted real-estate and hedge-fund assets, grew by 44% in the five years to the end of 2019, . . . A different way to capture the scale of the private party is to look at the quartet of Wall Street firms that specialise in managing private investments for clients — Apollo, Blackstone, Carlyle and KKR.
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BLOGGER NOTE: What appears in this post are selected snippets taken from

Everyone now believes that private markets are better than public ones

The Economist | Jan 30th 2020

EXIT: from low-productivity “sunset” firms
ENTRY:  into more productive “sunrise” firms.
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"Their total managed assets have risen by 76% in the past five years, to $1.3trn.
They have long specialised in buy-outs and property.
More recently they have grown in private-debt markets, too—in total their funds’ credit holdings have hit $470bn

MORE > https://mesazona.blogspot.com/2020/02

_________________________________________________________________BLOGGER INSERT: They sure did 

Here's an earlier post from this blog

MesaZona > Table of Contents : Here's The Menu. Enjoy

03 June 2019

Word-of-the-Day = Logistics

 

 

 

 

Press Release Jun 02, 2019 https://www.blackstone.com/media 

Blackstone to Buy U.S. Logistics Assets from GLP for $18.7 Billion         

Deal will be the largest-ever private real estate transaction globally

Singapore and New York – GLP and Blackstone today announced that they have entered into an agreement for Blackstone to acquire assets from three of GLP’s U.S. funds for a purchase price of $18.7 billion.

__________________________________________________________Blackstone Bets on E-Commerce With $18.7 Billion Logistics Deal 

By Peter Vercoe     ‎June‎ ‎2‎, ‎2019‎ ‎6‎:‎10‎ ‎PM 

Updated on ‎June‎ ‎2‎, ‎2019‎ ‎9‎:‎53‎ ‎PM    

In context from https://www.bloomberg.com/news

Blackstone Group LP is doubling down on the future of online shopping, agreeing to buy $18.7 billion of U.S. logistics assets from Singapore’s GLP Pte in what it says is the world’s biggest private-equity real estate deal.Blackstone will gain 179 million square feet of warehouse assets, greatly expanding the size of its U.S. industrial footprint, the New York-based company said in a statement late Sunday

This overall transaction totals 179 million square feet of urban, infill logistics assets, nearly doubling the size of Blackstone’s existing U.S. industrial footprint.

Blackstone Real Estate’s global opportunistic BREP strategy will acquire 115 million square feet for $13.4 billion and its income-oriented non-listed REIT, Blackstone Real Estate Income Trust (BREIT), will acquire 64 million square feet for $5.3 billion.

Ken Caplan, Global Co-Head of Blackstone Real Estate, commented: “Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing e-commerce demand. Our global scale and ability to leverage differentiated investment strategies allowed us to provide a one-stop solution for GLP’s high quality portfolio.”

Alan Yang, Chief Investment Officer of GLP, said: “GLP was able to leverage our deep operating expertise and global insights in the logistics sector within four years to build and grow an exceptional portfolio. We are proud of the business our team built and are confident it will continue to flourish under Blackstone’s leadership. We are looking forward to expanding our footprint in the United States to continue to seize key opportunities in the U.S. market.”

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As stores from California to New York shut to slow the spread of the novel coronavirus, Amazon.com Inc.’s massive fulfillment centers are a hive of activity. Demand for household staples has been so frenzied that the e-commerce giant is temporarily limiting shipments of nonessential items to its facilities. It also wants to hire 100,000 workers to improve operations—at a time when millions of people in other industries are likely to lose their jobs. 

The moves have underscored the value of a type of building that real estate investors were already snapping up: warehouses.

 

 

 

 

Where You Get Your News Does Matter

No doubt about that when you see this clear easy-to-see at-a-fast-glance visual graphic

Margaret Talev

3 hours ago - Health

Axios-Ipsos poll: The skeptics are growing 

A rising number of Americans — now nearly one in three — don't believe the virus' death toll is as high as the official count, despite surging new infections and hospitalizations, per this week's installment of the Axios-Ipsos Coronavirus Index.
Between the lines: Republicans, Fox News watchers and people who say they have no main source of news are driving this trend.

Go deeper (2 min. read)

Data: Axios/Ipsos polls.

May 1-4, 1,012 U.S. adults.

July 17-20, 1,037 U.S. adults;

Chart: Danielle Alberti/Axios

 

Blank Sticky-Notes: Hong Kong Signage To Defy New National Security Laws

Surely an example of one first response from protestors - fast adaptation to repression

Mike Allen, author of AM

16 mins ago - WorldPhoto: Vincent Yu/AP

Hong Kong protesters are adapting their signs and slogans to skirt the repressive new security law, AP reports.
What's happening: A national security law enacted by China has set harsh penalties for a wide-sweeping number of political crimes. Prior to the law, stores supporting the movement put up artwork and notes filled with encouragement. Those have been taken down out of fear of authorities.

