REIT Chat

This is set up for those wanting to chat about Real Estate Investment Trusts (REITs).

Try to keep this chat line open for REIT discussions–only rule is to leave politics aside.

269 thoughts on “REIT Chat”

  1. GOODN popped right prior to closing; 500 (or 600) shares traded as high as 28.87. Congrats to whomever was able to sell that high.

  2. Sold out my large (for me) common reit positions I only added in past 4-6 weeks. ESS, REG, ROIC and UBA. Thought they were way undervalued based on real NAV alone so figured a good long term hold until value was realized. Hey realized a lot of the value in one day so sold all for +26% gain. Take the profit and run. Will be watching for pull back in next few weeks to pick them up again.

  3. EQR common up 28% this morning, 11/9/2020. Even with the vaccine exuberance that seems excessive. Anyone care to speculate why?

  4. Feeling brave?
    VNO prefs below par, past call, little rifi risk at these coupons, coming x-div, beat down common still paying, beat down epicenter of work-from-home NYC, experienced managers with credit connections, just refi-ed a project for 500MM.
    Fear in this market. Got cash and faith in NYC snapback? Place a lowball buy order and wait ?
    Back home throwing out ideas from a view of the screens.
    PS: Spreads on the pref market as a whole are very wide to Treasuries historically. May lend some long term stability to hold-tactics.

    1. How indeed will office attendance change in 2021 and 2022? Some assert that office attendance (and by extension, occupancy) will never recover. I’m not so sure: if nothing else, I believe that economic growth will outweigh any decline in office attendance (I say this from the standpoint of having worked in the tech industry and seen the pendulum swing back and forth on in-person vs. remote work attendance).

      In any case, to the specific case of VNO, I just did a quick comparison of occupancy rates reported in the VNO Dec 2019 10-K vs. the Jun 2020 10-Q. They report that in New York
      – Office occupancy is down 0.5%, to 96.4%
      – Retail occ is down 10.9%, to 83.6%
      – Residential occ is down 7.1%, to 89.9%
      – Overall NY occ is down 1.5%, to 95.2%

      I’d welcome any speculation as to what that means for VNO pfd’s.

      And who knows what the Sep 2020 10-Q will bring (due to be filed next week, I believe)?

    2. Joel A- Thanks for the heads up. Maybe pick up a little of the VNO- K issue? Going to do a little more research this week.

      1. SDMarc, I’d be interested to hear the results of your research, and your thoughts on the New York & SF office/retail markets VNO is tied so closely to.

        1. Bur Davis- Still processing VNO. Stong management, great buildings, strong balance sheet, long term leases (unlike residential reits in the cities). Will prob buy if drops to the $23s on bad news. Here is Moody’s recent report gives good insight
          New York, October 16, 2020 — Moody’s Investors Service (Moody’s) has confirmed Vornado Realty L.P.’s Baa2 senior unsecured ratings and its parent Vornado Realty Trust’s (collectively ‘Vornado Realty’ or ‘the REIT’) Baa3 preferred stock concluding the review for downgrade initiated on July 15, 2020. In the same rating action, Vornado Realty L.P.’s senior unsecured and subordinate debt shelf ratings and the parent’s preferred stock and senior unsecured debt shelf ratings were also confirmed. The rating outlook is negative.

          The rating confirmation action reflects the sizeable new lease signing at one of its development projects, the REIT’s modest near-term lease expirations and strong liquidity. The rating also incorporates the expectation that REIT will pursue meaningful deleveraging transactions in the next 1-2 years.

          The challenges to reducing leverage against the backdrop of weak office leasing volumes and the difficult operating environment for New York city retail and Vornado Realty’s showroom business are the key considerations in the negative outlook.

          The following ratings were confirmed

          Issuer: Vornado Realty L.P.

          Senior unsecured, at Baa2

          Senior unsecured shelf, at (P)Baa2

          Subordinate shelf, at (P)Baa3

          Issuer: Vornado Realty Trust

          Backed Senior unsecured shelf at (P)Baa2

          Preferred Stock at Baa3

          Preferred Shelf at (P)Baa3

          Preferred Shelf Non-cumulative at (P)Baa3

          Outlook Actions:

          Issuer: Vornado Realty L.P.

          Outlook changed to Negative from Rating Under Review

          Issuer: Vornado Realty Trust

          Outlook changed to Negative from Rating Under Review

          RATINGS RATIONALE

          Vornado Realty’s ratings reflect the REIT’s well occupied portfolio of high-quality office assets, diverse tenant base, elevated leverage metrics including secured leverage and strong liquidity position. The rating also considers the REIT’s large development pipeline, geographic concentration and proven ability to access the mortgage markets to meet funding needs. The rating incorporates the expectation that Vornado Realty will pursue operational and capital strategies that limit the strain on leverage metrics in the current environment while increasing the likelihood of steady and significant improvement by 2022.

          At the end of Q2 2020, Vornado Realty’s operating office portfolio in New York, Chicago and San Francisco were 96% occupied. Occupancy in its New York retail portfolio declined by 9.3% in the second quarter. The cash net operating income (NOI) from the retail segment and Chicago asset, including the showroom business, in Q2 2020 was 20% lower than the prior quarter due to the pandemic. In comparison, cash NOI for Vornado Realty’s New York and San Francisco office segments declined by a modest 6%. Moody’s estimates that the REIT’s aggregate income will grow in the next few quarters but would likely remain below the pre-pandemic level until at least the first half of 2022. The REIT’s manageable lease maturity schedule, less than 15% of its office leases in New York and San Francisco (based on annualized base revenue) expiring by YE 2022, is credit positive as it reduces the potential for meaningful deterioration in office occupancy or NOI in the current disrupted environment.

          Renewals will likely dominate lease activity in the next few quarters. Deferral of the longer-term leasing decisions also allows tenants to better evaluate evolving trends such as remote working, distributed office locations and migration to economical office markets.

          In the second quarter of 2020, Vornado Realty’s aggregate cash rent collections were healthy at 88% without adjusting for deferrals and collection in the office segment was higher at 93%. Nevertheless, Vornado Realty, like other landlords will have to work with its retail tenants, especially the smaller operators who are facing severe liquidity issues, with deferrals, abatements and other forms of concessions.

          As the REIT continues to invest in its large development pipeline, aggregate outlay of $2.2 billion, its high leverage metrics will be further strained. The Facebook lease signing for the Farley building office space has reduced income risk related to the development projects and the steady pace of condo sales in the 220 Central Park South project mitigates funding risk to some extent.

          Vornado Realty’s aggregate leverage metrics are elevated for the rating level and the REIT’s preference of non-recourse mortgage debt results in high secured leverage and a modest yet high quality unencumbered asset base. The REIT’s net debt + preferred to EBITDA, including its share of joint-ventures and 100% of Alexander’s Inc.(NYSE: ALX) and excluding the Moynihan train obligation, was 9.3x at the end of Q2 2020 and would likely increase by 0.5-1.0x due to a decline in recurring EBITDA and a larger debt balance due to development capex. The ratio is about a turn lower if calculated using stand-alone GAAP reported financials. The debt + preferred to gross assets metric was 50.4% at the end of Q2 2020 and secured leverage was 36.7%, including its share of joint-ventures and 100% of Alexanders, and the ratios were 42% and 26% on an as reported GAAP basis.

          The leverage tolerance for Vornado Realty is moderately higher than similarly rated peers due to its track record, diversified capital structure, including a high proportion of non-recourse debt and preferred stock and pending income recognition for leases signed at the development projects. The high unencumbered asset coverage (unencumbered assets/unsecured debt) and unsecured interest coverage (unencumbered EBITDA/unsecured interest) ratios are significant credit positives that support modestly higher aggregate leverage tolerance.

          The REIT’s liquidity profile is excellent with substantial availability on the revolver, a large cash balance, proceeds from condo sales and modest near-term capital needs. At the end of Q2 2020, Vornado Realty had almost $1.7 billion of remaining capacity on its two credit facilities, and over $2.2 billion in cash, including its share in unconsolidated joint ventures and Alexanders Inc. The steady pace of condo sales at the 220 Central Park South project has provided funding for a material portion of its development capex in the next few quarters. The REIT has $2.8 billion of maturing mortgages through YE 2021 and most will likely be extended, or refinanced. Remaining capital spend for the ongoing projects, approximately $1.4 billion, is modest relative to available capital resources.

          The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Our analysis has considered the effect on the performance of commercial real estate from the current weak economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety.

          FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

          An upgrade is unlikely and would require net debt to EBITDA close to 8.0x, fixed charge coverage above 3.0x and secured leverage below 20%, all on a consistent basis and including pro-rata share of JVs.

          The ratings could be downgraded if weak operating trends persist and the REIT is unable to execute significant deleveraging activities in the next 12-18 months. Debt + preferred to gross assets, including pro-rata share of JVs, remaining above 50% or fixed charge consistently below 2.5x are factors that could cause a downgrade. Inability to increase leasing volumes or execute transactions that will lower net debt outstanding and thereby reduce net debt to EBITDA to close to 9.0x by YE 2022 could also precipitate a downgrade.

          Vornado Realty Trust (NYSE: VNO) is a large office focused REIT that owns over 22 million square feet of office space, including its share in unconsolidated joint venture assets, in New York City, Chicago and San Francisco, has interests in over 2.2 million square feet of street retail in New York City, 1989 residential units and a hotel in New York City.

          1. Sorry Marc this went to spam and I got it out–not sure why–maybe it kicks long posts out.

          2. Guys, I will offer my two cents as I now got my last 100 shares in today at $64 on this and most arent even aware of it. There is a third option to play VNO which is what I am doing as Tim doesnt have this one listed…First I consider this a high risk bucket long term play despite the Baa3 credit of the preferred. Im assuming things will get worse before it gets better in office reits and Vornado with most of its assets (and many of them very prized despite the office reit mess that is going on) in NYC /Manhattan area this is the ground zero of “office flight”.
            I bought the convertible preferred VNORP. Based today off VNO-L at 24.34, one is giving up 50 basis points but in return get a convertible that currently is owner optional convertible to common at a 1.953 ratio. It has been adjusted many times since 1997 issuance when it was originally 0.687. So one gives up a few bps of yield, but gains in common stock participation appreciation. As recently as February pre corona it was over $120. I dont expect any real appreciation near term at all. But while one is waiting (and it may never occur, who knows) one does sit above the common and has equal footing with the other fixed preferreds. Me personally, I would have no interest in a 5.5% fixed perpetual office reit. I think one can get that yield in safer places. As I said, I dont really believe that Baa3 preferred rating as I am assuming fundamentals will deteriorate more. Whether the common has this baked in,I dunno….
            Added important thought. I bought a month ago around $65-$66, and flipped 100 of them at $68 or so. Then I later discovered there are only a little less than 14,000 shares left outstanding from an over 5 million share issuance back in late 1990s, so I paid $68 to get those back, ha. Most have been tendered to conversion over the years and the share count slowly dribbles lower each year. They delisted it in 2013 because the minimum share count of 100,000 was not there to remain listed on NYSE. So this is why I got in now as its hard to get, I just stumbled onto it at $65 last month and assumed this was easily bought. But after the fact researching indicted this just wasnt so, and the shrunken share count is obviously why.
            Of course one needs to remember this is not convertible into cash, just the formula above to the common. The company optional conversion is way out of the money presently. I am hoping over time the conversion continues to adjust higher as for example it 1.385 in 2007, 1.4334 in 2014, 1.5934 in 2017, and the present 1.9531 in 2019
            They are announcing quarterly results after market closes today if memory serves me.

            1. Grid, exhibit 4.3 of VNO’s latest 10-K (from 18 feb 2020), which is posted at https://www.sec.gov/Archives/edgar/data/0001040765/000089968920000007/ex43.htm, says:

              “Conversion Rights / The Series A Convertible A Preferred Shares are convertible, in whole or in part, at the option of the holder at any time, unless previously redeemed, into Common Shares, at an initial conversion price of $72.75 of Liquidation Preference per Common Share, subject to adjustment in certain circumstances. As of December 31, 2019, the conversion price is $1.9531 per Common Share.”

              Wait a minute… Don’t they mean “conversion *rate* 1.9531 per Common Share”?

              For example, in your post you give the conversion *rate* as 1.9531. Rate not price. That makes sense.

              And that’s the wording that’s used in the original VNORP prospectus, although as you point out the rate was lower (“Series A Preferred Shares are convertible at any time at … a conversion rate of 0.68728 Common Shares for each Series A Preferred Share).

              1. Not following you Bur, as your info mirrors what I said… Is this what you mean? Lets say you own VNORP and you wanted to convert yesterday. Yesterdays price was $32.50, so you would convert then at $63.47. See this convertible is close to convertible positive now. That is almost non existent in convertibles. Most are way out of the money, or busted, or will get converted at a lower price than issue price on a forced dated time. This cant happen being its not a mandatory convertible.
                If VNO can force conversion at $72.75 well that just nets you $142.08. And what if that is 15 years from now and the conversion factor keeps growing and its 3 then? Now your looking at $218.
                See this is what appeals to me…One at least has further possible upside potential…Maybe a lot down the road..All by just giving 50 bps up from the fixed perpetual with no real upside. A fair trade to me.

              2. They were sloppy in the filing and didn’t proofread it before filing it.
                They have it correct the other place they mention it in the filing.

      1. SD, I rode the coat tails of VNO via VNORP the convertible preferred I bought last month. Popped about 18% or so with it today, so I sold half to capture the some gains. Other than that a ho hum preferred day.

  5. JCAP and JCAP-B I have a couple of technical questions if anyone has any experience on this…. On Oct 26 JCAP shareholders approved the acquisition of JCAP by NexPoint Advisors. JCAP shareholders are to get 17.30 in cash and JCAP-B is to be called upon closing of the deal.. I would have thought once shareholders approved, this would be a done deal with a timetable for closing immediately made public, but so far, JCAP’s been silent on timing. So that’s one question – is this SOP or should a timetable be made available ASAP? Surprise, surprise, IR is silent upon being questioned.

