巴克莱-美股-房地产行业-美国REITs：2020年房地产行业要点前瞻-2019.12.16-22页.pdf

Equity Research 16 December 2019 CORE Barclays Capital Inc.and/or one of its affiliates 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.PLEASE SEE ANALYST CERTIFICATION(S)AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 16.Restricted-Internal U.S.REITs Real Estate:The Year Ahead Key Takeaways-2020 On December 10 and 11,2019 we held our 16th annual real estate conference Real Estate:The Year Ahead.The program consisted of twelve thematic panels preceded by a series of forward looking presentations over two days,including a new half-day PropTech track.The panels were comprised of senior management from 45 public/private companies,and included keynotes on the impact of private equity(Blackstone/Brookfield)as well as A View from the Top(SPG/PLD).Once again,we began with a presentation of the ULI/PwC Emerging Trends in Real Estate 2020 report.In this note,we provide a summary of the highlights from each presentation/panel.Key themes heading into 2020 include:Long runway.While late in the cycle,consensus suggests that real estate fundamentals remain sound,cash flows/earnings should accelerate modestly,and there is a significant amount of investable capital.The implication is likely cap rate spread compression and greater challenges creating alpha.The big are getting bigger.Both in the REIT space and in private equity scale is a growing competitive advantage.Factors such as stronger balance sheets,the use of technology(data analytics),and greater operating flexibility will drive divergence between Haves and Have Nots.Convergence.Property formats and in fact,success drivers across asset classes,are converging.The benefits of client centricity,experiential amenities,and the imperative to create community are increasingly evident across the multifamily,retail,office,and logistics sectors.Like scale the ability to deliver those success factors will drive greater divergence.Accelerating change.The PropTech track showed how quickly real estate is changing driven by technology and demographic demands,and informed by data.Applying the use of predictive data analytics and artificial intelligence,and looking at the implications of autonomous driving and smart building technologies,it is clear the way real estate is created,used,and operated is changing rapidly.The conference panel takeaways detailed below support our constructive outlook on U.S.REITs.Underlying real estate fundamentals remain positive and abundant,investment capital appears to be waiting on the side-lines.That said,investor sentiment has been volatile,a function of risk on/risk off tactical shifts.The overarching theme is cautious optimism on real estate heading into 2020,as a solid fundamental/funds flow backdrop is potentially mitigated by a risk-on trade.INDUSTRY UPDATE U.S.REITs POSITIVE Unchanged U.S.REITs Ross L.Smotrich+1 212 526 2306 BCI,US Brendan Lynch,CFA+1 212 526 9428 BCI,US Upal Rana+1 212 526 4887 BCI,US U.S.Health Care Services Steve Valiquette+1 212 526 5496 BCI,US Barclays|U.S.REITs 16 December 2019 2 Real Estate:The Year Ahead-Agenda Tuesday,December 10 Emerging Trends in Real Estate 2020 Urban Land Institute/PWC Byron Carlock,Jr.,U.S.Real Estate Practice Leader,PricewaterhouseCoopers LLC Healthcare:Current Market Forward Success Mark Shaver,Senior Vice President of Business Strategy and Health Systems Initiatives,Welltower(WELL)Moderator:Steve Valiquette,Managing Director,Senior U.S.Healthcare Services Analyst,Barclays Net Lease:Defensive Alternative.Maybe Joey Agree,President&CEO,Agree Realty Trust(ADC)Bill Lenehan,President&CEO,Four Corners Property Trust Inc.(FCPT)Pete Mavoides,President&CEO,Essential Properties Realty Trust(EPRT)Ed Pitoniak,Chief Executive Officer,VICI Properties(VICI)Moderator:Scott Schaevitz,Managing Director,Barclays Streetsense-A Focus on the User Jaime Sabat,Director of Trends&Consumer Insights,Streetsense Brian Taff,Chief Executive Officer,Streetsense Residential:Demographic Disruption Toby Bozzuto,President&CEO,The Bozzuto Group Ric Campo,Chairman&CEO,Camden Property Trust(CPT)Michael Schall,Chief Executive Officer,Essex Property Trust(ESS)Brian Taff,Chief Executive Officer,Streetsense Moderator:Chris Mayer,Paul Milstein Professor of Real Estate,Columbia Business School Coresight-The Store of the Future Deborah Weinswig,Founder&CEO,Coresight Research Retail:Shopping Centers The Leading Edge Kenneth Bernstein,President&CEO,Acadia Realty Trust(AKR)Conor Flynn,Chief Executive Officer,Kimco Realty Corporation(KIM)Lisa Palmer,President,Regency Centers Corporation(REG)Deborah Weinswig,Founder&CEO,Coresight Research Moderator:Schecky Schechner,Managing Director,Co-Head of Real Estate Americas,Barclays Luncheon Keynote:The Impact of Private Equity.Revisited Brian Kingston,President,CEO&Global CIO,Brookfield Property Group LLC Kathleen McCarthy,Global Co-Head of Real Estate,The Blackstone