August 2021 Retail Numbers

August retail sales increased 15.1% year over year. Standout categories were food service +31.9%, gas stations +35.7%, and apparel +38.1%. Other standouts are electronics & appliances +18.1% and sporting goods/hobby +19.8%.

Sporting goods/hobby and food & beverage saw the highest acceleration from July to August.

3Q21 Consumer Spending Preview

CMBS delinquencies for retail are down 30% for the 12 months ending August 2021 and consumption has jumped 16% from the pandemic trough to reach pre-pandemic trends.

Labor Day coronavirus number are unfortunately a reminder that the hurdle for strong consumption growth going forward is high: the Delta variant is weighing on Q3 growth, while fading fiscal stimulus and a slower service sector recovery are adding additional headwind.

Run Up to the Ryder Cup

Fun to catch another strong Dick’s Sporting Goods earnings report while gearing up for the Ryder’s Cup at Whistling Straits in September.

DKS is leaning hard into golf and experiential retail. The Golf Galaxy Performance Center opens in Boston this weekend with TrackMan and BioMech technology, driving bays, and lessons. The House of Sport rollout also remains full speed ahead with turf fields, batting cages, and climbing walls.

3Q21 Lodging RevPAR

Lodging RevPAR is still hovering around 2019 levels and 3Q21 came in last week at -0.6% vs 2019. Cities with high exposure to business travel and group business travel lag the overall improvement in RevPAR, with San Francisco -53%, New York -42%, and Boston -41%, whereas the average of the Top 25 markets saw a decrease of -13% vs 2019 in 3Q as of last week.

Leisure continues to lead growth with Resort markets now +20% while Economy is at +12%.

Simon Property 2Q21 Beat by Over 20%

SPG reported 2Q FFOPS of $2.92 versus Factset consensus of $2.38 for a 23% beat. SPG also increased full year guidance to conservatively suggest 14% y/y growth.

Highlights also included 2,500 leases encompassing 9.5mn SF year in 1H21. SPG’s retailer investments remain strong, led by Forever 21 and Aeropostale. Eddie Bauer outperformed expectations. The development pipeline increased 98% to $854mn from $432mn in 1Q21 A strong quarter across the board.

$2.3bn North America Logistics Fund

GLP Capital Partners (GCP) raised $2.3bn under GLP Capital Partners IV to invest in institutional-quality logistics assets located in infill and key distribution markets.

The fund has already committed over 50% of its capital to create a 25mn SF portfolio in Southern California, Eastern Pennsylvania, Seattle, Portland, and South Florida.

Macquarie $7bn Americas Infrastructure Fund

Macquarie Asset Management has raised $6.9bn for Macquarie Infrastructure Partners V (MIP V), the manager’s sixth Americas core and core-plus infrastructure fund. Prior infrastructure raises total over $35bn.

MIP V fund will seek to invest in high-quality infrastructure assets and will be focused on the transportation, communications, waste management, utilities, and energy sectors.

Duke Realty Corp. 2Q21 Earnings

DRE reported core 2Q21 FFOSPS slightly above FactSet consensus and driven by stronger rent growth, quicker lease-up of new developments, and lower bad debt. The cash leasing spreads were 19.2%, largely driven by coastal markets (40% of portfolio).

DRE started five new spec projects in 2Q21 with an estimated $187mn investment; acquired $303mn of properties at a 4.4% weighted average stabilized cap rate; and disposed of $183mn of assets at a 4.2% cap rate.

LACERA $700MM to KKR, Bain

The $59B pension fund has approved $500MM to the KKR Diversified Core Infrastructure Fund and a $100MM commitment to Smart Infrastructure Capital Partners Fund I, to target smart technology infrastructure.

LACERA has also issued a $100BB commitment to Bain Capital Real Estate Fund II, a fund seeking to raise $1.6B. Fund II, which is expected to mostly target US real estate, could also target regions like Europe, Asia Pacific, Australia, and India.

Prologis 2Q 2021

Prologis (PLD) reported strong 2Q numbers, including a 2021 FFOSP midpoint increase to $4.06 that implies 7% y/y growth or a 40% gain vs the previous 5% forecast.

Results include a 10% gain in development starts and 14% more acquisitions, plus a 26% increase in dispositions. Same store NOI growth was 5.8% on a cash basis and 6.1% on a net effective basis. Same store occupancy is up 40 bps to 95.9%