    My second question is this – Once the deal closes, will JCAP-B be called immediately OR will it be subject to the 30 day notice requirement???? Anybody have a definitive answer??? It might potentially not be subject to the 30 day notice under a Change of Control…. I own JCAP-B but not JCAP.

  6. I decided this was a buying opp instead of panic opportunity. Added to my ess, reg, and nnn positions on the way down. I’m ok if I’m wrong because I have high conviction on the value in those assets. You can’t get anywhere near those yields buying the underlying assets. First time I can remember getting excited about down market. We will see.

    1. Utilities make up my largest sector holding. I believe what they provide will be needed wherever people are, regardless.

      JMO

    2. Razorbacks- I also like the preferred REITs but have recently sold all the investment grade ones because the prices are too high. Still own preferreds for Saul, umh, Monmouth, Uba. Recently I have added common REITs in grocery anchored shopping which are selling for 30% + discount to nav in my option and still pay great div(ex reg). Also own Essex (Apts) and NNN. Think these common are better options. At these discounts I like grocery shopping centers, some of the apt REITs and the retail NNN REITs. I like storage but over priced. Staying away from office and far away from mortgage reits.

  7. Now back to REITS… Just bought ESS (Essex Property Trust). Did a big deep dive while I didn’t want to jump in…the value was just there for me. 4.2% yield (almost 40% higher than last number of years). Prob about 20% under valued based on my NAV. Limited units in hardest hit West Coast Cities even though news makes it look like everyone is leaving California. Most of suburban California is performing great. San Diego, OC, Ventura etc. Any thoughts on ESS or other APT REITS??

    1. Article on SA by Trapping Value about apartment reits might be worth a look before it goes behind the paywall. I just breezed over it as I don’t have a lot of interest in apartment reits.

    2. I think Apartment reits are undervalued here and good opportunities, especially if you are a long term investor

      I own the following 3

      AVB – started a position in late March after the crash with a small add in may and a recent add in September

      CPT – started this position back in May

      EQR – started this position in September

      One of the few people I follow and trust on SA is Colorado Wealth Management fund. They have a limited focus on Reits and have had a number of good articles on Apartment reits – here is the latest

      https://seekingalpha.com/article/4379111-unique-doesnt-mean-useful?utm_medium=email&utm_source=seeking_alpha&mail_subject=colorado-wealth-management-fund-unique-doesn-t-mean-useful&utm_campaign=rta-author-article&utm_content=link-0

      1. Maverick61- Thanks for link to Colorado Wealth Management article. He seems pretty thoughtful. Used to follow him along with a lot of others on SA but overall got such a bad taste I stopped following all (will add him back). I just tried to figure out APTS myself last week and couldn’t make heads or tails. He clarified APTS issues for me. What I also like about AVB and ESS is they have it in their DNA not to cut dividends (doesn’t mean they wont in future) FYI. I’m involved in some private multi-family partnerships here is Southern Cal and I can tell you our rent collections are 99% and rent rates are stable. The news makes it look like everyone is leaving California but not really true outside San Fran and core of LA and most of those are moving to other places in CA. I like EQR but the market may beat them up worse than others for a while because they are in the heart of the storm. Buy EQR and don’t look for 4-5 years and you will have a great return.

        1. SDMarc – no problem. Yeah, Colorado Wealth Management is one of the few I like on SA. He stays in his lane focusing just on Reits, and really a subsector or two of reits at that, and does decent analysis.

          I do look for companies that , as you said, have it in their DNA not to cut dividends which is what attracted me to AVB initially as well as a couple other beaten down Reits this past spring / summer

          1. Maverick61. The thing that bothers me about some of the SA guys and I didnt realize it again until today is that I couldn’t figure out the person behind Colorado Wealth?? I like to google and see who these guys really are/were. Example. Brad Thomas puts out some good stuff once in a while on REITs but when I looked him up..he seems a little nuts. Doesn’t mean his research isn’t OK it just makes you pause a bit.

            1. sdmarc – that is true. That said, CWMF is ranked high on Tipranks

              https://www.tipranks.com/bloggers/colorado-wealth-management-fund

              and I have followed him for quite some time now and he has always been a straight shooter. FWIW I followed Brad Thomas several years ago and liked a some of his research and a few of his ideas early on but also realized he is not a straight shooter. I think the key with any of them is to always do your own research. These days, CWMF is one of the very few I trust in the articles he puts out – but I still don’t act on all of them. Just use him for ideas that fit my risk / reward profile

  8. Good evening REIT investors:

    I hope this message finds you all well. As I mentioned previously, I exited this board with regret, but will post a final positive message. After much review, and comments from a number of posters here, I was 99% convinced that the Sock Drawer and Illiquid Pages were being used to promote (and sell to novice investors) securities for their own personal gain. We can all “agree to disagree” but this is the honest and brutal truth. Please note that on any message boards there are many novice investors that will buy securities on recommendations from posters that want to put them in the “Sock Drawer” but will then sell them immediately if they can make a profit.

    Yesterday, I put up a new article on SA and will post the link below. And while I do make a couple of bucks (maybe $40 for the article), all of the recommendations in my article are long-term holds, bought for me and my family members with the expectation for 6% returns. Not great, but not too shabby either. Please also note that my limited proceeds from any article are always donated to my local animal shelter – so I am clearly not writing for any personal profits here. Below is the link, and I certainly wish everyone here continued investing success in the future. Learning, helping and educating people should be what these message boards are about. Wishing continued success to everyone here!

    https://seekingalpha.com/article/4378783-6-solution-income-for-retirement

    1. Hi KL–good to see you. Yes a person writing casually on SA will not earn much more than beer money–or in your case donating money to a worthy cause.

      1. Tim – I just write to improve my investment and writing skills and there is never any question about the money.

  9. I would like to thank everyone from this site and SA for reaching out to me in the past couple of days. It has been very humbling to see so many people reach out to me. Thank you all.

    With regret, I do plan on contacting the SEC regarding the strange trading pattern on some of the illiquid issues. I have printouts of many of the “recommendations” on this board with no trading history, but then are mentioned here, SA, and Silicon Investor, etc. Many websites pushing the same issues by the same authors, but done by a few people. Calls to Investor Relations that the issues will “not be called” seems like a similar pattern on this website as well. However, it never seems to end. The trades on some of these can be easily traced.

    No Sleep Till Brooklin

    1. Kaptain, have you ever done one of these? They go after big fish, and especially the ones that involve hundreds or billions of dollars. Remember, they are looking for “headline material,” organizations that are colluding together, and lots of defrauding. They are looking for securities that are being sold in the millions or hundreds of millions of dollars that are mis- represented and not what they are. They are looking for individuals that are defrauding and stealing from investor’s accounts. They are looking for broker dealer insider trading.

      If you are using webblog info as your stated facts, this is not enough. This wont pass step 1 of the lawyers. If your opening line is… “Well, I am reading a webblog, and there are some dudes on there saying stuff, and I dont think that is true, and by the way, i think they are really bad people…, ” you arent going to get very far. They will do an impact assessment and calculate (as an example) 100 trades for a security that is bought and sold a few times a year. Then assess against what they define as fraudulent SEC activities. The amount of work effort going into getting statements, determining what are facts and what is hearsay, getting witnesses to corroborate what you are saying (1 individual is not enough), tracking down statements, getting trade dates and times, assigning an sec investigator, getting judges to sign off on subpoena’s to collect info. Have you ever extracted information from a 50 TB dump of trade data? I could go on, but I’ll stop here.

      1. Without opining on any other aspect of this, sorry but this is not accurate Mr. Conservative. The SEC does not just go after big fish. I can assure you that the SEC has looked into “little guys” and cases of financial blog / message board malfeasance with respect to front-running and coordinated price manipulation.

        Now the SEC may not seek those out on their own, but if complaints are filed the SEC will investigate

    2. Good morning Kaptain Lou; I hope this finds you doing well. While I almost NEVER post anymore due to the same 3 A-Holes I felt it somewhat compelling to chime in on your post from 10/8/2020 at 11:32 PM. You must be a Youngin (LOL) as you stay up late!!!!! I completely agree with Mr. Conservative, as my guess is you will find this experience quite time consuming and very frustrating to say the least. These big Agencies such as the SEC want what I would call the WHALES, not the minnows. About 10 or 12 years ago their was a Venture Capitalist that was in Omaha where I live and he suckered about 100 investors into a company called “Diversified Pharmaceutical Services, Inc”. Long story made short the Venture guy collected some $20 million dollars from the 100 investors and told us how we were going to make a BOATLOAD of MONEY. Just one small problem however: The CEO was an out and out crook and the company NEVER EVEN WENT PUBLIC. I freely give you the CEO’s name: Rudy Williams. An interesting side note I even got a call from our local FBI OFFICE and they conducted a thorough interview of many of the investors in this huge fraud. I even got an attorney and when he looked up the “RAP SHEET” of the Venture Capitalist and the CEO he said Chuck you are wasting your time. He went onto say everybody and his brother was after these scheisters. The last I knew the company had closed their doors and are out of business. It was a very “VALUABLE LESSON” for me and I didn’t have to learn it twice. My point is just this: I think you will find to be a huge waste of your time. By the way I NEVER EVER buy illiquids for two simple reasons: 1. Be prepared to own it a long time as it might be a bitch to get back out of it. 2. They call is an illiquid for a REASON. GOOD LUCK TO YOU.

      1. Hi Chuck,
        Nice to hear from you again. Similar experience with a company Called Tenax and a certain Mike Brown.
        Miss your comments on banking stocks and resort stocks

      2. ChuckP–good to see you. For you interest I have a new forum being installed which will allow all kinds of interaction–including private chat areas where those of similar interest can meet up.

      3. ChuckP – I echo your concerns about this website and have the same as well. However, I am going to ask Tim if he will put up a category called “Pump and Dump” to see if we can discuss a few of these issues. I have been contacted by a number of people that still want me to post – but there are still concerns about a few people on this message board and hopefully they can be addressed.

    3. Lou – if you’re going to be in touch with the SEC think on asking them looking into the HDO bunch at Shrinking Alpha. I have taken close looks at trading patterns around issues they come out recommending and have a strong suspicion that HDO hase been doing a classic pump and dump.

      I have said same on the boards at SA and the reply I get, always from grid’s close buddy, pendy, is that they comply with SA guidelines on disclosure. Which tells me exactly nothing. Because these guys are not RIAs, are not attached to any brokerage, etc., they have zero oversight and, I believe, have used that lack of oversight to their benefit.

    4. Well now, that’s a direction I wasn’t expecting this to go.

      Personally, I think the “problem children” of this site often lack a basic believability. If I could block their comments from the RSS feed, I would. The endless supposed flippings of various preferreds to make a penny here or there… but oh I am just small potatoes, I’m not wealthy. Declarations of things going into the “sock drawer” only to be flipped again and again and again. Announcements of what was bought and sold “on the golf course.” Bragging about alleged battles with people on SA (another site I quit spending time on, again due to simple lack of credibility).

      These folks have, IMO, made this site, and others, far less useful than they could be. But it is what it is.

  10. Not sure if this will be helpful to anyone with children, grandchildren or nieces and nephews, but my only niece recently graduated from college. She has a retirement plan with her employer and is also paying into Social Security. This year I helped her to start a Roth IRA and this past month I provided her with an additional $250 if she would match the funds into the account. This week she was able to pick up 10 shares of MNR-C and 10 shares of UBP-K.

    It is a good way for her to learn about the benefits of having three different sources of retirement income and also to learn a little about the market and preferred stocks at the same time.

    1. Hi KL, I 100% agree with your idea to setup ROTH IRA’s for young workers. Since their income tax rates are low, it is a great time. Only difference is that when we have set up ROTH’s like these, we used REIT commons instead of preferreds. The goal of the account is to fund retirement something like 40+ years in the future. Over that period of time I would expect commons to outperform preferreds. Using automatic dividend reinvestments with hopefully increasing common dividends also is an advantage over preferreds. At a minimum if you use preferreds it should be a brokerage that allows automatic dividend reinvestment. You don’t want to mess with having to reinvest $5 or $10 preferred dividends, even if a zero commission environment.

      1. Tex the 2nd – good point about using common stocks over preferreds. Over time, they will most likely outperform the preferred issues especially with current rates. We actually discussed common and preferred stocks. She is actually pretty conservative and for whatever reason felt a little more comfortable with the stability of preferreds, especially since many of them will be called at par value. As the account grows over the next couple of years, I’m certain there will be a time to add in a few common stocks with a decent history of growth and dividend increases.

      2. When my sons were in high school, I was concerned that they may have too much spending money from their summer jobs, wished to develop a savings habit rather than a spending habit. At the time, I establish Roth IRAs for each and the Bank of Dad matched every dollar that they contributed. Now each has a balance of about 20K in their Roth, one just graduated college, the other is in his final year. The older son is invested in mutual funds, the younger has common, and preferred stocks including a preferred REIT (MNR-C) It has been a good opportunity to discuss investments in general and risks vs reward concepts.

    2. How many REIT’s that are public today were also public in 1976, which is when your 65 year old retiree today graduated college?

      1. Justin asked: “How many REIT’s that are public today were also public in 1976 . . “

        Justin, I count five REITS that are still trading today that were trading in 1976. Most REITS that trade today did not exist in 1976. We can stipulate that IRA’s, ROTH IRA’s, ETF’s, commission free trading and automatic brokerage dividend reinvestment did not exist back then either, so the landscape has changed a lot. The modern REIT industry came alive due to the 1986 Tax Act.

        That said, I am very comfortable allocating a percentage of assets to REITS with a planned holding period of 40+ years. We all agree that the 40 year total return statistics say that a low percentage of stocks will be positive, i.e. most will lose money. So it is a lot more certain to invest in an index, like VNQ instead of individual stocks.

        To my original point, the expected return from common REITS exceeds that of REIT preferreds, so I would stick with that.

        Ignoring that ROTH IRA’s did not exist in 1976 and without hindsight bias, what portfolio would you have constructed for a young person that just started work?

