Just read NAREIT’s outlook of real estate.
So here are the outlooks and my thoughts-
Data Centers have long term potential-
Indeed. But it is priced too perfection. Unless we have a big drop after the elections, I am not buying them Of course, if you are a family office or endowment, not a bad idea to add. For me the rewards are not as large as other REIT investments.
Health Care REITs have new risks
This sector has already been going down before COVID19 due to high costs and overpaying for facilities. I don’t see a simple way out. So I am not looking at Health Care REITs.
Industrial Sector doing well
Industrial REITs have long term potential just like data REITs. But they are also priced to perfection. Good for family funds and endowments but not for me unless there is a sudden crash. So for now, pass…
Infrastructure REITs have potential
Indeed, they can be a great play once the infrastructure bill passes-
But the volatile commodity stocks would give more returns- Long mining firms-
Lodging Down
Really, no idea how they will recover- May be 3-5 year horizon after COVID19? There may be good value plays but a bit cautious.
Multifamily Expenses Rising
True- But still people need to live somewhere- With an exodus from the major cities, affordable and growing cities will do well. Long BRG and IRT.
Will probably put more money in-
Office REITs long view
Office and commercial buildings will be back. I think there are good value plays. LA, SF, and NYC will still provide value. So office REITs, I will be on the look out.
Retail REITs Headwind
Given that consumers have cut spending due to COVID19, once the economy opens up, there might be a huge consumption tsunami- May instantly shoot up some retail REITs. I am long Tanger Outlets but still waiting for some recovery…
Self Storage
Self Storage worked when people moved to smaller homes in more expensive cities. Right now the trend is reverse, where people are leaving expensive cities to more affordable houses with larger houses. So not much opportunity here, unless they do more shows like storage wars to recoup losses.
Timber REITs
Did not drop as much as I expected and it actually may go up a lot with the infrastructure bill. Also, other nations may build to stimulate the economy (e.g. China). A bit worried about more violent climate-
Overall, I am bullish on housing REITs. I do own mortgage REITS (AGNC, NRZ, NLY, and CHMI) for income. I would rather put more money on housing REITs but currently enjoying the dividend yield.
Thank You Jesus for REITs. I am very thankful that I can invest. Lord, let us always be thankful and help out more Amen-
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