Various measures of REIT valuations improved from 2022 into early 2023. The record-breaking pool includes the 7,313 early action applications prospective students sent to New Haven in December. Hannah and Mark share some of the ineffective choices that regularly appear in essays and discuss why each choice doesnt work to the students benefit. That was actually the case at Yale. It notifies the school's top choice prospects in the regular applicant pool that an acceptance letter is likely to be coming in the future. The students come from all 50 states, plus Washington, D.C., Guam, Puerto Rico, and the U.S. Virgin Islands. We will continue to closely monitor business developments and will adjust the Funds exposure accordingly. early action Should long-term interest rates begin to decline and credit spreads compress, REIT return prospects may also benefit from an improvement in valuations as valuation multiples expand (e.g., capitalization rates compress). In the first quarter, we maintained our active approach managing the Fund due to: We believe our action steps continue to position the Fund for strong long-term performance. They discuss what each decision means (and doesnt mean) about an individual, the applicant pool, and what comes next. Yale admissions officers always look forward to April, when their focus shifts from selecting students to working closely with admitted students deciding where to matriculate. However, the University is required to release that data as part of the Common Data Set initiative. Before he picked up, he expected to be notified about missing application materials from Yale Universitythe school was in that city, after allbut the message proved to be something much more welcome. REITs, for example, have leverage ratios (net debt divided by cash flow) of only 5.5 times, on average, versus a peak of more than 8.5 times during 2008-2009. We continue to closely monitor the company and may look for an opportunity to purchase additional shares in the future. The admissions officers explain how the committee considers extenuating or unique circumstances and why those circumstances will not hurt a students chances of admission. Real estate offers valuable inflation protection. Admissions officer Alfie joins to discuss how officers and committee members work together to finalize the first-year class. Sadly, only a small group of those students will end up getting in, and the truth is that most students who are waitlisted will ultimately receive a rejection letter. However, there are also students who are waitlisted and then go onto enroll at Yale and achieve great things. When do Yale waitlist decisions come out? Mark and Hannah interview QuestBridge Founder and CEO Ana McCullough about the organizations strategy for matching top low-income students with full-need scholarships at top schools. The office of undergraduate admissions will read through more than 50,000 applications to decide the class of 2026. We agree with Lloyd Blankfein, former CEO of Goldman Sachs, who said the following on CNBC on March 22, 2023, when comparing todays bank challenges to the challenges that occurred during the GFC: Its a lot different. Transcript. The views expressed in this report reflect those of the respective portfolio managers only through the end of the period stated in this report. For performance information current to the most recent month end, visit www.BaronFunds.com or call 1-800-99BARON. Throughout the whirlwind month, admissions officers, current students, faculty, and campus partners make countless connections with newly admitted students and their families. Athens, OH, The University of Chicago Just because it's likely doesn't mean it's definite. Transcript, Part 2 of 3. Though the first three months of 2023 have been full of negative developments - bank failures, the likelihood of a further slowdown in bank lending, and the possibility of a sooner-than-expected economic recession - and there are valid reasons for being cautious about the 2023 outlook, our views regarding the prospects for the stock market, REITs and non-REIT real estate securities, and the Fund remain the same. We anticipate that the tightening in credit will be focused in challenged commercial real estate segments and geographic markets - namely, class B and C office buildings. The admissions office has employed virtual tours, online information sessions and video and poster campaigns to showcase the University. Note that this statement represents the managers opinion and is not based on a third-party ranking. Though we are cognizant of the reasons to be cautious about the outlook for certain segments of commercial real estate, our preliminary sense is: Though we do not have a crystal ball into the macroeconomic, banking, and commercial real estate outlook, we anticipate: We expect a reduction in lending - in part due to the possibility of some banks hoarding deposits, a higher bar for incremental capital outlays, increased scrutiny of existing loan books, tighter bank regulations, and lower commercial real estate values - but we believe the likelihood of a widespread credit crunch is low. We believe Jeff has been an astute allocator of capital and has created tremendous shareholder value over the long term. Lastly, we believe management is an astute capital allocator focused on driving accretive value per share. They share dos and donts for the interview and discuss how interview reports are considered in Yales holistic review process. We remain positive on the long-term secular growth trends under-pinning wireless tower REITs including strong secular growth expectations for mobile data usage, 5G technology, autonomous cars, connected homes, and 3D video; all of which will require increased wireless bandwidth and increased spending by mobile carriers. We also believe there is a wall of capital from private equity companies that is interested in acquiring self-storage real estate should valuations in the public market become attractive relative to other opportunities. Miranda told The Daily in January. We believe the odds of a banking crisis and a deep recession are low. Multi-Family REITs (9.1%): In the first quarter of 2023, we increased our exposure to apartment REITs Equity Residential (EQR) and AvalonBay Communities, Inc. (AVB). Morningstar calculates the Morningstar Real Estate Category Average performance and rankings using its Fractional Weighting methodology. This episode is an update to Episode 6: Essays: The Little Stuff, originally released in summer 2020. Regarding the possibility of real estate loan defaults, our view is that