        1. Tex the 2nd – I’m just going to sign off on this message board, but always appreciated your comments. It was good while it lasted. Yahoo Finance was a good board for a number of years, and so was SA, but they have also declined recently. Today we reached a new low on illiquid stocks that are traded once a month, but several posters have now taken over the board – so it is time for me to leave here now. Best wishes to all investors, their families and wish everyone the best in the future. It has certainly been fun here! Huzza!

          1. Wish you would reconsider, kaptain lou. You are one of the few people here whose comments I still value. I have also long been really fed up with the “several posters” you refer to. I know Tim has tried various things to give them a sandbox to babble in but they just don’t get it. They seem to stay out of this article if that is any consolation.

          2. Seconding Larry’s comment, kaptain lou. I’m new to this board, but have valued your comments in the short time I’ve been here. Twenty-two years investing, pfd’s only the past eight of those.

            I actually have a few self-education questions about a few of your posts here. If you’d be open to communicating privately, my email is burdavis@gmail.com.

            1. Bur Davis – As I mentioned last night, I won’t be posting here anymore, but you are welcome to contact me on Seeking Alpha by private message if you have any general questions on preferreds. Posted a few articles on there and my KL screen name was not professional enough so I’m there as “Early Retirement Advisor” or ERA and it is pretty easy to find me there.

              Wishing everyone here nothing but the best in their future investment decisions and it has certainly been fun here for me. Always appreciated the hard work Tim has done with the website as it has been very educational for many investors. Thanks much!

              1. Just when you got my REIT ears perked up, KL… Sorry to see you go…….Add me to the please reconsider list.

                1. 2WR – it was with great regret that I decided to leave the board. There are so many great opportunities with REITs and their preferreds over the next couple of years – so clearly a difficult decision for me. Many of the posters here may be new to this area and it was always nice to discuss, especially for those that are new to this area. Probably one of my biggest regrets was that I did not help my niece open up a Roth account when she was in her first year of college – but I will help her catch up in the next few years. It is a marathon and not a sprint. But this was clearly an error on my side.

                  Some of the illiquid preferreds may actually be a good investments, but 99% of the of the investors are not able to get into those, so the board has now actually become useless to me and other serious investors. I’ve seen this before on Yahoo and now are here again when several posters take over the board. But I will now allow the board to get back to their discussion on preferreds that were issued 100 years ago.

                  As always, continued success to everyone here as it has been very enjoyable with the discussions. Thanks much to everyone!

                  1. KL, I’m not sure why we can’t have discussions on many topics on this site. There is plenty of room for discussions on REITS, illiquids, high risk, low risk, trading, dividend capture etc. Just because there is some interest in illiquids does nothing to reduce the interest in the other topics. Just food for thought.

                    1. kapil, yes it should be possible to have discussions on many topics. That requires that the various discussions be kept separate. Tim is doing the best he can by having these topic-focused threads. The problem is that certain users (I won’t name names but you all know who, or is it whom) often refuse to make their comments in the right place, often refuse to stay on-topic, often refuse to self-screen their comments for even basic relevance.

                      This eventually happens to all discussion sites. Even if proper forum software is being used, which is not the case here. Tim has largely taken a hands-off approach. Other sites go heavy-handed with moderators screening every comment, and we all know that creates more problems than it solves.

                      I have not posted much here in about 2 years. I read the new articles and I watch comments through RSS feeds. It is very easy to see the same handful of users eventually dominate every single comment thread. They refuse to ask themselves “does everyone need to know that I played golf today, is that relevant to the discussion?”. Or they do ask themselves and decide the answer is yes. Thus threads veer off-topic pretty consistently.

                      kaptain_lou is just pointing what I pointed out 2 years ago. I suggested a daily posting limit of say 5 comments per user. I think that would put a focus on being relevant, at the expense of limiting potentially worthwhile discussion. But as I said, Tim chooses to run things with a light touch, and that’s his right.

                  2. Captain, I dont know where to start, and i will just ramble with my honest comments and thoughts. I read Kapil’s response and that sparked mine. The below is just me typing as it flows… I am not angry… but maybe sad or disappointed?

                    Agreement:
                    —————
                    – Do i agree with all posts? all comments? all discussion boards? allowing anyone to join? allowing all posts? I can list about 10 more things here… The answer is no.
                    – You are leaving because you don’t agree with commentators or an idea posted here like an illiquid which is an investment idea.
                    – If everyone had to agree with everyone on every post, concept, thesis, idea, trade execution… that is called confirmation bias. How can you do a risk assessment if everyone agrees with you? This gives you a false perception that your idea is “sound” and there are no risks.
                    – You state a very good anti-thesis against illiquids. Perfect. I was glad to read that as others. But then you post, that you are leaving because you don’t agree with that? What? Thank you for posting your thoughts against the idea, but then leave because of this?

                    Site has a vast wealth of info:
                    ———————————–
                    – What site can you go to today that has more ideas that pertain to thinking about investment ideas?
                    – Yes it is largely income investing, but Tim has accommodated other ideas with the idea of bringing a broad based set of ideas to a broader audience.
                    – Just look at all the topics
                    – I am hoping that at a worst case scenario, you were saying that you won’t comment any more.. but i think you are doing yourself a big disservice if you meant that you wont be reading anything posted and not coming to this site at all.
                    – Are you saying that you wont visit this site at all, because you disagree with an investment idea? If so.. that is kinda like walking into a Baskin Robbins and saying I don’t like chocolate moca with vanilla swirl and so I’ll be leaving now.

                    Summary:
                    ————-
                    A lot of things going on with our personal lives, covid, jobs, working and living things and doing things differently. I was kinda hoping you would post in a few days and say… sorry guys, i forgot my hormone injections or something… i had to get out a rant, and now coming back. We all have those days every year where we get on a soap box or do some rants. Hey, that is ok.

                    You have great ideas and thoughts. If you are planning on living for 20 years +, I just dont understand why you are turning down a great set of people here. Turning down a great set of minds to agree or disagree with you. Turning down a great set of ideas to invest in. Turning down opportunities to where were Tim is going to take this website (when he convinces his wife that we are more important than his day job).

                    I have read your posts for a few years, and you like to educate, teach, show your ideas. The great example you posted is with your niece. I’ll leave you with this. If you are going to be around in this world…. If you don’t post, you cant teach, and surround yourself with like minded individuals. What better site out there than this can you teach people?

                    1. Mr Conservative–I will add ‘illiquid’ thread–maybe that is helpful. Thanks for your input.

                    2. Mr. C I will have to go , work is calling. But I for one wish more people commented on common stocks here not just preferred’s. Yes higher risk but quite a few provide income and some have been around as long as some of the 100 yr illiquids.

                  3. kaptain, I have benefited from your posts through the course of time and appreciate them. I think that many readers feel the same way. I hope you continue to post.
                    Thank you and best regards, No. 12

                  4. Kaptain – I usually would not comment if someone chooses to leave or not. Everyone has their thinking and reasons and I respect that. But I am making an exception and chiming in here

                    1. I have never been one to post daily. I chime in when I feel it is pertinent. I know others like to chat more. Not saying either approach is wrong but sometimes the volume of posts, especially if on a subject one is not interested on, does get high.

                    2, I own some illiquids, have for many years. But they are not suited for everyone and I think your concern is that some readers may not fully understand them and their potential risks which is commendable.

                    3. There are areas of the board – like Canadian securities – I don’t care about at all. As long as those discussions are kept on that page it is easy to bypass them.

                    4. Kudos for Tim for adding a new page dedicated just to illiquids. Hopefully all illiquid discussion can be put there so it makes it easier for people to navigate to subjects that interest them.

                    5. As a fellow REIT investor, I hate to see someone who is also very knowledgeable about Reits leave. Especially since there are not a ton of people posting about Reits here. Hopefully with the change Tim has made, that alleviates some of your concern and you reconsider. However, you have to do what you think is right

                    All the best

              2. Sorry to see you leave, KL. As 2WR says, hope you will reconsider.

                Wishing you the very best in life & Investing.

                IB

                1. Lou, you know how much I value you and Tim and have expressed such many times. Of course I follow you on SA. I hope when time allows you write more there or maybe start a monitored blog series as a contributor to SA where we can gather. maybe call it “REIT CHAT BLOG” ..I was part of a blog chat there but it devolved into politics and covid and name calling as is the case so often over there anymore like Yahoo was.. Your years as an investor and CPA provide insight that most do not!

                  An active participant on III early on, and a user of Yield Hunter from the start, I have become more of a lurker for many of the reasons you point out. I notice a lot of early adopters here are gone.. well maybe they lurk.. the site is just a source of reference for me now
                  ——
                  As far as your niece’s investment goals, you expressed ‘conservative’ and a nice 6-8% from a pfd over time or until she feels her investing oats is beyond appropriate in the bubble we live in for stocks and bonds. ANY registered investment advisor or new stock account requires you to express your goals when opening an account to allow you access to a group of investments, options, margin etc. SO you are respecting her wishes.. again in perilous times to preserve and grow capital.
                  Following your advice as someone who could retire early, a CPA who does a deep dive into any invesment- and with so many years of expertise will benefit her for sure. See you on SA where thankfully there is a mute button! Bea

          3. kaptain lou–sorry to see you go…watch in the future for a new commenting add in, that will maybe help you resolve whatever concerns you might have.

            1. Tim, your dedication to making the site as useful as possible for different people’s needs and interests is really fantastic. Thanks again for all the work you put into it.

  11. Also, for the REIT investors that like the sector and are willing to take a risk with a few companies, I’ve been buying these positions in the past few weeks:

    BFS common with a nice yield over 7%. However, I’m a buyer under $26.

    WSR common with a yield of about 7% as well, but only a buyer at $6.

    1. I snagged some BFS too, Lou, at 24.75. As we have discussed on SA, I like these mostly family owned strip/grocery anchored properties and like UBA/UBP as well and the pfds on both co’s. Saul goes xd 10/15 for .53. They have maintained the div and regardless if they tweak or cut, the properties are great.

      1. Bea – you have me beat by about $1 on the entry point, but I’m really not complaining! Both Saul and the Urstadt properties have great locations, super-high family ownership and the real estate is clearly not worth 50% of what it was a year ago. BFS does have some properties located outside the D.C. metro area, but every one of their locations (about five) in Florida is anchored by Publix, which has no debt. It is possible there could be some type of cut on BFS, but I’m expecting an increase in the next year on the UBA shares, so hopefully it will equal out.

        There is no way I would ever consider buying a perpetual preferred with rates in the 4% area now when there are so many other good opportunities.

      2. I’ll toss in the RPT-D preferred for consideration, currently yielding 9% (it also could potentially convert before the heat death of the universe).

        1. Qniform – I actually have a few of the RPT-D shares as well that I bought in the mid 30’s, but just a very small position in my higher risk area. Thanks for mentioning.

    2. Kaptian Lou. Thanks for keeping the discussion going. For other good 6%ers on common. Have to Like NNN. I own common and preferred. How do you feel about the Taubman preferreds. I used to own them. The buyout is going to court I guess in NOV but have to figure it will be settled. Their balance sheet is confusing because of the joint ventures but can’t think the family will still want get paid on the common and preferreds even if sale doesn’t happen. Mall are a mess but any value in the preferreds?

      1. SDMarc, the NNN preferreds were one of my long-term favorites and held them for years. Currently I don’t own any of the F shares because the coupon rate of 5.2% was a little low for me, but still a very, very solid holding. The common stock is probably undervalued now and they also have a great (and conservative) management team.

        At least for me, I am currently avoiding anything in the mall sector and this would include their preferreds – so at least for me I am not a buyer of TCO preferreds. Overall, I think there is just too much risk, especially when you can buy up quality companies like your NNN at reasonable prices. When I talk about “mall” stocks, I generally consider them to be companies that generate most of their revenue from clothing retailers, so I avoid anything having to do with SKT and SPG as well.

    3. kaptain lou,
      Just saw that insiders bought $ 500,000 of stock at HIGHER levels !.
      I just picked up a 500 shs in WSR at 6.33.
      I will add more, but I have more commons of Reits than ever before.
      The Common does offer more growth than the Preferred.
      Thank You

  12. While I certainly understand that investors have different income criteria based on their age and risk tolerance, I’m having a pretty good time in REIT preferreds and may write an article on SA in the next few weeks (as time allows) just to discuss some investments in the 6% range. Actually, it is still fairly easy to get returns like this if investors have a diversified portfolio. Currently I probably hold close to 40 issues. Here are some of my REIT preferreds at the present time and they clearly beat the PSA issue that was below 4%, although the credit quality of PSA is incredible.

    GOODN – right around 6.5%
    MNR-C – I like this 6.15% yield with their top tenants
    BFS-E – just a little over 6% now and they just went ex-dividend
    UBP-K – nice small company just a little over 6% now

    1. Thanks Kaptain,
      For my parents, I’ve picked up GOODN, MNR-C, and UBP-K based on your earlier comments. I’ve begun to make small purchases of BFS, UBP and REG in tax-deferred accounts. As mentioned earlier, my real estate is mostly TIPWX, but after doing some additional digging I think they are worth adding to. Your comments (and SDMarc) are very much appreciated.

      1. Mrinprofet, I actually do a little income advising for my brother and niece and I have them owning the same preferreds that I do – similar to what you are doing with your parents. Just helped my niece start up her Roth IRA (she has just finished college) and thought some good stable 6% returns in a tax-free account would be good for her. For me, as I retired early, the yields on those securities provide me with a stable income during retirement as I don’t have a traditional pension or social security.

        Also, carefully selecting a portfolio of common REIT stocks that I feel are undervalued at the present time. Probably will pick a portfolio of about a dozen of those, but know that all my selections will be winners. At least for now, it is amazing to see some of those securities trading at a 50% discount to where they were a year ago. The process will be slow, but should provide good returns (including dividends) over the next several years.

