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.
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5/28/2025
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For those of you interested in REITs and their preferred here is a good read. Sorry Bear, author has no interest in mreit’s he considers them too highly leveraged. Conservative investors should apply that concept to other sectors of the market.
https://seekingalpha.com/article/4788047-when-reit-cut-dividend
Another good read from the same company regarding what happens in a market panic and the opportunities presented.
https://www.2ndmarketcapital.com/2025/04/14/reit-total-return-full-portfolio-review-heading-into-april-2025/
Weyerhauser WY is a timber-oriented REIT. When Canadian tariffs were announced, investors IMHO overdid their enthusiasm for WY, assuming that it was the home team favorite, forgetting that WY operates both in Canada and the US. Where lumber tariffs have been an issue for years.
WY seems to be quietly adjusting to the latest tariff risks by selling some Canadian assets and buying more US timber lands. A Canadian mill is being sold for $120-C million. Timber land in the US Southeast is being purchased for $375 million.
WY has a larger market cap than its competitors PotlatchDeltic (PCH) and Rayonier (RYN). WY pays a fixed dividend with a special dividend in good years. Current yield is 3.3%. YTD the stock is down 10%.
There are conflicting economic crosscurrents now. Interest rates persistently high. Existing home sales down YTY. A housing shortage. New home sales up YTY. Lumber prices up YTY but down off peaks. WY is a good company. I don’t see a reason to hurry to buy it just now. WY is on my watchlist. JMO. DYODD.
Bear, I have been watching WY for 30 years. Don’t ask me why I haven’t bought. Probably because I have a feel for the building market. After the GFC, they changed to a REIT so there is no fixed payout. It is possible now the dividend can vary based off the earnings a whole lot easier than before when they were not a Reit.
Home loans are back above 7%, housing prices are mixed with some areas of the country up and others down.
As with anything these days making a product cheaper to keep margins up sometimes means quality goes down.
I would be willing to pay more for DF than SYP just for the quality.
DF= Doug fir and SYP= Southern yellow pine
I did well with WY. I bought them on a Barrons’ recommendation way back when they became a REIT and held them until last year. I thought I might jump back in this year, but the half dozen or so Fed rate cuts haven’t materialized and the boom in new home construction hasn’t pushed WY up. (Off 11% YTD.) Lots of other competition with a 3.3% divvy. On the watch list. JMO. DYODD.
Bear, go with RYN with its recent sale of majority ownership of the New Zealand business and paying down debt it should be debt free. It also plans on paying a one time special dividend before year end. The current yield is higher than WY and stock is cheaper. Even if they cut the dividend to 3% like WY I think they are better positioned if there is a rebound in housing and if not, well no debt to service and building cash.
Bear, just an observation. WY went REIT after the GFC almost any investment if you bought after that market sell off would be up.
I am glad to see a 100 yr + company change with the times and be successful with the change. GP which was started in depth of the Great Depression was more successful than WY and by the 1980’s was the largest lumber and paper products company in the world at the time. With the changes happening at the time with the emergence of mega stores like HD & LOW consolidating the retail market this caused both companies to update their long term business plan. GP brought in a CEO who had never been in the building business and they were not as successful in the change as WY.
Just my opinion, I like watching both WY and RYN
REITs have popped back up on my radar screen amidst the on-off tariff threats and economic uncertainty. I tend to favor smaller and out of favor investments. A trio of smaller REITs from – gasp – The Other Website that are -gasp – not either O, VICI, WPC or ADC. Net lease. All have pro’s and con, some more obvious than others (DEA).
DEA Easterly Government Properties, Inc.
YTD – down 28%
Yield – 8.5%
BNL Broadstone Net Lease, Inc.
YTD – up 1.1%
Yield – 7.2%
PINE Alpine Income Property Trust, Inc.
YTD – down 9.4%
Yield – 7.4%
Current investing hypothesis: what I think the government is pushing for:
Gas $2.00. 10-year Treasury 4.00%
Adjusting portfolio accordingly. “The train to Grinder Switch is running right on time.” JMO. DYODD
WP Carey WPC is starting a 1.2B stock offering, apparently an ATM program to fund acquisitions. WPC is up 15.8% YTD. It yields about 5.8%. WPC, once touted as a Sleep Well At Night stock for its dividend record was/is a popular pump over at The Other Website. It became controversial in 2023 after an unexpected dividend cut and a spin-off surprised investors. Carey continues to get glowing reviews at TOWS. Also, a glowing review from Zachs on April 15, 2025. JMO. DYODD.
I bought a little WPC after the dump in 2023 and haven’t sold it yet. If I think a dividend company/reit can pay 9-11% cagr between share appreciation and dividends over some period of time (10 years?) after right sizing their dividend, and has some basic function that is understandable to me, it seems like it can have a spot in the portfolio. It’s sort of how I feel about ADM, DOW, MRK (maybe WHR eventually…maybe IFF), etc. I know that’s not a great way of thinking about opportunity cost, but just seems sensible, like investing in common shares of utilities.
YieldMax has a new options income REIT, RNTY YieldMax Target 12 Real Estate Option Income ETF. Its target yield is 12%. “Top holdings at launch include Texas Pacific Land Corp, Digital Realty Trust Inc., and Prologis Inc.” – ETF Trends. RNTY is two weeks old. I found it on a new ETF list.
Investment sentiment. Caveat Emptor. Option income strategy ETFs have a lot of risks. Understand what you are buying and how it performs in different markets. Don’t say I didn’t warn you. JMO. DYODD.
https://www.yieldmaxetfs.com/wp-content/uploads/2025/04/rnty-497k_012725_web-ready.pdf
Regarding ‘Yield Max’ shares – just be careful that your INCOME from the high yield products is more than your capital LOSSES. and remember income is taxable but losses are capped for Federal taxes.