• Now, Hong Kong cafés known as "yellow shops" because owners sympathize with pro-democracy protesters, have shown support through walls decorated with blank sticky notes instead

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Get more morning buzz > AXIOS

Grab-and-Go In Portlandia: Trump Unleashes Orwellian Police-State For National Security

Specially-trained operations task forces call it  A Domestic Counter-Insurgency

DHS Goes Full Gestapo In Response To Ongoing Protests In Oregon

Legal Issues

from the kidnapping-our-way-out-of-the-current-crisis dept

Mon, Jul 20th 2020 9:35am — Tim Cushing

"Looks like we finally have some secret police to call our own. Ongoing protests stemming from a Minnesota police officer's brutal killing of an unarmed Black man have provoked a federal response. In some cases, the National Guard has been called in to quell the more violent and destructive aspects of some demonstrations. Others -- like the 50+ days of continuous protests in Portland, Oregon -- have been greeted with something far more frightening.

Jonathan Levinson and Conrad Wilson of Oregon Public Broadcasting were the first to break the news of unidentified federal officers yanking people off the street into unmarked vehicles and disappearing them for a few hours of interrogation. . .

No one appears to know for sure which branch of the federal government is taking people off the street and detaining them without probable cause. The officers performing these sweeps use unmarked vehicles and dress in camouflage uniforms that contain no identfying info that might indicate what agency they work for.

The federal government has deployed a mixture of federal agencies to cities with ongoing protests, including the US Marshals Service, CBP, ICE, and Bureau of Prisons riot officers. Presumably the DEA is in the mix as well, since it invited itself along for this anti-free-speech ride.
The DHS -- speaking through its acting secretary -- says this is justified.

The city of Portland has been under siege for 47 straight days by a violent mob while local political leaders refuse to restore order to protect their city. Each night, lawless anarchists destroy and desecrate property, including the federal courthouse, and attack the brave law enforcement officers protecting it.  
A federal courthouse is a symbol of justice - to attack it is to attack America. Instead of addressing violent criminals in their communities, local and state leaders are instead focusing on placing blame on law enforcement and requesting fewer officers in their community. This failed response has only emboldened the violent mob as it escalates violence day after day.

(Interim) DHS Secretary Chad Wolf universally describes the protesters as "violent anarchists," even though there's no evidence linking protesters to coordinated activities by anarchists groups. Setting off fireworks and clashing with riot police are normal behavior during protests, but Wolf's narrative portrays these as acts of war in a clash local law enforcement agencies are losing.
Wolf says he's going to take this local action nationwide. Protesters in other cities will soon be experiencing the federal government's Stasi-esque bypassing of niceties like the need to establish probable cause before shoving people into unmarked vans and dragging them away for questioning.

With as much lawbreaking is going on, we're seeking to prosecute as many people as are breaking the law as it relates to federal jurisdiction. That's not always happening with respect to local jurisdiction and local offenses. But, you know, this is a posture we intend to continue not just in Portland but in any of the facilities that we're responsible for around the country. 

A senior DHS official said officers arrested people for assaulting federal officers and vandalizing federal property, but did not provide specific cases. The official, who requested anonymity to discuss the issue, rejected the idea anyone was arrested without good cause.
“Federal officials don’t go around arresting people for no reason,” the official said. “This isn’t communist China.”
No. It's not. But that's what's happening. And it's being done with the blessing of the "law and order" president who has spent more time bashing people engaged in First Amendment activity than condemning the actions of the law enforcement officers who triggered these ongoing demonstrations. You don't have to be a Communist to enact a police state. Fascists like police states, too.
Let's step away from the secret police tactics that everyone -- including the agency overseeing the secret police -- agrees shouldn't be happening here and look at why federal agents and officers might be wandering the streets in gear that doesn't clearly indicate their agency affiliation.
It's all about dodging accountability . . .
Cops have been limiting personal accountability since the protests began by covering their badge numbers and removing other identifying information.
The federal government's insertion of a melange of federal agencies into the mix muddies the water further, making it almost impossible for citizens to know who's coming after them or for what reason.
Officers can stop people momentarily with reasonable suspicion but it requires probable cause to take them off the street and detain them for questioning.
None of that appears to be in play, no matter what the DHS Secretary says. If the federal agents were so sure about the "rightness" of their actions, they wouldn't be afraid to wear agency insignias and/or identify themselves when detaining people.
This is nothing more than federal-level intimidation tacitly approved by this administration -- one that feels any local agency not actively brutalizing protesters has lost control of the situation. And the agencies involved are doing everything they can to ensure they and their officers will get away with it.

