Morgan Stanley·2025-06-06 07:50Investment Rating - The report assigns an "In-Line" industry view for North American REITs [4] Core Insights - Apartment REITs are experiencing fundamental tailwinds with declining deliveries and solid job growth, although there are concerns about potential peaking of new lease rates [2] - Senior housing has shown strong demand, with companies like WELL and AHR actively pursuing acquisitions [6][10] - Industrial fundamentals are better than expected, with a notable slowdown in construction starts, which may serve as a tailwind [11] - Retail leasing remains robust, with capital deployment being a key differentiator among companies [6][39] - The healthcare sector is seeing strong demand in senior housing, with significant acquisition activity reported [10][57] Apartment REITs - AvalonBay Communities reported a +2.3% year-over-year effective rent change for April and May, with occupancy improving to 96.3% [21] - Camden Property Trust is actively recycling capital and has made recent acquisitions [21] - Essex Property Trust noted that job postings are near historical averages, indicating growth potential [22] Senior Housing - Senior housing demand is robust, with occupancy growth exceeding expectations [10][57] - WELL announced $6.2 billion in acquisitions and loan funding through April [57] Industrial - Prologis and EastGroup Properties reported better-than-expected fundamentals, with a focus on occupancy over pricing [11][48] - Construction starts have decreased by 50% from pre-COVID levels, which may benefit the sector [11] Retail - Simon Property Group noted solid leasing activity despite tariff uncertainties [39] - Kimco Realty reported strong leasing activity and has raised guidance due to better-than-expected bad debt collection [39] Healthcare - The healthcare sector is seeing strong demand in senior housing, with AHR acquiring a 187-unit property for $65 million [57] - Ventas raised its 2025 normalized FFO per share guidance by 7% year-over-year [57] Single Family Rentals - American Homes 4 Rent reported a 4.3% growth in new leases for May, with a strong development pipeline [30] - Invitation Homes launched a developer lending program expected to generate $200-300 million annually [31] Storage - Public Storage and Extra Space Storage are experiencing mixed results, with occupancy gains but soft rental rates [32][34] - National Storage Affiliates is targeting positive same-store revenue growth by year-end [36] Office - Highwoods Properties is on track to meet leasing targets, with a strong pipeline of new and renewal prospects [61] - Paramount Group is exploring joint venture opportunities to enhance its portfolio [62] Triple Net REITs - Agree Realty is focusing on recession-resistant retailers and has implemented AI to streamline operations [64] - Realty Income maintains a strong balance sheet and is expanding its European presence [69]