Group(BX)Moderator:Ross Smotrich,Managing Director,Senior REIT Analyst,Barclays Gensler-Future of the City/Case Studies Jordan Goldstein,Principal&Global Director of Design,Gensler Office:Disruption or Amenity The Evolution Jordan Goldstein,Principal&Global Director of Design,Gensler Bryan Koop,Executive Vice President,Boston Properties(BXP)Barclays|U.S.REITs 16 December 2019 3 Andrew Kupiec,Chief Executive Officer,Hana Tony Malkin,Chairman&CEO,Empire State Realty Trust(ESRT)Nelson Mills,President&CEO,Columbia Property Trust(CXP)Moderator:MaryAnne Gilmartin,Co-Founder&CEO,L&L MAG View from the Top:Prologis and Simon Hamid Moghadam,Chairman&CEO,Prologis(PLD)David Simon,Chairman&CEO,Simon Property Group(SPG)Moderator:Ross Smotrich,Managing Director,Senior REIT Analyst,Barclays Investing:Real Assets/Late Cycle Performance David OReilly,Chief Financial Officer,Howard Hughes Corp(HHC)Steve Plavin,Chief Executive Officer,Blackstone Mortgage Trust(BXMT)Sherry Rexroad,Managing Director,Blackrock(BLK)Ralph Rosenberg,Head of KKR Real Estate,KKR(KREF)Moderator:Scott Levin,Managing Director,Barclays Wednesday,December 11 Overview of the PropTech Landscape Schecky Schechner,Managing Director,Co-Head of Real Estate Americas,Chairman of PropTech,Barclays Venturing into PropTech:Investable Trends and Lessons Learned Jeffrey Berman,General Partner,Camber Creek Serena Dayal,Investment Director,Softbank Group Travis Putnam,Co-Founder&Managing Partner,Navitas David Weiden,Partner,Khosla Ventures Moderator:Brooke Parker,Director,Private Capital Markets,Barclays PropTech Disrupters:New Perspectives Lead to New Valuation?Kristen Ankerbrandt,Chief Financial Officer,Compass Jason Fudin,CEO&Co-Founder,WhyHotel Cameron Maloney,General Manager,Clutter Moderator:Nick Cunningham,Managing Director,Equity Capital Markets,Barclays Co-Arrangements:The New Paradigm in Space Utilization Chris Bledsoe,CEO&Co-Founder,Ollie Jim Collins,Chief Executive Officer,Kitchen United Tyler Herbert,Head of Real Estate,Convene Brad Wright,Chief Executive Officer,Chunker Moderator:Allison Sedrish,Director,Co-Head of PropTech,Barclays Corporate Innovation:In-House Innovation and Incubation John Helm,Founder&Partner,RET Ventures Will ODonnell,Managing Partner,Prologis(PLD)Judah Siegal,Vice President,Brookfield Growth Partners Michael Spies,Managing Director,Tishman Speyer Moderator:Ross Smotrich,Managing Director,Senior REIT Analyst,Barclays Barclays|U.S.REITs 16 December 2019 4 Emerging Trends in Real Estate 2020 Presenter:Byron Carlock Jr.,U.S.Real Estate Practice Leader,PricewaterhouseCoopers LLC Once again,we kicked off our annual conference with Emerging Trends in Real Estate 2020,one of the most highly regarded forecasts in the industry published by the Urban Land Institute and PricewaterhouseCoopers.This year marked the 41st annual report;continues to offer extensive insight and analysis on industry trends and developments based on surveys,interviews and individual market focus groups.Outlook for 2020 Caution.The Emerging Trends survey remained positive again this year.Those who believe next year will be excellent however,fell to 12.6%vs.17%in 2018;half of the 2016 outlook(25.7%).About 76%of survey respondents expect good-to-excellent profitability in 2020(vs.78.8%last year).This marks the fourth consecutive year of modest declines in profitability expectations,but the outlook is still strong in absolute terms,in our view.Qualitatively,investors expect 2020 to be similar to 2019 albeit with new challenges,and several new trends emerging.Looking ahead to 2020,PwCs survey provided the following key takeaways:Investors expect easing down the road.We currently sit near real estate market valuation highs.Given the stage in the cycle and how far the market has come,investors are anticipating a slower growth environment with a more sustainable GDP growth.The expectations are lower for longer on rates,and a soft landing,however downside risks still exist.In the near-term,policy and geo-political issues such as uncertainty around trade are of concern.Long-term,a rising protectionist economy and intensifying market concentration can cause dramatic shifts on investor sentiment and valuation.The overwhelming response on who will be the winners in 2020 was centred around the consumer and end users.The top buy recommendations were industrial and residential real estate(56.8%and 52.1%respectively).Overall,72.9%of respondents recommended either buy or continue to hold real estate in 2020.The great migration.The top 10 markets for 2020 are heavily weighted towards the Southeast.Each of these markets share similar characteristics;affordability,low/no state income tax,existing urban cores,and attractive suburban living.However,each of these markets are doing well based on different industries.To name a few-Austin(#1)continues to see technology jobs fuel growth,Nashville(#3)is seeing healthcare drive growth,and Atlanta(#8)experiencing expansion in the media and telecommunication industries.The country is seeing positive domestic net migration in only 23 states;most are concentrated in the South and West.Florida and Texas account for 43%of all positive net migration and the top 10 states account for nearly 90%of the total.The major near-term concern is political climate that lead to a rise in rent control regulations;the inadvertent impact will be to slow new investment in existing housing and the development of new housing.Meanwhile household formation continues to outpace new supply by as much as 3.5 million units.