Real Estate
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News and Views
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Macro/Technicals
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Active Names
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Earnings
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Sector News, M&A, Capital Raises
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Top Events/Earnings Calendar
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News and Views
WYNN reported last night and touted their prospects in Macau; revenues there are up 74% and EBITDA up over 80% with the opening of the Encore Macau. The stock traded down 3.3% after the close on volume of just over 300k. With the stock up over 15% on the month and LVS reporting a strong quarter earlier in the week perhaps a lot of the good news was baked in. SPF, in keeping with the trend for the homebuilders, reported new orders that were 25% lower than the estimates. EPR reported a better number but guided to the lower end of the range. SPG reported a solid number and reaffirmed for the full year (Occupancy 93.1% vs. year ago 92.3%). AIV guided the full year higher after reporting 8c better on the top line on revenues of $295M vs. Reuters $276.9M. On the desk we were very active in the homebuilders and heavily weighted to the buy. We also had a number of the casino names to buy (some short covering). In REITs we were again active trading swap orders and remained slightly better to buy overall.
Macro/Technicals
SP Futures: 1092; -0.38RMZ: 695.21; -0.88
S&P Real Estate Index: 108.19; -1.17
XHB: 14.94; +0.64
IYR: 51.47; -0.89
SNL U.S. Gaming Index : 0.37
Leaders: FVE +23.3%, CAR +7.2%, FCH +6.4%, BZH +5.5%, BEE +3.9%, HIW +3.6%
Laggards: ANH -6.6%, CMO -4%, PLD -3.3%, GRT -2.9%, BYI -2.9%, EQR -2.9%, DCT -2.5%
Active Names
REITs: MFA, HTS, PLD, AKR, GRT, TCO, MAC, AMB, ROIC, HPT, HCN, VTR
Homebuilders: PHM, LEN, BZH, SPF, RYL
Travel Leisure: ISLE, MTN, WYNN
Distressed: LALLF
Other: FBCM
Earnings
AIV… Better Numbers…0.41; $295M vs. est. 0.33; $269.3M
BPO… beat by 3 cents… 0.30 vs. est. 0.27; $378.6M
MDC… missed; better Revs… (0.08); $326.3M vs. est. 0.03; $311.5M
SPG… Beat by 4 cents… 1.38; $933.6M vs. est. 1.34; $906.4M
Sector News, M&A, Capital Raises
Real Estate
Certain mortgage bonds tumbled early Thursday by the most relative to Treasuries since March on concern that refinancing trends may change. BBG
· Fannie Mae-guaranteed 6.5 percent mortgage securities, containing loans with average rates of about 7 percent, were underperforming Treasuries by 0.09 cent on the dollar as of 3 p.m. in New York, paring an earlier relative drop of 0.24 cent, after climbing to a record 109.94 cents two days ago
· Hedge Fund Sees Risk in Mortgage Bonds After 28% Gain - BBG
· Metacapital Management LP, the hedge-fund firm run by former Lehman Brothers Holdings mortgage-bond trader Deepak Narula, returned 28 percent in the first half of this year, boosted by government-backed debt that benefits from limited homeowner refinancing.
· Now the New York-based firm is seeking to protect against one of the “biggest” risks in the $5.2 trillion market for agency mortgage bonds, Narula wrote in a July 22 letter to investors. That’s the potential for the U.S. to boost refinancing amid record-low loan rates by changing the rules at taxpayer-supported Fannie Mae and Freddie Mac, he wrote.
· Homeowners with $2 trillion of debt would save $40 billion to $50 billion annually with a “one-time amnesty,” Narula, 47, said in the letter. The “only losers,” if all Fannie Mae and Freddie Mac loans could be refinanced, “are the security holders of mortgages that are paying above market interest rates,” he wrote
Genworth Reports Profit as Mortgage Results Improve
· GNW: reports a mixed quarter…
· weak mortality
· Capital ratios, liquidity look OK
· Book value increased 8% sequentially
· call 9AM dial in (877) 548-7906.
· Genworth Financial., the mortgage guarantor and life insurer, reported a profit for a fourth straight quarter as results improved in its business backing home loans.
· US Mortgage Insurance Reported loss results of $40mm, close to the $36mm loss reported last quarter although worse than CS’s estimate of a $36mm loss
· Good news on Mortgage Insurance : new flow delinquencies were down 4% sequentially
US mortgage rates set new lows a 6th straight week
· (Reuters) - Fixed U.S. mortgage rates set record lows last week for the sixth straight week, keeping affordability high for borrowers who can get loans, home funding company Freddie Mac (FMCC.OB) said on Thursday.
· http://www.reuters.com/article/idUSN2924663420100729?rpc=6
Popular 'Zero Down' Mortgage Program Makes Comeback – WSJ link
Administration's Housing Bailout: The Big Disconnect – CNBC link
· "We're not protesting; we're trying to get his attention," said one woman carrying a big orange sign. They simply want more government money for low-income home ownership and mortgage modifications. By and large they were Obama supporters, who felt that the president had focused too much attention and money on the banking industry and not enough on the housing market.
· http://www.cnbc.com/id/38473223
MDC : MDC Holdings reports… MDC Holdings 2Q Loss Narrows, Helped By Tax Credit; Orders Up
PKY: PARKWAY PROPERTIES REPORTS MAJOR CUSTOMER RENEWAL
SPF: Standard Pacific reports home sales; call 11am et
Standard Pacific reports Q2 EPS 5c vs. consensus of 2c - Reports Q2 revenue $317.2M vs. consensus of $262.85M.
COHN Cohen & Co. announces strategic transactions
WRE Washington REIT reports Q2 FFO
HCN Health Care REIT increases quarterly dividend by 1.5% to $0.69 from $0.68
DCT DCT Industrial Trust inc. acquires bulk distribution property in Southern California for $4.5M
EPR Entertainment Properties Trust reports Q2 FFO
BHS Brookfield Homes reports Q2 EPS
CPT Camden Property reports Q2 FFO ..reports, guide better
ESSX Essex Rental Corp. reports Q2 EPS
Gaming, Lodging, Leisure
WYNN reported significantly better than consensus estimates. Good guidance
· Recall, LV results were pre-announced on 7/21
· Street is upping numbers today
· Wynn Macau driving the upside
· And …..importantly , company saw improving trends on the Strip!!
· NOTE WYNN is up over 15% MTD
PRXI Premier Exhibitions announces 1M share repurchase authorization
CLUB Town Sports International reports Q2 EPS
UWN Nevada Gold & Casinos reports Q4 EPS
Las Vegas Sands Rethinks Macau VIP Strategy After Dismissing Jacobs
· (Dow Jones)--Las Vegas Sands Corp.'s Macau unit is taking a second look at how it markets itself to high rollers after last week dismissing its chief executive, Steve Jacobs, who was a key proponent of direct marketing to clients.
Top Events/Earnings Calendar
Today's Earnings: AIV, SPG, BHS, BPO, MDC