  13. To all investors here, I do look at some of the REIT articles on SA, just to get some information and sometimes they are helpful. Today, I saw this article posted by Brad Thomas, the guy that claims to be the REIT guru. Here was his post from earlier today. But here is my question: why in the hell would any investor take financial advice from someone that has a loss like this? It was posted on his Brookfield Property article from today. I weep for the SA posters that take his advice.

    Full disclosure – I have a personal NOL that is just under $2 million…. and when I was a developer I paid millions in property taxes and also created hundreds of jobs.

    1. Kaptain Lou,
      Thanks for the helpful comments on REITS and their preferreds. I’ve been following Brookfield for a while and bought into BEP, BIP and BPYU. Unfortunately, I started nibbling on BPYU around $18 a couple years ago and then watched it get cut in half recently. My mistake. I did purchase full positions of BEP and BIP very near market lows in March of this year, so have been very happy with that. After BPYU, I did some digging and realized that the return profile I was looking for was more NCREIF and less NAREIT. I invested 5% (normal position for me is 2.0%) in TIPWX (Bluerock Total Income interval fund). I liked that it was largely institutional partnerships, focused on apartments and industrial sectors, and low leverage (27%). My timing was poor… as I did it Jan 1 of this year, but the performance has been good on a relative basis.
      With the market rebounding, there’s very few commons that I’ve found interesting but REITs still look like there are pockets of value, which is where your comments come in. Thank you.

      1. mrin – I’m not really familiar with the Brookfield properties, but think their leverage and debt is fairly high. At least for now, there still remain some pretty decent values in the REIT sector both with common and preferred shares. PSA recently issued a new one with a rate less than 4%, so I will just stick with my 6% yield on MNR-C for now. It should be a stable investment because it can be called next year. Wishing you continued success with your investments.

  14. After doing a longer term deep dive I took an large position (for me) in three “grocery anchored” shopping center REITs. (REG, ROIC, and UBA). I think the public markets are more off the mark in this sector than any other at the moment (30-50% under real NAV – real because these type of assets are still in demand). There are others like KIM in this space and they mostly seem to trade in tandem looking at past history but my three are the only “pure plays” in this category. The others have added more power centers and are venturing in to other asset classes over the past few years (ie mixed use, residential, etc). Anyone else have thoughts on these. Thanks

    1. SDMarc, I agree that the grocery anchored shopping centers have been beaten down way below NAV as well, as many of them have great locations and the properties can be used for various purposes. In the past few months I’ve gone long on UBA and BFS common stock because I feel they are undervalued. Not followed REG and ROIC very much in the past and went with the other two because I have followed the companies and owned their preferred stock for a number of years. Not really a fan of KIM, as some of their properties have a number of retailers that look somewhat weak to me.

      1. Kaptain Lou-
        Thanks for feedback. REG and ROIC are both investment grade so they have very low cost of funds in this environment. ROIC (they temp suspended dividends which I am OK with now) owns 80 similar grocery anchored centers on the West Coast as UBA owns in NYC metro area (I think B/B+ quality but in areas that hard to build more). REG owns 400 centers nationally in best markets but has keep their full dividend intact and plans to keep it that way. REG properties seem to me to more A/A+ quality (10 locations in my market and all top quality). Both REG and ROIC also have almost no mortgages on the properties which gives them more flexibility. I also own BFS preferreds but harder for me to handicap the common because of change of focus to “transit” oriented large mixed use development projects. They seem to be doing OK with the new projects so far and actually might help the common over time because the market hates retail but also more question marks. Thanks for all your insights on these pages.

        1. SDmarc – thanks for your comments as well. I’m out here on the east coast and close to Gettysburg, PA, so I do try to buy some grocery anchored REITs where I know the territory and the tenants. Overall, Ahold is a good tenant and so is Weis Markets (WMK) because they have no debt. In the south, BFS does have some centers, but they are anchored by Publix and they have no debt as well and are employee/employer owned. Yes, BFS is moving into some other areas, but they are right outside of the metro area in Washington DC and Maryland has the highest per capita income of any state.

    1. Both BRG-A and C went x-div today and shares bot now won’t be subject to call… yet BRG-C 7.625% is at 25.30 and BRG-A 8.25% is at 24.97 last… Go figure…… BRG-C isn’t callable until 7/21

    1. Great article Razorback, thanks for sharing. It clearly shows the strength of the industrial real estate class right now. While I’ve never owned the common shares, I’m a long-term holder of their preferreds. Right now their MNR-C 6.125% preferred is trading right around par value, plus it has over 30 days of accrued dividends. It is callable next September, but still a great way to get 6%+ with in this low interest rate environment.

      1. Kaptain, I’ve owned both Monmouth and UMH preferreds for years and they have treated me well.
        The thing this article gave me that I hadn’t realized b4 is that Mr. Landy Sr. started in the REIT business by investing in debt and equity securities or partnerships and later moved into actually owning and operating properties. This may partially explain why both Monmouth and UMH have had portfolios of REIT securities through the years. I know they have felt that such securities were liquid, held value pretty well and paid good dividends and were thus a good place to park “temporary” funds. Lately though they’ve made some less than stellar picks plus suffered market gyrations like the rest of us.
        Overall, I think the Landys run good businesses and I’m partial to family businesses so I like both companies.

        1. I have been in and out of MNR common and preferred for years. I own a sizeable chunk of MNR/C but had not owned the common for quite some time.

          That changed yesterday when the yield on the common went north of 5% and I said “come to papa”. It will sit in my IRA for quite a while.

        2. Razorback – I have an old reference manual from many years ago and knew they were called Monmouth Capital Corporation as late as 2001. The preferreds have been good holdings for me over the years as well and like the business model currently. The security business was good for the company for many years, until they moved into preferred shares of CBL and WPG. When I try to value the company and assets, I normally place Zero value on their securities. But I agree overall, they run a decent business and the preferred stock is a good way to invest during this low interest rate environment.

    2. Razor, While not a big reit guy, this is why I loaded up on Industrial Reit LXP-C several months ago again as a long term hold with its BBB-/BB+ rating and perpetual busted convertible status when it was still yielding comfortably over 6%. Its almost my biggest holding. I played the REXR industrial preferreds for recent cap gains trade. Would be interested in REXR-C if it would come to papa below $25.
      Its also the reason I recently bought GOODN as it is transitioning into a full blown IR and is exiting Office reit real estate. Its up to 50/50 range now.
      I have owned MNR-C frequently but presently not now, but would again if personal money situation presented itself. I loved owning MNR A and B back in the day..

    3. Thanks for the Monmouth article link. i owned UMH before but got out a because I couldn’t understand them holding so many marketable securities. Now I get it.

  15. Every investor has to make their own decisions on securities they own at the present time. However, in this low interest rate environment it is interesting that people are actually looking at fixed income securities that are paying below 5% . Inflation may not take off now, but I’m just very pleased with all of my REIT preferreds and common stocks now. While I take some risk, there is incredible risk with some of the $25 preferreds that are issuing coupons in the the 4-5% range now. Time will tell, but my long-run strategy in REITs and their preferreds will win over the next couple of years. As of this evening, I’ve very glad to get 6%+ with little downside risk in the REIT area.

    1. agree 100% kaptain lou. the below 5% lower quality preferreds will eventually take a huge price hit. I like the warehouse REIT preferreds (a few separate issues of DLR have done well for me). Some of the commons that took a big hit are coming back strong, too, although avoiding retail malls for the most part.

      1. franklin – as an owner of real estate for almost 30 years, I don’t understand why some of the fixed income investors don’t understand the power of real estate, cash flow and great protection from inflation. The new baby bond by SO at 4.20% is probably the worst I’ve seen. Investors don’t also seem to understand “retail” – but I don’t have the time to educate them. Junky stocks like PEI and SKT are some to avoid, but highly regarded SPG has over 20 billion in debt (yes that is with a B) and that is not an area I would be interested in at the present time.

        1. I share your enthusiasm for some REIT’s. Two you may not be aware of relate to farm land. Farmland Partners has a 6 percent participating preferred at 24.6. The liquidation value of the preferred increases with farmland values. The liquidation value is up to 25.80. I expect the issue to be called next September because some sweeteners kick in then.

          As opposed to small grain land at Farmland partners Gladstone Land invests in fruit, nuts and veggie land, mainly in FL and CA. The yield to call make this preferred unattractive.

          Right now, neither common is very attractive.

        2. I pursue a multi-pronged strategy and REIT and their preferreds play a signifigant role. I am going to need income generation so they are important and of course i need quality. MPW is one that has been very successful for me — yes, health care REIT screams Noooooooo but this particular one is very well run, holdings in U.S. and abroad and a high quality portfolio. Stock yields about 6.3% right now (price around $16 dropped 2 points this week), has price upside, dropped to 12 earlier this year simply because it was caught in the market’s general pullback. I add to this position every time it pulls back.

    2. kaptain lou, guess I fall into that group as a reit investor have PSA prefs, STOR, WP CAREY, WY commons. whats your take on STAG common? preferred to rich. seems like a small market “PLD” with a better dividend.
      “anybody else please chime in”. thanks, Mike

      1. Mike, I like STAG as a company and they have strong fundamentals, but at least for me I would not be a buyer at the current level and would wait for a pullback in price. Expect their preferred to be called next March and replaced with a lower coupon. I’ll be a buyer of that security if it is around the 6% area.

        1. kaptain , thanks for your input, I’ll go back into the “patient mode” and keep looking, pickings are sure slim. thanks mike

        2. Lou, Im gonna go out on a limb and say odds favor a call and no reissue. The trend of Industrial Reits that are maturing is the shed themselves of this cap structure. That is why its hard for me to shed my big LXP-C position despite sitting on good cap gains and oversized position, There just isnt a lot of IR preferred opportunities besides it, REXR, MNR, and weakling PLYM.
          I do own a slug GOODN which I bought only a couple weeks ago on a sudden mysterious drop to $24 area. It is trying to shed their office reits and become
          an IR eventually. They have got it to largely 50/50 now.

    3. Kaptain, I totally agree. Powell says he will keep rates this low for another three years. I’m stuck with one FtF that is so far under par I’ll probably just let it ride and take the hit on yield when it floats. The rest of mine are in fixed and am happy with a 6-8% yield.
      Unless we start getting inflation, which seems unlikely with employment being so low, I don’t understand why anyone would be going into any floating yield.

    4. I agree Kaptain I have always maintained a decent percentage of my portfolio in dividend paying common stocks and reits.

      And in my one retirement account I have not rolled over from TIAA CREF, I purposely left the funds there because I have a big allocation to a special real estate fund in which TIAA directly owns the real estate. It is a nice way to add diversification

      1. dlcnws and Maverick – low interest rates could actually be very helpful to some of the REITs if they are able to refinance some debt at lower rates. The new baby bonds being issued in the 4.25% range for 40 years are going to be a portfolio killer for many people – especially after taxes and inflation. Most of my portfolio is in REIT preferreds but I’m now looking at more REIT common stocks. Interesting that a number of them are down 30-40% for the year, but the true value of their properties has clearly not dropped by this much – with the exception of the mall (clothing) and hotel REITs.

  16. Just for the few group of REIT investors here, this article is the complete reason I avoid the Mall and Hotel sector now and have pretty much done so over the past 20 years. Actually, Sunstone is probably one of the best in the hotel business, but apparently a hotel bought about 15 years ago (if the info is correct) is now being shut down. Quite a loss of capital for the company, and they are probably the best that it gets in the hotel sector.

    https://seekingalpha.com/news/3611527-sunstone-to-shut-hilton-times-square-permanently-in-october

    1. Lou, Why werent you a good online citizen and send personal warnings to Pendragon and Rida Moron ? Do you know how much money you would have saved them if you had prevented them from buying in these trashy sectors?

    2. Kaptain,
      In my area they had been building motels like crazy. 2 near a local casino and one near a major freeway off ramp in another town about 5 miles apart. The La Quinta Inn by Wyndham they continued to finish construction on. Every motel and Hotel in 150 miles of the bay area was full a week ago providing a boost to income but this was only temporary and now we shall see how it goes with the 3 day holiday in wine country.
      Most towns have closed at least one street in their downtown area to allow for restaurants to do outdoor dining on the blocked off street. I don’t see many diners, but kind of nice really and I wouldn’t be surprised if it became permanent kind of like they do in European countries.
      When things get better, the hordes will be back.
      Finally had blue sky yesterday. Being told even with the fire, people trying to escape the city. Single family home sales up 36% in July compared to last year.
      https://www.pressdemocrat.com/article/business/bay-area-residents-flock-to-sonoma-county-inflating-local-real-estate-mark/

    3. Thanks Lou. I’m in Reits almost exclusively, but would never touch the malls and hotels. Amazing the amount of hawking of malls that has gone on on SA. About the only guy I follow there is Colorado.

      1. dlcnws, I have most of my portfolio in the REIT sector as well (mostly preferreds but a few common stocks now), but the malls and hotel sector are just not investable now – or maybe ever. Also, when I talk about the Mall sector, I’m actually referring to the REITs that have primary tenants that are clothing retailers – so SKT and SPG (with a heavy, heavy debt loan) would never be an option for me.

      1. Grid, I saw that piece of garbage article today but was too busy to respond because I was putting together a TV stand for my parents (I’m a better CPA than a furniture assembly person). Oh, and today he mentioned again that he was underweight on malls the past 4 years, but many of his articles in the past two years revolved around SKT and SPG. Of course, then he makes up a bullshit portfolio back in March called “Cash is King” when the market was at an all time low and claims how much it has jumped. Just more nonsense.

        1. Lou, Some commenter was busting his chops on the price dropping and being a big loser. Brads disingenious response was like.. “So I was supposed to know a Black Swan event was going to happen”..
          So I couldnt let that non answer go without pushback. So I replied, the stock has dropped almost 70% from over $40 in July of 2016 steadily down to $14 by end of December..Before Covid.. What was the 3.5 year Black Swan event?
          His reply? I dont respond to trolls…He loves answering questions with no answer, ha.