Filed Under: cbp, chad wolf, dhs, fascism, free speech, graffiti, invasion, oregon, portland, protests, vandalism 

 

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The Border Patrol Was Responsible for an Arrest in Portland

An internal memo, obtained exclusively by The Nation, details a coordinated program of domestic counterinsurgency.

By Ken KlippensteinTwitter July 17, 2020  The Nation |                        

"An internal memo, obtained exclusively by The Nation, details a coordinated program of domestic counterinsurgency.

For days, federal agents in unmarked cars have reportedly been snatching Portland protesters off the streets. On Thursday, video emerged of federal agents clad in camouflage fatigues and unspecified “police” patches apprehending one such demonstrator and placing him in an unmarked vehicle. Social media lit up with speculation about the intentions—and the identity—of these agents. A memo consisting of internal talking points for the federal agency responsible for the arrest, Customs and Border Protection (CBP), and obtained exclusively by The Nation provides some answers—and raises even more questions.

Dated July 1, the memo is titled

“Public Affairs Guidance: CBP Support to Protect Federal Facilities and Property” and marked For Official Use Only.” It describes a special task force created by the Department of Homeland Security (DHS) in response to President Trump’s Executive Order on Protecting American Monuments, Memorials, and Statues and Combating Recent Criminal Violence.

BLOGGER NOTE: Just in time for The 4th of July!

 

 

 

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That task force, the Protecting American Communities Task Force (PACT), has been tasked not only to assess civil unrest but also to “surge” resources to protect against it.

 

The Portland arrest of Mark Pettibone, first reported by Oregon Public Broadcasting, followed several similar arrests involving officers from a Border Patrol Tactical Unit (BORTAC)—CBP’s equivalent of a SWAT team—as well as the US Marshals Special Operations Group. A CBP spokesman confirmed to The Nation that CBP agents were responsible for the arrest, pointing to authorities under the Protecting American Communities Task Force.

“Violent anarchists have organized events in Portland over the last several weeks with willful intent to damage and destroy federal property, as well as injure federal officers and agents,” said the CBP spokesman. “These criminal actions will not be tolerated.”

Trump Unleashes His Secret Police in Portland
Jeet Heer

 

The talking points memo identifies a series of potential questions, including many of those being asked in response to the Portland arrests. In several cases, it instructs CBP officials not to answer them, citing “operational security.”

Back-In-Focus: Hedge Fund Shenanigans

Oops! Hold on just a minute!

Bernanke and Yellen Refocus Blame on Hedge Funds

The former Fed chiefs offer a reminder about the origins of March’s Treasury market meltdown

By Brian Chappatta     ‎July‎ ‎20‎, ‎2020‎ ‎2‎:‎00‎ ‎AM

        

 

They know what they’re talking about.

Photographer: Elijah Nouvelage/Bloomberg
LINK > https://www.bloomberg.com/opinion/articles/2020-07-20
Just a reminder from your friendly neighborhood former Federal Reserve Chairs: Hedge funds probably blew up the world’s biggest bond market in March and helped usher in unprecedented central bank action.
Ben S. Bernanke and Janet Yellen, who combined led the Fed for more than a decade, delivered testimony last Friday to the House Select Subcommittee on the Coronavirus Crisis. Much of their remarks focused on the urgent need for Congress to take further fiscal action to offset the economic shock caused by the pandemic. However, in their writing on the Brookings Institution website, they also took some time to lay out their thoughts on steps taken by their successor, Jerome Powell, and his fellow central bankers . . .
Now four months removed from the worst of the market chaos, it’s worth stepping back and remembering what exactly transpired . . .
Any investor could be forgiven for not remembering that a little known trade popular among hedge funds, known as the cash-futures basis, was what set the U.S. Treasury market maelstrom into motion. . .

Something Snapped

March's extreme rally in Treasuries broke a popular hedge fund trade, forcing them to unload bonds into a strained market

 

Source: Bloomberg

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The good news, for now, is there’s little evidence hedge funds are piling back into the trade. The Cayman Islands, seen as a proxy for all kinds of leveraged accounts, was a net seller of long-term U.S. Treasuries in April and May. It shed more than $100 billion of the securities in March, far and away the most in history. . .
As Bernanke and Yellen pointed out, hedge funds would be a logical first place to look for answers.
Once-in-a-century pandemic or not, Treasuries simply do not trade the way they did in March without something going haywire. Whether it was their intention or not, the former Fed chiefs deserve praise for bringing hedge-fund shenanigans back into the picture.