it will be mostly isolated to a manageable portion of class B and C office real estate and many lenders will choose to work with their borrowers to modify loan terms rather than. Most colleges ask applicants to respond to several shorter questions that are unique to their school. The company is growing faster than most REITs and pays a 4% annual dividend, yet its shares are valued lower than most REITs. For the 25-year period ended March 31, 2023, U.S. equity REITs have delivered a better cumulative return than the S&P 500 Index, fixed income alternatives, international equities, and commodities. Health care real estate fundamentals are improving (rent increases and occupancy gains) against a backdrop of muted supply growth in the next two to three years due to increasing financing and construction costs and supply-chain challenges. However: We expect commercial real estate growth to slow due to our expectations of tighter credit conditions, increased unemployment, moderating economic growth, and slowing growth in leasing activity, real estate development, and acquisitions. 1394. I and the rest of our Baron real estate team - David Kirshenbaum, George Taras, and David Baron - remain energized, focused, and busy meeting with and speaking to real estate management teams. Despite managements expectation to grow its cash flow by approximately 10% in 2023, far in excess of most REITs, the shares are valued at a significant discount to most REITs, and the company currently pays a 5% dividend. You may obtain them from the Funds distributor, Baron Capital, Inc., by calling 1-800-99BARON or visiting www.BaronFunds.com. Transcript, Every admissions decision is made by a committee composed of five members of the Yale community. Our real estate team continues to work hard to take advantage of the sell now and ask questions later mentality that has been pressuring several public real estate stocks by purchasing best-in-class real estate companies at highly discounted valuations. A few days later, an email was sent to me with a list of schools offering the course; amongst them was the University of the People, the school I got admitted to. We believe senior housing operating fundamentals have bottomed. Transcript, Applicants to Yale who have highly-developed artistic talents or experience with advanced STEM research have the option to include supplementary material with their application. Is your network connection unstable or browser outdated. The average occupancy rate for manufactured housing is 97% versus 87% in 2009. Factors that weighed on the companys share price performance include: (i) concerns that a more challenged economic and capital markets environment could lead to distress for some of the companys biotechnology and health care tenants; (ii) the possibility of tenant defaults; and (iii) the possibility that competitive supply will increase from the conversion of traditional office buildings to life science buildings. Yale (4.5%) Brown (5.0%) Dartmouth (6.2%) Cornell (~6.9%) Selectivity is highly associated with Ivy League rankings; that is, the highest-ranked schools tend to have the lowest acceptance rates. Read on to learn more. Does not involve the biggest banks. Here's What You Can Do, Important College Admission Deadlines Students Can Still Meet This Year, Top College and Financial Aid Application Terms You Need to Know, Important College Admission Terms: Schools, People, Applications, and Deadlines, Our Best Advice for Tackling Your College Applications, Minority Introduction to Engineering and Science. Public Storage Incorporated is the worlds largest owner, operator, and developer of self-storage facilities. We are pleased to report that as of March 31, 2023, the Fund has maintained its: As of 3/31/2023, the Morningstar Ratings were based on 233, 209, and 233 share classes for the 3-year, 5-year, and Overall periods, respectively. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. It is valued at a 6.4% implied capitalization rate representing a discount to private market transactions in the high 4% to 5% capitalization range. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Looking for more information about college admission? Heres what a Yale likely letter looks like! The consistent increases in applications are a positive sign that our pivot to a virtual outreach strategy has been successful, Dunn told the News. Admissions officer Corinne also joins to share how Yale admissions staff review QuestBridge applications. In our opinion, a further pullback in credit is likely to result in a similar outcomes to those that the Feds interest rate increases were intended to achieve that is, slower economic growth, more job losses, and lower inflation. For example, 7- to 10-year BBB bonds increased from 2.8% early in 2022 to 5.5% in March of 2023. Conversely, we have trimmed or exited holdings in real estate companies that have more leveraged balance sheets, are small and less liquid, or are geographically exposed to real estate markets that face headwinds. Transcript, After every application has been read and has gone through an area committee, theres one final step before decisions are released. We expect losses to banks will be smaller than feared because lending standards have been more conservative than in the past (e.g., GFC) - higher debt service coverage ratios and lower loan-to-values - and property prices have mostly increased in the last 5 to 10 years. An acceptance through a likely letter, though without the formality of an official acceptance letter, can function as a stress-reliever after the pressure of submitting college applications. I'm under the impression that it isn't something schools advertise about very often, he said. I am very against the concept of worrying, he said. Should economic growth continue to decelerate and perhaps lead to a recession, self-storage business fundamentals have historically held up well during economic downturns. 