Tradition. Innovation. Results.

REIT Strategy

 

Inception: January 1, 2005

Benchmark: MSCI US REIT Index

Who We Are

Bruce G. Garrison, CFA

Matthew R. Werner, CFA

Blane T. Cheatham

Parker T. Rhea

Bruce G. Garrison, CFA

Managing Director & REIT Portfolio Manager

Experience: 43 years

 

Mr. Garrison is the senior portfolio manager for the firm's REIT Strategy. Prior to joining Chilton Capital Management in 2011 he served as a Director in the Investments Group at Salient Partners. Mr. Garrison began his career in 1972 with Morgan Guaranty Trust Co. His career experience also includes tenure as Managing Director for Kidder Peabody & Co., and Paine Webber (now UBS), where he participated in over $8 billion of financings (primarily equity) involving REITs. In 1993 and 1994, Mr. Garrison was voted Institutional Investor All American for REIT Research, first and second, respectively, and won the Realty Stock Review All-Star Analyst Award in 1992, 1993, and 1994.

 

Mr. Garrison has a BBA and MBA from the University of Texas at Austin. He is a CFA charter holder, a member of the CFA Institute, and the CFA Society of Houston and a member and former governor of the National Association of Real Estate Investment Trusts (NAREIT). He also serves as a Board Member of the Houston S.P.C.A.

 

Mr. Garrison serves on the firm's Investment Policy Committee.

Matthew R. Werner, CFA

REIT Portfolio Manager & Analyst

Experience: 8 years

 

Mr. Werner is an analyst and portfolio manager for the firm's REIT Strategy. Prior to joining Chilton Capital Management in 2011, he served as Associate in the Investments Group at Salient Partners where he performed due diligence on real estate private equity and hedge funds.

 

Mr. Werner has been quoted in numerous national publications and has been interviewed as a "REIT Expert". He has made REIT education a priority by speaking to symposiums and investor associations around the country.

 

Mr. Werner has a BS (Honors) from Boston College, Carroll School of Management. He is a CFA charterholder, a member of the CFA Institute and the CFA Society of Houston, and a member of the National Association of Real Estate Investment Trusts (NAREIT). He is also a Board Member for the Amigos de las Americas Houston Chapter, an organization that sends local high school students on community service trips to rural, underprivileged Central and South American communities.

Blane T. Cheatham

Analyst

Experience: 2 years

 

Mr. Cheatham joined the Chilton Capital Management REIT Research Team in 2013 to assist in the analysis and recommendation of public REIT securities for the Chilton Capital REIT composite.

 

Mr. Cheatham attended Texas A&M University and graduated summa cum laude in 2011 with a BBA in Finance. He then received a Master’s Degree in Real Estate Finance from Texas A&M in 2013.

 

Mr. Cheatham passed all three levels of the CFA Program and may be awarded the charter upon completion of the required work experience.

Parker T. Rhea

Analyst

Experience: 5 years

 

Mr. Rhea joined the Chilton Capital Management REIT research team in 2016 to assist in the analysis and recommendation of public REIT securities for the Chilton Capital REIT Strategy.

 

Prior to Chilton, he worked as an analyst for KeyPoint Capital Management, a long/short equity hedge fund with a real estate focus. Parker also was an analyst at Peloton Real Estate, where he helped establish an office/industrial acquisitions and development platform.

 

Mr. Rhea graduated from Davidson College with a BA in Political Science. He later earned a Master of Science in Finance from the University of Texas at Dallas, as well as a Master of Real Estate Development from the University of Southern California.

Investment Philosophy and Context

 

Real estate is an uncorrelated, inflation-linked asset class that complements a multi-manager portfolio offering diversification, income with growth, and the potential for risk reduction and return enhancement. The strategy utilizes publicly traded real estate investment trusts (REITs) and real estate related entities based primarily in North America.

 

We believe public REITs are superior vehicles for investing in real estate due to their liquidity, transparency, and total return characteristics. Investing in public securities enhances our ability to diversify by geography, sector, strategy, property, and tenant while maintaining portfolio liquidity.

 

Four primary tenets have formed the management of our REIT strategy since inception: (1) experience; our research/portfolio management team has over 45 years combined industry experience, (2) specialization with an emphasis on transparency; our strategy uses only liquid public equity securities (no mortgage REITs, no blind pool structures), (3) depth of knowledge of every portfolio holding; extensive modeling of every security that includes nationwide property tours and meetings with management, (4) communication; we publish monthly what we are thinking and how what we are seeing impacts portfolio strategy.

 

Portfolio Construction

 

The strategy does not use leverage, derivatives, or short-selling. Portfolios are constructed with 25-35 securities having an  average annual turnover of 30%. REIT property types include apartments, regional malls, shopping centers, lodging, office, industrial, self-storage, data centers/tech, and a variety of health care related facilities. All portfolio companies are classified into one of three categories, and portfolios maintain allocations to each within the following risk categories:

 

Core (40% to 70%): Companies with superior balance sheets, established track records, and moderate growth

 

Value Add (20% to 50%): Companies with moderate leverage, established track records, and high growth potential, both internal and external

 

Opportunistic (0% to 25%): Companies with high leverage, unproven track records, and high growth potential, both internal and external.

 

Investment Team

 

Our REIT research and portfolio management team is comprised of three individuals each having assigned sector industry and company coverage. Analyst-specific expertise within industries and companies, combined with an emphasis on primary research, critical thought, collegial debate, and sharing of knowledge drives idea generation.

 

Investment Process

 

The process begins with a top-down analysis of property types and geographic submarkets which helps to drive the bottom-up research that forms a buy and sell price for each security in the universe. The approach includes estimates of net asset value, earnings (funds from operations’ for REITs), balance sheet analyses, and company specific ratio comparisons by property type, geography, and peer group. Qualitative factors are also evaluated, including property visits nationwide, REIT management meetings, and quality grade.

 

The benchmark is the MSCI US REIT Index. Constructed portfolios may significantly overweight or underweight sectors commonly found in the REIT benchmarks. The combination of our research efforts and proven investment approach helps to avoid being labeled a closet indexer.

 

Strategy Availability

 

The strategy is available to investors through separately managed account, unified managed account, or mutual fund structures.

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