Phocas Financial Issues First Quarter 2023 Investment Outlook for REIT Market

ALAMEDA, Calif., Dec. 6, 2022 /PRNewswire/ -- Phocas Financial Corporation ("Phocas"), an employee-owned registered investment adviser specializing in equity REIT and small-cap value equity investing, today issued its Q4 2022 commentary and Q1 2023 REIT investment outlook. 

Phocas manages some $750 million, and has managed REIT, Small Cap Value, and Equity Income investment strategies since its founding in 2005.  Phocas' Q4 REIT strategy highlights follow.

• Investor concerns about decelerating earnings and softening fundamentals are discounting relatively strong 3Q22 earnings across most real estate sectors and often positive Wall Street views of higher quality names recovering from depressed prices during the quarter.
• Aim to strike a balance between stable/defensive groups such as storage and cell 'phone towers, as well as companies trading at steeper discounts such as offices and select healthcare and retail names.
• Because of rising wages and labor shortages we expect labor pressure to remain a key concern for healthcare and other REITs in 4Q22 and into 2023.

Yolanda Foreman, President of Phocas, said, "Most of us will continue to live, work, shop, use our cell 'phones, and secure our electronic data. These ongoing life activities will continue to present attractive REIT investment opportunities worthy of consideration even by conservative investors."

James Murray, Portfolio Manager, commented on the outlook, "Entering the first quarter of 2023 investors should try to focus their portfolios on companies with attractively valued fundamentals in growth sectors like Health Care and Towers. Regarding REITs being able to adjust pricing rapidly to adapt to inflation, interest rate changes, and perceptions of economic health, consider the speed with which prices of hotel rooms can be changed.

We believe that commercial real estate remains attractive. For example, we continue to believe that Health Care deserves attention due to impacts of the Pandemic, including increased utilization and demand for medical office facilities. For example, dialysis centers in shopping centers can sustain and even boost valuations of retail real estate through increased consumer foot traffic."

Phocas Financial Corporation was founded in 2005 and is based in Alameda, California. The firm is 100% employee-owned. Phocas' partners are William Schaff, Yolanda Foreman, James Murray, Steve Block, and Kevin Granger. The firm manages separate accounts and a mutual fund for institutional investors, investment advisors, and individual investors. Phocas' client roster also includes several managers of managers working on behalf of large investors including significant U.S. public pension plans. 

The firm currently manages three strategies: U.S. Equity Real Estate Investment Trusts; U.S. Small Cap Value equities; and U.S. Equity Income which invests in equities, fixed income instruments, and preferred securities. The investment strategies at Phocas are designed to deliver attractive long-term returns with moderate risk and low turnover. Capacity constraint is a core value of Phocas. The team will cap assets under management in each strategy at levels designed to protect their ability to outperform strategy benchmarks for investors.

Contact Information

Investors
Yolanda Foreman
510-523-5800

Media
Yolanda Foreman
Phocas Financial Corporation
[email protected] 
510-523-5800

SOURCE Phocas Financial Corporation