Real Estate Stocks Surge Ahead of Fed Rate Cut, Earnings Week
Next week, the Federal Reserve is set to make a crucial monetary policy announcement amidst a busy earnings week for the real estate sector. Several realtors have reported strong quarterly earnings, pushing real estate stocks higher and boosting expectations for an October rate cut.
The odds of a 25 basis point Fed rate cut at the October 29 meeting are now at a staggering 98.3%, according to CME's FedWatch tool. This follows a cooler-than-expected September retail inflation report, suggesting the Federal Reserve will continue its easing cycle.
Several real estate companies have reported quarterly earnings that largely met or beat Wall Street expectations. RE/MAX Holdings has announced plans to expand in Morocco, while Getty Realty and Community Healthcare have increased their quarterly dividends. Entities tied to Makarora Management and Ares Alternative Credit funds have agreed to acquire Plymouth Industrial REIT in an all-cash deal valued at about $2.1B. Barclays has also upgraded Gaming and Leisure Properties to Overweight from Equalweight.
The real estate sector is poised for further growth, with positive financial results and expectations of an October rate cut driving stocks higher. Meanwhile, Welltower is rumoured to announce a deal to buy Barchester Healthcare for around £4B, and Lineage has appointed Robb LeMasters as CFO, effective November 10. The upcoming Fed announcement and earnings reports will provide more clarity on the sector's trajectory.