          1. Grid – he always gives an excuse for the poor performance of his portfolio picks, but the bottom line is that investors have lost a lot of money if they have followed his advice. And yes, anyone that disagrees with him is a “troll” even if they are asking honest and sincere questions about his past articles and their investment returns. In the next 10 years, there will be another Black Swan event (like 9/11 or the 08-09 financial crisis), so investors just need to pick solid investments and not focus on clothing retailers. In 2019, he had 11 articles about SKT and in 2018 he had 12 articles on the company – but now is telling investors he has been underweight malls for the past 4 years. LOL.

    1. Brookfield are the masters of distressed debt. Watch them buy back a portion of their mall debt for .5-.10c on the dollar.

      Refinance once the smoke clears at .98c and pocket the spread.

      Easy money.

      1. Very true. Much of the wealth that BAM has built over the last 4 decades came from buying great assets at distressed prices. Originally, it all came from the minds of Edger and Peter Bronfman, after they got kicked out of the family liquor business and formed the company that BAM would become.

        Wish I had hitched myself to their wagon much earlier.

  17. Wow, UBP H + K both went bananas at the close, up near and over par. Just small trade flukes? I don’t see any news.

    1. No shocker there. Good to be in industrial and bad to be in retail. Among retail reits I would think rent collections range from quite good to terrible. The CBL bankruptcy could be seen from miles away.

  18. iStar Inc – anyone here done a deep dive on the company and the sustainability of the business model?

    1. New issue IStar bond due 2026 priced at 5.50% to refund 5.25% due 9/15/2022 @ 101.313. I own the 5.25% and had bot half of what I own @ 89.42 in April to yield 10.37% YTM approx. Unbelievable…. Though I’ve followed IStar for years, I wouldn’t say I have “deep dived” it recently. What I know is they have been calling bonds in advance for a few years, have a deep cache of unencumbered assets to support debt if need be and have a history have having done so back in ’08-’09 era. Their stake in SAFE I believe is worth more than STAR’s total market cap if I remember correctly. Preferreds traded all the way down to the 3 area back in ’08-’09 and they never missed a payment…. STAR-D was left outstanding for some reason in Oct ’17 when they called STAR-F 7.80’s and and STAR-E 7.875%. New bond looks cheap and if I had access, I’d replace my called bonds with the new ones, but I guess I’ll have to wait to show up in secondary.. All that being said, STAR does have a big stake in the hospitality area among other caveats but has had a few upgrades from rating agencies in the past few years.

      1. Thanks TWR. The upgrades in rating had been noted and as they happen so infrequently I thought he company worth a look.

  19. The new issue by PSA with a coupon rate of 4.125% looks like one of the worst investment vehicles I have ever seen. It pays about $1.03 per year on a $25 coupon. Let’s say that interest rates rise and preferred investors are looking for higher rates. Even at $20 per share, the issue is only going to yield about 5.15%. Let’s go even further now if inflation rises and investors are looking for 6%. It would take a price of about $17 to even get a yield of 6.05% on this security. At least for now, I would rather stay in cash than get a paltry yield like this.

  20. https://www.reit.com/news/articles/prologis-ceo-expects-shift-away-lean-supply-chain-strategy-post-covid

    In the past I have owned some ProLogis preferred issues and been very satisfied with them. This article posted today on NAREIT provides insight
    into the thinking of the current ProLogis CEO re some changes that COVID 19
    may contribute to in the industrial REIT sector. BTW I think currently there may be one convertible REIT outstanding from this firm. I don’t do convertibles.

    1. Arbor Realty Trust (NYSE:ABR): Q2 Non-GAAP EPS of $0.46; GAAP EPS of $0.40.
      Net interest income of $41.78M (+23.3% Y/Y)
      Shares +4.4% PM.
      Press Release

    2. Exantas Capital Corp. Announces Acquisition of Management Contract from C-III Capital Partners by ACRES Capital Corp. and $375 Million Financing from MassMutual and Oaktree Capital Management
      NEW YORK, Aug. 3, 2020 /PRNewswire/ — Exantas Capital Corp. (NYSE: XAN) (the “Company” or “Exantas”) announced today that ACRES Capital Corp. through its subsidiary, ACRES Capital, LLC (collectively, “ACRES”), has acquired the Company’s Management Agreement from an affiliate of C-III Capital Partners (“C-III”). In addition, the Company has entered into separate definitive agreements with Massachusetts Mutual Life Insurance Company (“MassMutual”) and a fund managed by Oaktree Capital Management, L.P. (“Oaktree”) for new capital commitments aggregating up to $375 million. The Company expects the new financing to provide ample liquidity to meet current financing requirements, and for new investments. As a result of the transaction, Exantas’s new manager, ACRES, has assumed management responsibility effective immediately and will begin to implement the Company’s business plan to preserve and grow book value and earnings.

      “Exantas has assembled a high quality portfolio and strong market position that we intend to continue to grow into a market leader in commercial real estate lending,” said Andrew Fentress, Co-Founder of ACRES and newly appointed Chairman of the Board of Exantas. “The financings provided by MassMutual and Oaktree are a testament to the strength and quality of Exantas’s business and portfolio and we expect the financings will allow us to navigate the evolving market and execute on our objective to deliver long-term value to shareholders. We look forward to discussing our plans on the second quarter earnings call.”

      ACRES is a dedicated middle market commercial real estate lender led by a management team with extensive public company and mortgage REIT operating experience. ACRES has a robust asset management and origination platform along with a proven ability to source and maintain sponsor relationships, which will benefit Exantas as it restarts its origination efforts.

      The new financing agreements materially increase the liquidity profile of Exantas and are structured with flexible terms that create optionality, allowing the Company to take a proactive approach to asset management to drive value from the existing portfolio as well as opportunistically enhance its balance sheet.

      Transaction Details

      Management Transition

      In connection with the transactions, ACRES and the Company entered into an Amended and Restated Management Agreement. Andrew Fentress and Mark Fogel, Co-Founders of ACRES, will serve as Chairman of the Board, and as President, CEO and Board member, of Exantas, respectively. Andrew Farkas and Jeffrey P. Cohen have resigned from the Board of Directors with immediate effect. ACRES has added 18 professionals from the former C-III team to its staff, including David Bryant, current Chief Financial Officer of Exantas, who will remain with the Company in his current role to maintain operational continuity.

      Senior Secured Financing Facility

      The Company entered into a $250 million seven-year senior secured financing facility with MassMutual that can be utilized to fully repay Exantas’s warehouse and repurchase facilities, thereby reducing the potential for any future margin calls under such facilities. The facility has an advance rate of 55% and an interest rate of 5.75%. Flexible operating terms include a two-year revolving period followed by a five-year term, with no prepayment penalty after year one.

      Unsecured Notes

      The Company entered into agreements with Oaktree and MassMutual to provide a commitment of up to $125 million in the form of seven-year unsecured notes. The unsecured notes have a cash interest rate of 8.75% and a PIK interest rate of 3.25%, totaling an annual interest rate of 12.00%. The Company issued $50 million of unsecured notes to Oaktree and MassMutual at closing and may draw up to an additional $75 million over the next 18 months at Exantas’s option. The unsecured notes provide balance sheet flexibility and enhance Exantas’s liquidity position. In connection with the $50 million unsecured notes issued at closing, Exantas also issued to Oaktree and MassMutual warrants to purchase an aggregate of 1.4 million shares of common stock at an exercise price of $0.01 per share. In connection with the issuance of the remaining $75 million of additional unsecured notes, the Company will issue Oaktree and MassMutual additional warrants to purchase an aggregate of 2.1 million additional shares ratably as commitments are funded.

      JMP Securities served as Exantas’s financial adviser and Morrison & Foerster LLP served as Exantas’s legal advisor. Ledgewood, P.C. served as special counsel to Exantas. Raymond James served as ACRES’ financial adviser and Hunton Andrews Kurth LLP and Cadwalader, Wickersham & Taft LLP, served as ACRES’ legal advisors. Clifford Chance LLP served as C-III Capital Partners’ legal advisor.

      About Exantas Capital Corp.

      Exantas Capital Corp. is a real estate investment trust that is primarily focused on originating, holding and managing commercial real estate mortgage loans and other commercial real estate-related debt investments. The Company is externally managed by ACRES Capital, LLC, a subsidiary of ACRES Capital Corp. For more information, please visit the Company’s website at http://www.exantas.com or contact investor relations at IR@exantas.com or ocouture@acrescap.com.

      About ACRES

      ACRES is a private commercial real estate lender exclusively dedicated to nationwide middle market CRE lending with a focus on multifamily, student housing, hospitality, office and independent senior living in top US markets. As of June 30, 2020, ACRES manages and services $1.1 billion of loans on behalf of over 80 institutional investors from around the world.

      About MassMutual

      MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. MassMutual offers a wide range of financial products and services, including life insurance, disability income insurance, long term care insurance, annuities, retirement plans and other employee benefits. For more information, visit http://www.massmutual.com.

      About Oaktree

      Oaktree is a leader among global investment managers specializing in alternative investments, with $113 billion in assets under management as of March 31, 2020. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 950 employees and offices in 19 cities worldwide. For additional information, please visit Oaktree’s website at Oaktree Capital.

      Forward-Looking Statements

      This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “trend,” “will,” “continue,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “look forward” or other similar words or terms. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. Factors that can affect future results are discussed in the documents filed by the Company from time to time with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statement to reflect new or changing information or events after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

      SOURCE Exantas Capital Corp.

    1. Razorback, thanks for sharing this link to the NAREIT collection report. Very helpful information. The industrial and apartment sector are doing very well right now, which certainly explains why the preferreds of almost all industrial REITs are now trading at par, or above. I own preferred shares in the industrial REITs of REXR, PSB, MNR and GOOD. I’d like to own preferred shares in STAG as well, but their preferred will likely be called next year and today it is trading around $26.10.

      1. Lou, Roll over and make some room for me in the “Industrial Reit” bed. I had earlier bought REXR-B and A, and LXP-C… Im late to the party this go around with MNR-C (owned it many times) but reentered again today at $25.10 effectively buying the dividend coming up. Outside of utilities, this is my biggest sector owned stash wise….

        1. Grid, unfortunately the industrial REIT preferred sector stocks look fully valued now and almost all are trading at par or above. It would have been nice for me to have bought more shares in the lower 20’s, but that opportunity could arrive again in the next year or so.

          1. Yes, that is true, but I take that as a good sign of their quality. I personally have no qualms paying right around par, because I was busy trading other things well below $25 at the time they were lower. Those have raced way above par now, so its relative value I capture now. I realize you are more of a holder long term and look for values that way for holds.

        2. Grid, while LXP does own a number of industrial properties and they appear to be moving more towards this sector, about 17% of their portfolio is classified as Office/Other. I would like their preferred if it got closer in price to $50 per share. However, some of these office properties may be worth keeping, such as their lease for the corporate headquarters of Morgan, Lewis and Bockius in Philadelphia.

          1. Lou, in the past couple years they have rapidly transposed from mostly office reit to presently 85% is what they most recently quoted. The goal is 100%, but they arent giving away the last office buildings at fire sale prices. But it is their planned goal. $50 is irrelevant as its noncallable, but a convertible. So one just has to decide what yield is acceptable for its credit quality.

  21. https://ldrcapitalmgmt.com/wp-content/uploads/2020/07/REIT-Preferreds-in-the-Pandemic-vFINAL.pdf

    I am reposting this on REIT chat hopefully at a different location on that topic. This is a think piece dated 5-31-20 by LDR Capital Management, a company that specializes in REIT Preferred Stocks re money management.
    They periodically post pieces like this to share their thinking and also
    publish a scorecard on their site each month to give an update of the REIT Preferred marketplace.

    1. razorbackea – Just noticed the link you posted and found the summary very helpful and useful. I’ve now added the website by LDR Capital to my favorites list so I can read their brief monthly update. Thanks for posting.

      1. Glad the LDR site was of interest. Personally, I’m a conservative preferred investor investing for – hopefully – long term dependable dividends. Consequently I stick mostly with regulated IG securities from banks, insurance companies, and utilities. However I also like many reit preferreds for the same reason although not as many of them are IG rated. And I also like preferreds from many CEFs for the same reason and they are IG rated typically.
        Lately I have been adding some more REIT preferreds.

  22. Just a quick comment here this evening before I read Barron’s tomorrow morning. I’ve been a long-time investor in REIT preferreds and always have believed there is value in real estate companies. About 60 days ago, I sold off some real estate that I owned, but was not sure where to place the proceeds. Overall, a tough market – but oddly enough properties in my area are now selling very well, which I do not understand considering many people are behind on their mortgage payments.

    While it took a little research, I’m still very positive on a number of REIT preferreds. Clearly, the hotel and mall REITs have problems and certainly don’t want to be in a security like PEI. However, many preferreds look cheap currently. At the present time, over 100 companies are looking to produce a vaccine for the virus. I’m hopeful this will be done, but likely take 9-12 months. For me, I took off a good number of well run REIT preferreds at $20 per share. I always look for low debt, quality management teams and 20 years of a track record before buying shares. Many investors may not want to take this risk, but at 8% when buying some of the REIT preferreds at $20, with appreciation of close to 20% in the next couple of years, it is worth the risk. – well at least for me.

    1. Thanks Kaptain, for the post on BT. I think it a symbiotic relationship between him and SA. I remember him posting SA was restricting him and him thanking everyone for support , probably meant financial. Now he is back to posting volumes.
      Seeing you reminds me I need to check on family there.

        1. alpha8 – I posted that link on SA about two months ago and now my posts are under “moderation” there. He’s in the bottom 3% of all bloggers, and his track record on REITs is like a dynamite truck with the driver smoking a cigar. I have absolutely no idea why anyone would follow his advice on real estate. It’s actually a real tragedy for investors that follow him.

          1. Ha Ha, Lou…Join the club. Im under moderation for over year…Sleepy moderator today as I have gotten away with blasting Moron and Pendy today.

