Single Family Rentals

AMH reported strong 4Q20 earnings and 2021 outlook as demand in the single family rental market remains strong despite increasing blended lease rates and US housing starts forecast to slow to 3% growth in 2021.

AMH occupancy was 97.2% with cash collections at 96.7% for 4Q20. AMH delivered 195 homes for $58MM and is targeting 2,000 developed homes in 2021. Bad debt expense is forecast to improve in 2H2021 as the economy accelerates.

Office REIT Earnings

Office REIT 2021 earnings season recently wrapped up as CXP, ESRT, HPP, and VNO reported results in a year where office REIT shares are down 35%.

Office utilization in major office markets remains in the mid-teens, but we forecast a meaningful return to office in 3Q2021 based on economists’ view that 50% of the population will be vaccinated by May. A recent JLL report (Better than Normal: Vision 2021) estimated 80% office utilization by yearend 2021. We believe the sector’s earnings, strong office rent collections and leasing spreads point to more durable fundamentals than current valuations reflect.

Moreover, the Goldman Sachs Economics team and others forecast US GDP to grow 7.0% YoY in 2021, a solid backdrop for the office market.

Dollar Stores

Dollar and discount store 2021 earnings season is on the horizon, leading us to dig into unemployment rates across the wage spectrum.

The headline unemployment rate, reported at 6.3% in January, has come a long way from the 14.8% a year ago April, and in fact has continued to improve every month since. However, the Federal Reserve believes unemployment is likely above 20% for 20% for workers in the bottom wage quartile.

The dollar and discount stores report a January 2021 stimulus-driven jump in spending by low-income households. A similar jump in spending is forecast for March.

27,000 Acre Conservation Use

Ducks Unlimited and the University of Florida announced a 27,000-acre conversation and use easement by the DeLuca family to celebrate the end of 2020.

Researchers believe the donation will save endangered species, support Everglades restoration, provide vital research into best practices of cattle ranching, and stave off development of this historic stretch of mostly undeveloped cattle-grazing land valued at $111 million.

The working ranch is directly north of the state Kissimmee Prairie Reserve and joins 250,000 acres of protected land around the Everglades Headwaters National Wildlife Refuge and Conservation Area.

Advansix $35MM Force Majeure

Advansix is projecting a $30 to $35MM unfavorable impact to earnings from its Force Majeure declaration this week at Hopewell VA.

The plant is one of the world’s largest producers of Carprolactam (795MM lbs) and Ammonium Sulfate (3.3B lbs). Hopewell also produces CPL for its sister plant in Chesterfield VA, the second largest Nylon 6 plant in the US.

Advansix

TX Gas Storage Force Majeure

Force majeure declared on 16 January 2018 by Tres Palacios Storage due to commercial power outage affecting its ability to withdraw from storage. Six interstate pipelines post injections and withdrawals from the site as well as intrastate pipelines owned by Kinder Morgan and Enterprise.

Tres-Palacios-1

Force Majeure at Dominion Terminal

Hampton Roads…Force Majeure declared by Dominion Terminal at North America’s largest coal-exporting port. Extreme weather will “prevent the dumping of coal from railcars and the loading of vessels at average rates.”

Global metallurgical coal prices may be affected esp if Kinder Morgan Pier IX and NS Pier 6 follow suit.

Coal Terminal DTA