Positive contributors to relative performance included an overweight allocation to the cell tower sector, as well as stock selection in the healthcare and data center sectors. An overweight allocation to the diversified sector, an underweight allocation to the self storage sector, and stock selection in the industrial sector detracted from relative performance.
Year to date, positive contributors to relative performance included stock selection in the data center, healthcare, and triple net sectors. An underweight allocation to the regional mall and shopping center sectors, as well as an underweight allocation to the self storage sector detracted from relative performance.
In the July 2021 REIT Outlook titled, “Hidden Vaccine Value in Diversified REITs”, we identify several undervalued REITs in the oft-ignored Diversified sector that should provide exposure to the ‘reopening’ trade. The focused REITs in the shopping center, lodging, and regional mall sectors have had an incredible run since the Pfizer vaccine announcement on November 9, 2020. While we concede that these properties will have some of the best cash flow growth in the near term as they attempt to regain pre-COVID rent and occupancy levels, the valuations do not fit the Chilton REIT investment criteria. Instead, we have been adding exposure to these property types through diversified REITs, which should also experience similar cash flow growth but can be bought at more attractive valuations.
Previous editions of the Chilton Capital REIT Outlook are available at www.chiltoncapital.com/category/library/reit-outlook/.
An investment cannot be made directly in an index. The funds consist of securities which vary significantly from those in the benchmark indexes listed above and performance calculation methods may not be entirely comparable. Accordingly, comparing results shown to those of such indexes may be of limited use.
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 investment or any other security.
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