            1. Grid, I’m pissed that you were able to get comments posted when most of mine going into the trash can! Doofus BT posted an article the other day regarding Empire State Realty Trust – and it actually might be a buy at the present time and valuation. However, dumbass BT did fail to mention that he recommended the stock at $15 in 2015. It’s now at $6.52 per share. But hell what is a capital loss of $8 per share between friends? lol

              1. Lou and Alpha, Mine have already started disappearing already. Many get blocked but on rare days they get through then later quietly deleted. Like one I wrote on an exchange between a couple of people and Pendynut. He was rigorously denying they have anything to do with posts getting deleted. Which is a lie because an insider on “The Team” told me that Moron and his cronies look to scrub the negatives.
                I made a comment of “Its funny how honorable people such as Colorado Wealth and Arbitrage Trader never have complaints of posts getting removed while it happens here all the time…Well it got deleted too, ha.
                Alpha that is funny that the slimeball Pendy was doing that to you and you busted him.

          2. kap, that “moderation” you and grid have is of course a badge of honor.

            I do not know how the heck I got away with it as I’ve had probably 30 comments deleted. The Moronics have this odd aversion to being eviserated by facts.

            Some time ago Pendy started stalking me via PMs with an alias. Must have hit a nerve. He’s really quite dense as I was able to completely flush him out in only 2 PMs after which he slithered away and the alias never reappeared on their postings. I don’t waste my time with them anymore, mostly. lol.

    2. Kaptain Lou

      Like you, I’m a fan of REITs. A recent article on REITs suspending their dividends by Hoya on SA got my attention. I’m now moving current investments from smaller REIT shares that I like (JCAP and CIO) to their preferred shares. I was pleasantly surprised about the value (yield and hopeful capital appreciation) in the preferred shares.

      After doing the DD on those preferreds, I’ve also targeted MNR-C and AMH-G at slightly lower prices.

      1. Greg, while the past few months have been tough for REITs, generally there is a lot of underlying value there if the companies don’t have too much debt. Over the past few months, a number of REIT common stocks have cut their dividends, but not the preferred (not including the hotel sector). It was nice to pick some up in the $20 range, but there are still some decent values out there at the present time.

        I like and have owned MNR preferred stock for many years due to their large exposure to investment grade tenants and FedEx. AMH has a good business model, reasonable leverage and while I don’t own their shares, I would buy AMH-G on a dip as well.

    3. Kaptain, I’ve been getting into MReit preferreds over the last several months and obviously most of them are in the red. I’ve stuck to mostly agency invested issues, so not too concerned these will go under. I take it you’re not a big fan of Mreits. Am I missing something here? Although covid-19 has put pressure on the economy, I think we’ll work through it.

      1. dlcnws, there is a big difference between the MReits and the regular equity REITs and at least for me I’ve decided to stay away from the MReits. Most of the MReits use very high leverage and their financial statements are hard for me to understand. However, this is just my personal preference and some investors may do well with these securities.

        1. https://ldrcapitalmgmt.com/wp-content/uploads/2020/07/REIT-Preferreds-in-the-Pandemic-vFINAL.pdf

          Kaptain,
          I’m posting this REIT analysis from LDR here. I’m not sure when it was posted on their website, but the report is dated 5-31-20. LDR specializes exclusively
          in REIT preferreds as a money manager. They post a score sheet offering a 30,000 foot overview of such preferreds each month and periodically post think pieces outlining their thinking. You may or may not have checked them out before. I usually look at their site once a month or so.

  23. Tim I took the time to look up on SA the article mentioned by Kaptain. I didn’t find it listed under CXW as a current article so looked up BT and his articles. I admit I skipped reading and went right to comments. Grid was there with a cryptic comment and Richjoy pointed out how many articles BT has written this month already as it takes enticing 2 people to leap over the paywall to replace the ones leaving. BT did respond and also dropped some hints about the possible future. He says less free articles, meaning himself and maybe SA or both. He also mentioned a new book he’s writing and I believe he is working his connections when he said he appeared on TD Ameitrade media along with a Nichole formally of Fox biz.

    1. BT has been saying that for a while no–the question is where does he get subscribers if he slows free articles? Where else can you get free advertising (actually get paid for free advertising)?

      1. CharlesM, the writers on SA make their money from page views and for subscriptions to their investment newsletters, so I really can’t see BT publishing less articles because every article is an advertisement for his paid newsletter. In regards to books his books on REITs, it is doubtful that many copies will be sold because there is just not a lot of demand for specialized material like this. Plus, unless you are John Grisham or another popular author, after printing and other costs I bet he only clears $2 per book – so really not a source of steady income.

        In the next couple of months, it would not surprise me if many investors stop purchasing his pricy newsletter, because they are paying money to lose money in the market based on his recommendations. A website called TipRanks rates writers based on their performance and a link to BT is posted below (SA will not allow me to post rankings). In the past year, he is rated #7,166 out of #7,433 bloggers, putting him in the bottom 4% of advisors.

        https://www.tipranks.com/bloggers/brad-thomas

  24. Today was just another reason I don’t follow any of the stock advice on Seeking Alpha. Here is the timeline for this morning:

    7:00 a.m. EST – Brad Thomas publishes a bullish article on CXW, a prison REIT stock. FYI, I own a few of their bonds that mature in 2022. However, the common stock yields 14% right now and the company is a STRONG Speculative Buy.

    8:13 a.m. EST – I see a notice on SA that the company has suspended the dividend.

    4:00 EST – the stock closes down today by over $2 per share, a drop of about 16%. In a post this afternoon, BT claims he is at the dentist, so please be patient. A poster on the thread mentions he already got “drilled” once today.

    This is why I normally stick with preferreds and baby bonds. Seeking Alpha can be dangerous to your financial health.

    1. kaptain–BT’s famous line is ‘protect capital at all costs’–one more BS line. Kind of like ‘we aren’t going to keep publishing ‘free’ articles on SA’. When you have to keep churning out articles day in and day out you will screw yourself sooner or later.

      1. Tim, part of the problem with SA and some of the writers like BT is they are always pushing stocks and never take a defensive position, even when the country is going through a crisis like the past three months. The SA platform works well in a bull market, but terrible in a bear market. BT is now writing about 9 articles per week, all pushing common stocks when the market is still very volatile.

        My purchases this week consisted of a few shares of preferred stock and then a small purchase of some local school district bonds that have a YTM of 3.60% in 2039. Both are very defensive positions.

    2. This is very true. Also, there is a lot of front running going on as well. A writer buys a preferred. Then he recommends it to subscribers and they buy and drive the price up. Next, a public article is posted and the security pops even higher. Writer takes profits.

      1. Kapil – I have concerns about the front-running on preferred stocks as well, although I cannot prove it. However, I’ve seen a number of preferreds run up by $2 in a day (with no explanation) and then see an article on SA a day or two later recommending the security.

    1. Justin Re; NJ REIT: I find it despicable. The real news in the article was about the local taxpayer and who has on the target tee shirts…now literally.
      I am not sure which ‘floodgate’ to which you refer, a windfall for REITs or an impoverishing of taxpayers? It’s shut up now…go home…and write us checks.
      Labor guarantees Tax Legislation. Which is the Problem?
      ” when the levee breaks, everyone gonna get wet…”

  25. In the too cheap not to buy some category….I’m back into RPT-D at 29.40. I think the company will continue to pay the preferred dividend after suspending the common. The preferred is cumulative.

      1. Retired Broker, today I picked up a few shares as well and think the company will be fine in a couple of months. However, not a full position yet for me either.

  26. For investors that are interested in REITs, it has been a couple of tough months, although I like to generally invest in the preferreds and not the common stocks. Yesterday, the long-term favorite of many Seeking Awful promoters saw that Tanger Outlets (SKT) collected only 12% of their rent in April and they suspended the dividend. I’ve had rental properties for many years, but there is never a month where I collected such a paltry sum of money. So much for “SWAN” investing in REITs. Holders of high quality REIT preferreds such as PSA an PSB have done well over the past few months, although the coupon rates are in the 5% range.

    1. I agree with you Kaptain Lou. I own PSA &PSB preferreds. I would rather own them than SKT. The problem I have with BT. And the Moron group is they have no risk management. They have no problem watching a stock go from 100 to zero as long as they are receiving dividends. What about total return. Neither group likes to admit when they are wrong.

      1. TimH, I don’t think it’d be a stretch to opine the Moron group is much more focused on 1 cent per click than on their investor’s $100 going to $0. Then they will delete any comment that attempts to spotlight the lunacy of their recommendations or their performance. The award for single dumbest entry on SA last year was Pendy posting his portfolio which laid him defenseless.

        1. Lol. Alpha8 I did not see that. No wonder Grid has been ripping Him relentlessly. The sad thing is those guys are making money while their subscribers are losing money on their picks. ATB

          1. So true TimH. Maybe a stretch, but at some level seems the SEC should be involved – not for bad advise, but for controlling the comment narrative and walling-off critical comments that could better educate their readers. We know it’s morally and ethically indefensible, though how much more egregious is for some one else to decide.

            1. Alpha, They delete or block 80% of mine. Of course I get snide…Like their SPG reco today. It may or may not be a good call now, but we are past that point. This is after they recommended CBL, PEI, and WPG and got killed absolutely killed on them. So they go back to the well without mentioning how horrible they are in this segment. I posted… This reco is like Lucy telling Charlie Brown to come back and try to kick the football again….. It didnt get through the screener, ha.

                1. Sfinley, If Moron would fire his staff (none of its his fault as he is too lazy to do any cut and paste research) and buy some blindfolded monkeys it would be win win for everyone… He would save on overhead as they would work literally for bananas, and the subscribers would benefit from an actual researched method that has led to consistent above market returns. 🙂

                  1. Grid, I left a comment yesterday on a SKT article from late January (I had also commented on the article in the past) when BT gave a Strong Buy rating to SKT around $14 per share. Perhaps he should have called it a “Strong Bye” instead. I was polite, but was referred to as a Troll. These SA authors sure do not like to be held accountable for their prior recommendations!!!

                    1. kaptain, he should not have minded that post…As he had non stop recommended it since it was $28 range…Way above $14. You were being very generous. 🙂

      2. TimH, as a large investor in preferred REIT stocks, I agree with you and put my elderly parents into PSA and PSB preferreds. Both of those posters don’t like to admit losses – even when they clearly made a mistake. For the past 10 years, I’ve sent a check for $100 to QuantumOnline for their great work. Easy to screen REIT and other preferreds there by credit quality and they have a great website.

      3. Speaking of BT – seems he is getting into pushing preferreds now. I got an email advertising his new service, lol. Anything the hucksters like him and the Moron group can do to make a buck, they will

        1. Maverick – yes that team is now advertising preferred stocks now. However, most informed investors can get much of that information for free if they are willing to do a little research: Tim’s website here lists almost all of them and QuantumOnline.com has great screening tools as well.

          1. Agreed Kaptain – I wouldn’t advocate taking advice from BT and his group on preferreds. Just found it funny how they now have moved into that arena and will sell their services as experts – lol

        2. Maverick, They never simply tire of losing people money. They cant try any harder and do a better job than they presently are in separating one from their capital. Their latest mall reit pick of SPG from yesterday is already down 12% since yesterday. I got total faith in them that this one may almost do as good as their WPG, CBL, and PEI fiascos have been. They just cant stay out of the trash pile and not come out smelling like a skunk yet again.

    2. In fairness (and not defending the SA writers) you are not telling the whole story on SKT. They offered every tenant the opportunity to defer rent til 2021 so naturally most took advantage of that. That is a lot different than having 88% of their tenants decide on their own not to pay which is what you implied. Obviously hurts them in the short term but may be a smart move in the long term

      Given Tanger’s offer, whatever % they collect in April and May is meaningless. They basically told their tenants feel free to delay those two months of payments

      Tanger Factory Outlet Centers’ (NYSE:SKT) April rent receipts represented ~12% of the amount billed after offering all tenants in its portfolio the option to defer 100% of April and May rents interest free. The deferred rent will be payable in equal installments due in January and February of 2021.

      1. Maverick – you are correct in stating that SKT offered tenants the opportunity to defer rent until 2021. Thanks for the clarification and I should have mentioned this in my comments section.

        Unfortunately for SKT, and I could be wrong here, depending on how bad the current situation lasts, it is doubtful that some of the weaker tenants will be able to pay this amount in early 2021. The credit ratings for some of their Top 20 tenants are very poor. Their #1 tenant is Gap, who refused to pay rents in April to lessors. The #2 tenant is ASNA (they used to be #1 before they shut down their DressBarn division), and I would be surprised if they don’t file for bankruptcy before the end of the year.

        1. Yes, SKT has some weaker tenants that may not survive. As I am sure many other reits do as well. I just wanted to point out that you can’t take the 12% figure at face value and use it to draw any conclusions, for SKT or extrapolate to any other reit. The figure for them that will matter will be June and July when they are past their two month offer to tenants to defer rent interest free til 2021.

          I am not really making any judgement on SKT as an investment going forward (although I do at least plan to start watching them and a few others now as picking up badly beaten down REITs like this in the 08-09 crash paid off handsomely ).

  27. Those below: Thanks for the comments on my request re: BRG , highly leveraged and management close handed.
    I have continued to hold UMH, UBP and CDR thru this as the “4Sh’s” Essentials to living anywhere., “Sht, Shower, Shop, Schleep”.

  28. Anyone more familiar with BRG prefs? There are three.
    I am particularly intrigued with the C’s, they look way below par, yielding well and puttable in three years, with yield bumps.
    There is a lot of jolly info out there and looking for any special knowledge?
    Thanks in advance. JA

    1. Joel – I’ve been meaning to update myself on BRG prefs too but have yet to do so….. Right now, I’d think A looks more attractive than C as it, too has the same provisions but higher coupon and earlier put possibility. BRG seems to be in a relatively reasonable corner of the reit world I suppose but who knows…I’ve not read much from the company recently. Have they put out any updates? BTW, it’s only A and C that have these nice little extras in their structure as I remember, not D, so imho if you have to own BRG prefs either one of these two are the ones to own…..