2023 Morningstar. We expect commercial real estate challenges to be largely isolated to class B and C office real estate, and, to a lesser extent, retail real estate. Despite that, the admissions committee at Yale still admitted a typical number of students during its early and regular decision processes for the 2020-21 application cycle. Interestingly, this decision led to the 2025 graduating class to become the largest class in Yale history since just after the second world war. Led by CEO David Simon, its management team has a long track record of solid capital allocation decisions while managing its portfolio especially well. well notify you about new articles, scholarship deadlines, and more. Transcript, Many applicants have an evaluative interview with a Yale student or alum as part of the application process. To help applicants understand which choices are more or less likely to help their candidacies, Hannah and Mark invite their colleague John to join in a game of up-voting and down-voting common application choices. Business fundamentals and prospects for many REITs remain solid although slower growth is expected in 2023, The contractual nature of cash flows provides a high degree of visibility into near-term earnings growth, Balance sheets are generally in good shape, Dividend yields are well covered by cash flow and are growing for most REITs, Several REITs have inflation-protection characteristics, Owns unique and well-located real estate assets in markets with high barriers to entry combined with attractive long-term demand demographics, Enjoys strong long-term growth prospects together with a leading competitive position, Maintains a conservative and liquid balance sheet, Employs an intelligent and motivated management team that is an excellent allocator of capital and has interests aligned with shareholders, The emergence of tailwinds and headwinds in certain segments of real estate, Unusually elevated stock market volatility, Secular growth opportunity for alternative assets. Dunn noted that the increase in international student applicants outpaced domestic application growth this year, though both have risen in the past two application cycles. A debt-funding gap may occur when a borrower seeks to refinance real estate debt at a time when the expected value of a real estate property has declined and/or less debt is provided by the lender (lower loan-to-value). Director of transfer admissions Marisa shares advice for transfer applicants especially those enrolled in community colleges and director of Eli Whitney admissions Patricia shares insights for nontraditional students especially US military veterans. Union, NJ, Caldwell University The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable). They may also negotiate a discounted payoff with the lender or an extension and modification of loan terms if property income conditions are expected to improve. Prologis has an unmatched global platform, strong competitive advantages (scale, data, and technology), and attractive embedded growth prospects. Following an eventful and volatile first three months of 2023, our current views can be summarized as follows: We remain optimistic about the prospects for the stock market, public REITs and non-REIT real estate securities, and the Baron Real Estate Income Fund. A likely letter functions similarly to an acceptance during the Early Decision or Early Action period of college applications in the fall, Trustin said. We believe robust embedded growth should contribute to at least high single-digit earnings growth for the next several years. We believe the correction in real estate share prices in 2022 and the ongoing share price weakness for several real estate companies in the first three months of 2023 have created several compelling investment opportunities. This stands in stark contrast to the U.S. housing collapse that contributed to the GFC. These developments would be deflationary. likely letters The valuations of several REITs and non-REIT real estate companies are cheap. The shares of the Funds holdings in industrial REITs - Prologis, Inc., EastGroup Properties, Inc., and Rexford Industrial Realty, Inc. - performed well in the first three months of 2023 following strong quarterly business results. Simons size and access to capital are distinct advantages in the retail real estate industry. We are truly seeing the very best prospects from more than 150 countries and territories from all four hemispheres.. Digital Realty Trust, Inc. detracted from performance during the quarter. The Baron Real Estate Income Fund received 4 Stars, 5 Stars, and 5 Stars, respectively. She previously edited for WKND and wrote about admissions, financial aid & alumni. Brookfield Renewable Corporation is one of the worlds leading owner and operators of clean and renewable energy solutions with 90% of the companys cash flow contracted under at least 10-year contracts with the majority having inflation protection characteristics. Office owners are expected to have a debt refinancing gap of $53 billion (in our opinion, this amount is not alarming). Higher debt service and refinancing costs and a moderation in growth are likely to lead to an ongoing uptick in commercial real estate delinquency rates. RD Application Deadline is: January 2. We remain optimistic about the prospects for each company. We prioritize real estate companies that have this two-pronged return profile because they have the potential to generate better returns. Brookfields financial and operating capabilities are, at times, the tie breaker that results in the company being chosen to participate in complex transactions across multiple geographies that require a heavy operating component. The dearth of new real estate construction compares favorably versus past real estate cycles when the overbuilding of commercial and residential real estate contributed to a deterioration in real estate business prospects. Transcript, For their thirtieth episode, Hannah and Mark revisit the application reading process detailed in episode 1. The shares of Alexandria Real Estate Equities, Inc., the only pure-play publicly traded landlord and developer to the life science industry, declined in the first quarter of 2023, alongside most traditional office REITs. We are identifying real estate companies that offer prospects for both valuation multiple expansion (or cap-rate compression) and two- to three-year earnings or cash flow growth. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. This letteror call or e-mailis used by colleges to notify applicants of likely admission before official decisions are delivered. Every year officers read more than 35,000 applications cover to cover and collectively make admissions decisions on each one. Current and future portfolio holdings are subject to risk. In our opinion, forecasts of widespread distress in commercial real estate are unduly alarming, sensationalized, and unlikely to materialize. While the company is enjoying strong bookings from its smaller enterprise customers, a much-improved pricing environment, and limited new supply in key markets, it was unable to convert its attractive top-line growth to cash-flow per share growth given higher interest rates, foreign exchange headwinds, and financings.