The information contained herein should be considered to be current only as of the date indicated, and we do not undertake any obligation to update the information contained herein in light of later circumstances or events. This publication may contain forward looking statements and projections that are based on the current beliefs and assumptions of Chilton Capital Management and on information currently available that we believe to be reasonable, however, such statements necessarily involve risks, uncertainties and assumptions, and prospective investors may not put undue reliance on any of these statements. This communication is provided for informational purposes only and does not constitute an offer or a solicitation to buy, hold, or sell an interest in any Chilton Capital Management investment or any other security.
In 2020, positive contributors to relative performance included an overweight to the cell tower and data center sectors, and stock selection in the residential sector. An underweight to the self storage sector, and stock selection in the office and diversified sectors detracted from relative performance.
Positive contributors to relative performance included an underweight allocation to the self storage and lodging sectors, and stock selection in the residential sector. An underweight allocation to the regional mall and triple net sectors, along with an overweight allocation to the cell tower sector detracted from relative performance.
In the July 2020 REIT Outlook titled, “Essential REIT Evaluation: Industrial and Office,” we continue our theme of ‘Essential’ from the June 2020 REIT Outlook, this time exploring the industrial and office sectors. Industrial has been able to post a positive performance year to date due to its high quality balance sheets, low dividend payout ratios, and the secular trend of e-commerce that has only been accelerated by COVID. We believe that an upcoming supply and demand imbalance due to the throttling of supply during COVID will help these companies grow into their relatively high cash flow multiples, which are the highest of the sectors we have examined thus far. At the other end of the spectrum is office, which we expect to have long term issues due to the risk of work from home. However, we believe Sunbelt office could potentially be a beneficiary of a work from home trend, as well as benefiting from their lower cost of living, fewer regulations, and warmer climates. Therefore, we believe that the non-gateway office REITs should trade above their current rank as the lowest multiple sector that we have examined thus far.
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