        1. Joel, I have owned the BRG preferreds in the past but sold them some time ago as the company has pretty high leverage for an apartment REIT. 2WR is correct about the A & C issues being the best to own, as I don’t believe the D shares are puttable and have the “bump-up” option. Perhaps they are worth another look as the A shares are puttable in October 2022 at $25. Just searched the website for the company and don’t see they have released any guidance on rent collections this year- this would have certainly been helpful. UMH just did a press release yesterday on their rent collections (mobile home parks) and collections are slightly lower than previous months, but overall pretty comparable.

          1. That’s why I am searching for info. Looks like they are good news publishers of internal ops and numbers. I think they are have a investors call on May 11th (?) posted that I saw. I’ll post if I find anything substantial, the terms on these look like a target.
            High end units can lose renters and go into arrears pretty quickly.
            I hope they are giving free Internet to all those who have to work from home and keep up a corporate office in residential zoning!

            1. Joel A. – I looked at their SEC filings today and little more and the company is leveraged very high, even for an apartment REIT. I’m a long-term investor in REIT preferreds, but this one is just too risky for me. Debt + the preferreds is almost equal to their total cost on the properties, so very little room for errors. Also, a number of their apartment complexes are located in Texas and not sure how huge drop in oil prices will effect those apartments – especially ones that are rented for $1,300+ per month.

              1. Just as a form of color on apt complex investing in Dallas, I know of a private investment group doing investments similar to BRG that actually closed on a deal just in February…. Here’s their update to investors commentary which seems pretty optimistic. I hope I’m not violating any confidences by sharing this, but there are no names mentioned so I guess this should be OK for generalized color.

                “First and foremost, I sincerely hope that you and your loved ones are both staying safe and if you’re safe then on the other end, sane, during this unprecedented time. Many people receiving this email have invested with us on our syndications, many have not but I wanted to share with you what investing in apartments looks like even right now during a true black swan event. 

                “On our most recent acquisition in Dallas through the first week of the month we collected more rent in April than we did in March. Why is this? First, it comes down to a really specific formula and investment strategy that we believe in. If I told you we go into investments prepping for global pandemics, I’d be lying to you. However, we ALWAYS expect the unexpected and go in flush with cash reserves in the case we need them, we haven’t needed them yet thankfully. 

                “Here are the top 5 things we are doing that have allowed us to collect at a superb rate despite all that is going on. 

                1) Doing the right thing: Being human with the tenants. Checking in with them and seeing how they’re holding up and if there’s anything we can do for them. We want them to know we’re here for them and just have genuine conversations with them. We can find out a lot from these conversations and from an asset management perspective we can find out if we have to work out a payment plan with them. 

                2) Show them where they can get help: If they’ve lost jobs we are directing them where they can apply for unemployment and resources to show what their benefit may look like. Unemployment will pay the majority of workers in the US more than their normal jobs through 7/31/2020. 

                3) Retention, retention, retention: Right now, simply put, very few people are going out looking to move. So our focus has shifted immensely to our current tenants and doing what we can to retain them if their leases are ending. We are renewing them at their current rental rates and not raising rents during this time. Our job has shifted to keeping the property stable during this interim period and then flipping the switch back on to our business plan of renovations and raising rents once the dust settles. We are also calling tenants who gave 4/1, 4/15, 5/1, 5/15 move-out requests to see if they’d like to change their mind and stay now whether it be on a 3/6/12 month lease or month-month basis. We’ve been extremely successful with this and it’s been a big win for all parties. 

                4) Make Paying Rent Easy: Online, credit cards, mailing in checks, etc. Making more options available to them to make paying rent easy while keeping distant. 

                5) Set up virtual showings: We have utilized matterport to set up virtual 3D showings as people can truly do a real walk-through our units without physically being there. We don’t have enough data on this yet to see how successful or not successful it will be but it is another option we’re putting out there to increase our “traffic” through the property.”

                1. Thanks 2WR, always appreciate comments and additional information for investors here. Sounds like this company is doing some right – and compassionate things for people at the present time.

                  Here is part of the press release by UMH today, and always appreciate public companies making statements like this. However, I’m not recommending the security and am just making information available.
                  ______________________________________________

                  Company Release – 4/20/2020 8:00 PM ET
                  FREEHOLD, NJ, April 20, 2020 (GLOBE NEWSWIRE) — UMH Properties, Inc. understands that its investors may have concerns about the Company’s rent collections and operations in light of the COVID-19 pandemic.
                  We are pleased to announce that our April rent collections are not significantly impacted by the crisis. As of April 20, 2020, we have collected approximately 91% of our total April site and home rental charges. This compares to 94% through March 20, 2020, 93% through February 20, 2020 and 92% through January 20, 2020. As the states in which we operate begin to re-open and our residents receive their stimulus checks, we expect that any April shortfall will be collected over the coming weeks and months.
                  UMH’s community operations continue to excel despite these challenging times. As of March 31, 2020, same store occupancy was 84.6%, representing an increase of 100 basis points over year-end 2019.

  29. TWO declared full payment of preferred dividends this quarter, and .05 payment on common stock. Two-B and Two-A are up 20% and 25% post market, in addition to large gins for the day.

    Celebrate or sell? I’ll probably do some of each.

    1. spoke to the IR person at one of the mortgage servicers.
      l. Remember that forbearance is not forgiveness. Point is that if you do not pay stuff now then at the end of six months you will have to unless the government makes further provisos.
      2.The big question is the percent of outstanding loans that forgiveness i.e. now something over 2%. In 2008-9 the number rose to about 10% but we can not be sure now.
      Takeaway for me was that not only do we have to consider mortgage servicing conditions now but then we have the unknown of what will happen in 6 months time. At that point with many people potentially in default they will have to kick the can. But do I want to wait for that to happen or just stay away. that is the question? Still undecideed. sc

    2. Two
      announced that they were not renewing the contract with their external manager. In turn they have to pay a break up fee of 144 million or so. This sounds good but look further and you will find that the ceo of two is the main beneficiary of this deal. He is taking liquidity out for the company when it needs it. Does not look good for the unit holders. Hope some of the larger investors will fight this. I like an internally managed firm as much as the next but not when it is taking a chunk of liquidity out of two when it needs it most. SC

  30. NRZ is paying preferred dividends this quarter. Slashing common dividend by 90%. This is good news though common holders won’t see it that way.

    CIM issued a positive statement saying they are undervalued. sounds good but somewhat meaningless.

    NLY and CIM preferred dividend pay date.
    AGNC preferred ex-div date. Some others too if they haven’t been suspended.

    1. Martin-
      A agree with your read but as a holder both of the preferred and the common, I’m not to up-tight about the reduction in the common for now. I rather see the company have the ability to get through the next three months than get a full payment. We have to see how this pays out. From Ti’m’s mriet table it appears that two of the preferred are up nicely . SC

  31. Bad news from NYMT last night:

    New York Mortgage Trust, Inc. (NYMT) (the “Company”) announced today that due to the turmoil in the financial markets resulting from the global pandemic of the COVID-19 virus, the Company and its subsidiaries (the “Company”) have received margin calls from repurchase agreement financing counterparties over the past week. Through Friday March 20, 2020, the Company timely met all margin calls received. However, due to the continued margin calls received for March 23, 2020, the Company has notified its financing counterparties that it does not expect to fund the existing and anticipated future margin calls under its financing arrangements in the near term.

  32. I don’t know if anybody is making arbitrage trades in this crash besides me. If you plan to hold REIT preferreds through the crash I highly recommend it. Price movement is so wild there’s several REIT’s I traded issues back and forth 2 or 3 times today for 5-10% profit. Nothing to brag about when they’re down 40%. But if they survive then those trades eventually pay off, and for now it offsets some of the loss.

    Today AGNCO topped AGNCN in price, and later dropped below AGNCP (swap O for N then swap P for O). CIM-B and CIM-D flipflopped all day long with me swapping back and forth between them. There’s also NLY action and NRZ action. If you intend to hold then by all means grab some of the free money to help offset your losses.

    1. For everyone, this may explain some things in case you hadn’t already seen it, regarding the slaughter in the mREIT space. Seems to mention AGNC and Two Harbors amongst others in the Dow Jones article

      “One spark for the selloff, according to Keefe, Bruyette & Woods Inc. research, was the announcement by UBS Group AG that it was closing down two exchange-traded notes tied to mortgage REITs. They were shut down because of requirements that they redeem shares once their value falls below a certain threshold, according to UBS.

      Still, “today’s performance appears more overdone,” relative to the small size of the UBS notes, said KBW analyst Melissa Roberts in a research report.

      Executives say the sector is still attractive and stands to rebound once the market turmoil ends. “As the dust settles, we expect this to be an incredibly attractive time for our business model,” said David Finkelstein, chief executive at Annaly, in a call with investors on Monday.”

  33. FYI- for any investors that like the REIT preferred sector, I have an account at Schwab and they allow you to screen REIT preferreds. This weekend I’ll be looking at some selections to see if there are any values out there at the present time. It’s pretty easy to use and the screening criteria has been very helpful to me in the past. There are some decent values out there at the present time, but my schedule is pretty full until April 15th. Perhaps I will write again on SA as time allows after that date.

    1. I look forward to your list but it could be out of date 10 minutes after it’s published. Price movements are too wild. This whipsaw action is drowning out my usual analysis. I’ve been making trades this week but it feels like flying blind.
      There’s plenty of values if the crash has run its course. There’s no values if we have a long way to go.

    2. NRZ
      holding both the common and the preferred. Listened to the CC on Friday and was comforted. That said, would be interested in the views of any others interested in the company. Overall MN seems to be a very bright and productive guy. Shifting to origination was right on. As such while the stock is getting trashed, does not seem to be called for. Am I missing anything? tia SC

      1. I’ve made $4/share trading between NRZ-B and NRZ-C on wild price divergences the last few weeks. Small consolation when the share price fell $8. With patience I hope to eventually turn a nice profit.

  34. RQI has completed its rights offering and shares were distributed at a price of 14.12. Now trading at 14.31 and a 7% discount to NAV, which is about average.

    Although price of RQI dropped after announcement of the rights offering (typical) it has fully recovered since and them some.

    Best CEF in the real estate space to my eye.

  35. Because of the asset coverage requirement and penalty rate, plus the fact that the company seems to be raising plenty of capital, I like BRG.PR.A and BRG.PR.C — possibly more than I should, of course. (BRG.PR.D does not have the penalty rate.)

    I expected that all of BRG.PR.A would be called in October and was surprised to hear management projecting only a partial call for it. From their conference call:

    the Series A Preferred which is at a quarter is coming up for redemption sometime in mid-October. But our guidance currently does not assume that we take it all out in one go. It assumes that we have a rolling redemption

    Then again, maybe management is just being conservative and they will indeed manage to take the whole issue out at one shot.

    1. Thanks for your post, Mike D. I was just going to ask if anyone follows BRG and I had missed that comment in the CC… I, too own BRG-A and C and was thinking as far as most recent price on A, it was sort of falling into no man’s land at its current price, on the high side as far as YTC for October is concerned, but not so compelling that a sell was mandatory.. You’re right though, maybe they’re just being conservative, but still it’s a good sign for now that selling BRG-A and having even more cash to deal with right now doesn’t necessarily have to be top priority…. Their closing of selling B shares and starting a new T series private issue convert with 6.15% coupon does give you pause to think they do easily have the room to plan to call 100% if they wanted to come October.

  36. RQI has a rights offering outstanding. Anyone holding the issue should be aware of the deadlines for opting in or selling their rights.

    I believe Feb 12 is the magic date.

    1. Bob-
      They will determine the price at the end of the day 2-13- applies whether you are using them or selling the rights.
      I took a gander in my Schwab acct as if I was going to exercise them- fee is waived- sweet.
      Price of rights dropped today. If you like the CEF, this looks like it could be a bargain

      1. RQI is 2 bucks off its 52-week high, the discount to NAV is right in the middle of the range, and the offer is to buy at 5% under market.

        The intrinsic value of the option (right) is easy to calculate. 5% of market price divided by 3 (3 rights required to buy 1 share). Intrinsic value is way above market price. Unless I’m missing something.

        Assuming RQI is similarly priced as 2-13 approaches (and NAV discount, too) I will be in.

  37. Not sure if many investors here have funds with the U-Haul Investors Club, but tonight they posted some new offerings. As I’m only 50 years old and have plenty of time, I like to invest in some of the longer term issues as I hope to consider them as kind of an “annuity” with no fees. Tonight they posted a new 6% issue on a property in NH with a 20 year term and I placed some of my remaining funds in the issue. Please note that funds invested are for the term of the note and 20 years is a long time for many investors – so this may not be the right investment for many people. However, it is a good choice for me as there are not many fixed income opportunities out there at the present time.

    1. KL: I saw that 20 year note posted today. I am 66 so I have been sticking with the 2 and 5 year notes. I have to have a sense of reality when it comes to longevity! I like the diversity of having some funds outside of banks and brokerages. I also like the fact that the payments on the notes are amortized over the life of the note so there is return of principal beginning with the first payment.

      1. Gary – when I get closer to your age, I’ll probably stick with the 2 and 5 year notes as well! Overall, I like the stability of the account values and like you – it is nice to have some funds outside of stocks and bonds. The fact that the notes amortize is also an added bonus.

    2. kaptain–I was disappointed that they dropped the short end (2 year)–but of course they aren’t going to pay more than they have too. Being quite a bit older than you I was happy with 3% on the 2 year–but now down to 2.5%. I have waded out to the 5 and 8 year issues more and more.

      1. Tim, when I first started with UIC back in 2016, the interest rates were better and they always had a real estate listing available – but times have changed with interest rates. The 2 year note at 3% was very attractive. Clearly their finance guy is looking at the interest rates and they lowered them due to current market conditions.

  38. Tim’s post on Gladstone Land has spurred me to ask more about it here. It is on the list for my parent’s Real Asset allocation but I’ve never pulled the trigger. Conceptually, I like the idea, I just haven’t been convinced enough to buy it. I’ve listened to podcasts of the mgmt team talking about it and it’s appealing, just can’t get comfortable enough for a 1% position. Any thoughts?