“Hipsturbia”A community state of mind.As we begin to see millennials moving to the suburbs,not all suburbs are created equal.Suburbs that offer the same amenities as urban cores such as great retail,restaurants,green space,etc.are winning.These suburbs cant be in the middle of nowhere,the demographic seeks good transportation,access to urban cores,and are often near universities.Landlords are finding that creating a sense of community is an important benefit in terms of attracting and the retention of employees and tenants.This is also true for multifamily properties,which increasingly substitute unit amenities with community amenities.Barclays|U.S.REITs 16 December 2019 5 Today,suburban neighbourhoods are looking for the right buildings to anchor the future development of the surrounding area in order to create a community feel.The entire report“Emerging Trends in Real Estate 2020”by ULI/PWC can be found by clicking here.Healthcare:Current Market Forward Success Moderator:Steve Valiquette,MD,Senior U.S.Healthcare Services Analyst,Barclays Panelists:Mark Shaver,SVP of Business Strategy and Health Care Initiatives,Welltower(WELL)We hosted WELL management for a discussion on healthcare related real estate at the annual Barclays Real Estate Conference,with a focus on health system deals and relationships in particular.We summarize our key takeaways from the discussion below.What do health systems look for in a Healthcare REIT?WELLs view is that there is currently$650 bln of real estate owned by health systems that company would like to own for themselves.As such,the pipe line of opportunity with health systems remains vast,not only for medical office deals,but also similar vertically integrated partnerships or JVs with health systems with post-acute across the continuum of care(similar to ProMedica/HCR ManorCare).ProMedica/HCR ManorCare additional synergies.Management discussed some of the components making up the now better than expected synergy expectations related to WELLs JV with ProMedica beyond the core streamlining of accounting and other functions.Some of these include:1)HCR ManorCare went from being a for-profit,PE-owned business to a not-for-profit(NFP),health-system owned business,which carries an income tax advantage,2)there is also a lower level of legal activity associated with a NFP,which has recently begun to manifest itself,and 3)WELLs ability to connect ProMedica/ManorCare with other partners and relationships.New PDPM reimbursement system for Skilled Nursing Facilities(SNFs).Too early to provide color on whether there is a material benefit to the SNF industry yet or not from lower therapy costs Initiatives to lower labor costs(CareMore improves LOS/occupancy&lowers costs).Through its CareMore collaboration,WELL brings a new suite of clinical services/capabilities to its senior housing communities,with care delivered by CareMores nurses and practitioners,funded through Anthems Medicare Advantage(MA)program.Aside from the benefit of greater access to onsite care for residents,WELL expects additional benefits to include:1)an improvement in LOS from 22 to 37 months,2)a healthier community population,with a reduction of medications from about 12/13 down to 5;and 3)labor and cost efficiencies over time;as care/services are delivered by CareMore,WELL operators should be able to reduce staffing models and potentially salesforce efforts(related to a reduction in resident turnover as LOS improves).By the end of 2020,WELL expects the program will be rolled out to 5 separate operators/communities(up from the current 2 operators/communities),and overall is targeting 50 communities total.Evolving Medicare Advantage environment provides incremental revenue/partnership opportunities.WELL management also discussed the likelihood of an increase in the number of senior housing residents utilizing MA plans in the future.Currently only 10-20%of the senior housing/assisted living population are under Barclays|U.S.REITs 16 December 2019 6 MA plans,likely as a result of the programs not being as widely utilized when these 80-83 year-olds(on average)were choosing health plans.Following the push under recent administrations along with expanded benefits under certain plans in 2020 to include some payment for other determinants of health including nutriti