ESR-REIT
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| LOCK|^QyqK& | LOCK|n>X | LOCK|!Y@YwQ |
ESR-Logos REIT's Q2 2022 Results Impressive; Increasing Our FVE on Higher Growth and Better Margins
No-moat ESR-Logos REIT (formerly known as ESR-REIT), had second-quarter 2022 results with plenty of positive takeaways. The biggest highlight is the impressive double-digit positive rental reversion of 14.3%, driven by its logistics and general industrial assets, which clocked a positive 22.4% and 18.1%, respectively. In lieu of the strong leasing performance, management has upgraded their guidance to a positive 6% to 7% rental reversion from the previous positive 2% to 3% range. There is further good news on the net property income, or NPI, margin front where more than 90% of the portfolio utilities expense will be on a pass-through cost recovery basis from the second half of 2022.