    1. While I’m not a big follower of Gladstone Land, I like the overall company and think they are well managed. Not many values out there at the present time, but put my parents into some MNR-C today at about 25.08. Close to a 6% coupon and they have long-term leases with Fed-Ex.

    2. I like the management and strategy of LAND and have owned the preferred for a while. Might buy a tiny position of the common to help me keep an eye on it. Because it is so small if got crushed in the Dec sell off so next sell off might offer great buying opportunity.

    3. Also…I think the other long term play they are making with LAND is in controlling water rights especially in the Western States.

  39. Looking to add to my existing reits dlr, lamr. Not much history on “cold” to evaluate. Any other industrial reit favourites?

    1. I have owned STAG for 3 years. Solid company, good growth and like the monthly dividends. Plan to continue to hold

      I recently started a small position in PLYM – much smaller industrial reit, much higher dividend. A little more risky than STAG but the potential reward is better

  40. I posted this in the Reader Initiated Alerts page, but there are daily posts under that heading. This morning, American Finance Trust (AFIN) reopened their 7.50% preferred issue AFINP and it appears they are going to use the proceeds to purchase more properties. While I would not buy the common stock due to fears of a dividend cut, I like and own a fair number of the preferreds and bought more this morning on the price dip. It’s not callable until March 2024.

    While there is probably some risk with the company, yesterday I noticed that DE was able to sell a 30 year bond with a rate slightly below 3%, so I’m fine with holdings in this medium-risk REIT.

    1. Thanks Kap. Their financials are concerning for sure and I share your issue re: the high dividend on the common. Good alert – thanks!

      1. Thanks Tim. I was really shocked yesterday when John Deere was able to get 30 year financing at about 2.9%, so I’m willing to take some risk as long as there are 30-40 holdings in my portfolio.

        1. kaptain–I noticed this morning when reviewing filings that corporations are all of a sudden piling into debt at ridiculously low rates. We are all going to have to lift our risky holding to earn any sort of a income flow.

          1. Tim, Particularly insidious here is that yields are lower, though overall enterprise risk remains the same in most cases.

            And the debt load as you point out keeps growing. If we combine this with an episode that results in yield spreads expanding…

  41. nareit is a good website to visit for investors interested in reits.
    I also own quite a few reits and been looking to invest in apartment reits
    but i believe they’re currently overvalued.

  42. My experience with Real Estate has been on the private side (private REITs, or LPs) given my day job. I’m strongly considering investing in two mortgage REITS (NLY & DX) that have been crushed by the flattening yield curve. I anticipate that the yield curve will steepen over the next 12-18 months and these two should be good ways to express that view.

    On my watch list are the three Brookfield partnerships (BPY/R, BEP, BIP). While the latter two aren’t REITS, they are income focused real asset plays. I’ve met the Brookfield real estate team and have allocated capital to the real estate LPs that are inside BPY/R. I missed my window at the end of 18 to make the investment in these three. I have a bit of concern about the former GGP properties given the retail apocalypse, and leverage, which is what has held me back from BPY/R. I’ve established prices for all three now so that I don’t miss them during the next downdraft.

    1. Mrinprophet

      I’ve owned BIP and BEP for a long time and have been very pleased with the performance. At this time, I think BEP is the better bet between the two.

      The higher debt level keeps many on the sidelines and sets a market price with a very nice sustainable yield. Many don’t take a moment to see that the debt is project specific and non-recourse. I like their wind power acquisitions and have noticed that the hydro power divisions have been very profitable in drought years.

      1. Thanks Greg… I’m just hoping we get a wash out and I can pick some up at my target levels (BEP<30, BIP<40). Agreed…BEP is what I'm most interested in. Do you have them in taxable or qualified accounts? I read that they don't generate UBTI, thus would be really nice in qualified accounts. Any chance you can confirm?

        1. Mrin

          I have them in taxable accounts and can’t speak to the UBTI. The pay-outs are QDI and return of capital and it works well with the taxable account.

          Looking at a 180 day chart of BEP, a target of $31.40 might be appropriate. Brookfield does a lot of unit purchase below $30 per share.

  43. I have held a large number of REITS in my portfolio – they are my second biggest sector after preferreds. Just to generate some discussion since this is a new area on Tim’s board, here is my list of REIT holdings. Now note, I have held many of these for some time and I am not suggesting they are buys at this time. In fact, I may need to lighten some. But it is important to note, I typically invest in these long term for income and thus do not try to time the market (which is why I haven’t lightened up on some to date but is also why some have grown to as big a position as they are). I am currently sitting on two losers, SKT which you will find wildly varied opinions on and TCO. I have held SKT for a while at an average cost of around $22 a share so it is my biggest loser. That said, I don’t fully buy into the bear case on SKT but at the same time, I am not adding to it and may bail if it drops much further. I have sat on losers before that turned into nice turnaround plays so we will have to see. TCO is the other loser and the one REIT I have held the shortest period of time, under a year and I have been second guessing myself some on this one (even though it is my smallest REIT position).

    I look for a lot of diversity so you can see my REITS spread out over various sectors. Here is my list in order of my largest to smallest REIT position

    Symbol Description
    WPC WP CAREY INC COM Diversified
    O REALTY INCOME CORP (MARYLAND) Retail
    VTR VENTAS INC Healthcare
    DLR DIGITAL RLTY TR INC COM Data Centers
    MPW MEDICAL PPTYS TR INC Healthcare
    HASI HANNON ARMSTRONG SUSTAINABLE INFL COM Infrastructure
    UHT UNIVERSAL HEALTH RLTY INCM TR SH BEN INT Healthcare
    IRM IRON MOUNTAIN INC COM Specialty
    IRT INDEPENDENCE REALTY TRUST INC COM USD0.01 Residential
    BPR BROOKFIELD PROPERTY REIT INC CL A Diversified
    KIM KIMCO REALTY CORP COM USD0.01 Retail
    LADR LADDER CAP CORP CL A Mortgage
    MNR MONMOUTH REAL ESTATE INVT CORP CL A Industrial
    BDN BRANDYWINE RLTY TR SBI NEW Office
    STAG STAG INDL INC COM Industrial
    BXMT BLACKSTONE MORTGAGE TRUST INC COM Mortgage
    STOR STORE CAP CORP COM Retail
    CONE CYRUSONE INC COM USD0.01 Data Center
    BRX BRIXMOR PPTY GROUP INC COM Retail
    SKT TANGER FACTORY OUTLET CTRS INC Retail – Outlets
    COR CORESITE REALTY CORP COM Data Center
    LTC LTC PPTYS INC Healthcare
    NRZ NEW RESIDENTIAL INVT CORP COM NPV Mortgage
    JCAP JERNIGAN CAP INC COM Mortgage
    TCO TAUBMAN CENTERS INC Retail – Mall

    Sorry if that formatting gets messed up – I tried to cut and paste from my spreadsheet.

    For those of you who also may be investing in REITS, I would be curious to know what your list looks like

    1. Maverick,
      that is an excellent portfolio! Have owned a number of those.
      Currently:
      CIM: Chimera Investment Corp
      LADR:Ladder Capital Corp
      AGNCM: AGNC Invesmtne Corp
      NRZ: New Residential Crop
      NRZB: NRZ Preferred
      STWD:Starwood Property Trust
      TRTX: TPG RE Fin Tr
      CIMPC: Chimera Preferred
      TWO: Two Harbors

    2. my REIT list is as follows; CDPYF ( a Canadian apartment REIT takes 15% of the distribution in a taxable account), ARI, NLY, O, NRZ, JPS (a fund for those of us tired of trying to screen REITs)

    3. Maverik, thanks for that list.
      I also use REITs along with preferred (and dividend stocks) to generate my yield, i tend to concentrate my REIT holding as opposed to spreading out my preferreds.
      Most of my REIT list:
      WPC
      MPW (one of my favorites)
      WELL
      EPR
      NNN
      KIM
      Prices have run up on a lot of these since i bought and prices have run up on others that i wanted to buy and still hope to. I also think VNO is worth another look at now and O and VTR are on my “must own* list.

      1. Thanks all. So posting that prompted me today to do some analysis and trimming .

        I lightened up on WPC which was my largest position because it has been on a big run as of late and I fear it is due for a pullback. I usually don’t play that game for the most part with long term income holdings, but it became quite oversized so took some off the table

        I also lightened up on UHT for the same reason

        And I decided to sell out of IRT completely.

        No new buys – I am looking at some but probably not the best time to be adding new REIT positions. But I would like to add another residential apartment REIT to replace IRT if I can find one that makes sense

        1. Any business/performance concerns with WPC specifically or you’re just taking some chips off the table? I’m up >30% on my position.

        2. Maverick, if you’re looking for a residential REIT, try my Canadian apartment CDPYF. If it’s in an IRA, I believe you will avoid the 15% surcharge on dividends.

          1. Thanks – i will take a look at it in more detail. Just curious why you like it. At a quick glance, it yields 2.6% which is low for most reits. Thanks

            1. Maverick, CDPYF is a long term holding in a taxable account with a large capital gain. I’m reluctant to sell because of the capital gain taxes and hadn’t realized how much the capital appreciation had eroded the current yield. I have the same situation with O. I only thought of CDPYF because you mentioned an apartment REIT. Probably not the best fit.

              1. Vinny – ok, thanks I appreciate it and can relate to the same situation with some other holdings

    4. Hi Mav, is any portion of HASI’s distribution characterized as return of capital? Incorrectly, I tend to think of HASI as a Yieldco, such as NEP and PEGI, that tend to pay return-of-capital distributions.

      1. I see Justin answered that for you. Thanks Justin

        Honestly for me, it doesn’t matter since it is in my IRA

    5. APLE
      STWD
      INN/PRE
      These are all I have in the REIT sector. I have been considering MNR/PRC and HT/PRE , do you think these two would be a addition to what I have ? Thanks

  44. What are your feelings overall about the Taubman Preferred Issues TCO-J and TCO-K. Thanks for the insights.

  45. Also just wanted to post another quick note this evening. For some of those of you that read on Seeking Alpha, I’m strongly avoiding a REIT called Tanger Outlets (SKT). Just my opinion, but I basically consider them a Class B or C outlet mall center as ALL of their tenants are clothing retailers. If occupancy levels drop – how in the world are they ever going to re-purpose those properties? Below is a link to their most recent quarterly supplement. Please take notice to their #1 tenant – ASNA (Ascena Retail) who currently is 6.5% of their base rent. ASNA common stock trades at under .50 cents per share and the top 25 tenants are located on page 9 of the supplement.

    http://investors.tangeroutlet.com/Cache/1500122398.PDF?O=PDF&T=&Y=&D=&FID=1500122398&iid=103061

    1. Lou, I responded to one of your posts but it never saw the light of day. Do me a favor please…If I do like Brad and recommend something daily that goes from $30 to $14 over 3 years and never concede the point (or ever admit the $30 reco price again) I may have made a mistake….Please publicly humiliate me.

      1. Grid – Seeking Amateurs website with $30 articles is clearly a place I would not take investment advice and I’m sure that many comments have been deleted to promote the “chosen ones” but I will kick your butt if needed. LOL.

        Bad Timing (BT) is just another poor writer that promotes stocks just for the fees and writes for $30 per article.

    2. As I noted in another post, I do own SKT and it is one of the 2 REIT losers in my portfolio. But I don’t fully subscribe to the bear case. Yes, retail is way out of favor, fear of Amazon, etc. But as to re-purposing their stores, a couple things to note:

      1. Most of the stores in each outlet are small – so easier to re purpose than malls with big department stores that leave
      2. Most of their outlets are located more as destinations – many near vacation destinations – rather than core stores in big cities – so they offer a unique experience different from malls
      3. Their management team has been in place and successful for some time – they were one of the few who did not reduce or suspend their dividends in 08-09 when the shit hit the fan.

      Now I am not saying run out and buy SKT – I am not adding to it. But I also think the bear case is overblown at this stage. So if you have a long term perspective, it could be a speculative buy. But since most people on this board are more conservative and income focused, SKT probably isn’t the best fit for many

  46. After a long search for income, today I started a very small position in KRG and will continue to watch the REIT over the next couple of months and add on prices dips especially if there is some tax loss selling like we saw last December. Any REITs related to “retail” are having a bad year in 2018, but KRG owns open air centers and their #1 tenant is Publix Super Markets, the large grocery chain in Florida with no long-term debt. The link below shows their most recent financial supplement wit the Top 25 tenants located on page 23. I clearly like Publix, The TJX Companies, Ross Stores and Lowe’s in the top 10. Not much of a fan of Bed, Bath and Beyond (remember Linens and Things??) or PetSmart – so there is some risk in their tenant roster. I’m normally well diversified with 40-50 positions and decided to take a little risk with KRG. Very little coverage of the company on Seeking Alpha – but maybe that is a good thing.

    http://ir.kiterealty.com/Cache/1001255303.PDF?O=PDF&T=&Y=&D=&FID=1001255303&iid=4092324

    1. KRG is also on my watch list Lou, they are streamlining to firm up the portfolio and having success replacing lost tenants. RPT (former Ramco-Gershenson) is also on my list, smaller open air focus- but same- doing streamlining etc. Also MAC, TCO. Every retail doom headline puts these all under pressure but besides yield, the value of their r/e could mean for mergers/combinations. The REIT sector is so strong it is hard to commit new money.
      REITs, MLPs, h/y, most CEF, pfds (even high grade) and bb bonds all took a huge swoon together last fall into Dec and that correlation keeps me extra vigilant to a similar selloff. When VNQ, PFF, HYG, JNK all start disgorging if the market goes unfavorable or even neutral on these sectors, doesnt matter what you own, the pressure is high to the downside.

      Of course selling begets bargains and that is where I am.. I’ll take 2% until something hits my target. I am probably going to put a limit order in on KRG at $14 soon. Bea

    2. Lou…be careful with KRG, it looks highly leveraged. Their current plan of selling assets to bring their debt/EBITDA ratio down to 6x does not seem like a winning strategy long term. If you like Publix, TJ Maxx, Lowes, etc. why not invest directly in those names?

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