Natural disasters are, unfortunately, part of life.  They are predictably unpredictable, which is an attribute that can influence population growth, job growth, and real estate.  The invention of insurance, provided by companies that can diversify their risk among multiple cities, has enabled cities that are prone to such disasters to attract residents and employers alike.  […]

Supply chain innovation, e-commerce, and measured new supply have led to the best operating environment for industrial REITs that we can remember.  However, investor demand has also surged.  Industrial real estate is trading at record-high cash flow multiples in the public and private markets.  For the first time in our memory, the best coastal warehouses […]

It seems every day a negative news article is written about brick-and-mortar (B&M) retailers, questioning the future of retailers and retail real estate due to the impact of e-commerce (also read “Amazon” (NASDAQ: AMZN)).  As a result, the S&P Retail sector ETF (NYSE: XRT) is down 5.9% year to date, and the Bloomberg REIT Shopping […]

Stock performance over the long term should be based on fundamentals, but short term performance can be heavily influenced by sentiment.  Nearly impossible to quantify, sentiment can most certainly be felt, seen, and heard.  We believe the recent collapse in mall and shopping center REIT share prices may be the product of one-sided anecdotes, misleading […]

After 5 years of above average apartment REIT Same Store Revenue (SSRev) growth, concerns of increasing supply in 2016 threatened the outlook for the sector.  As a result, apartments (Bloomberg: FNAPTTR) underperformed the MSCI US REIT Index (Bloomberg: RMS G) by 570 basis points (or bps) in 2016.  Yet, in spite of the negative sentiment, […]

The term ‘cash cow’ originates from the incredible investment characteristics of a dairy cow. Despite only needing to feed a cow inexpensive hay, it can produce around 20,000 gallons of milk in a lifetime, and then be sold for meat. Used in a matrix designed by Boston Consulting Group, cash cows are products or companies […]

A lot has happened since we last wrote about data center REITs in December 2013. We believe the space remains undercovered and misunderstood, while strong secular demand shifts will benefit the entire sector over the coming decade. Our research indicates that network-dense data center REITs should continue to grow cash flow per share faster than […]

Houston is the home of the comeback. In February, Houston hosted Super Bowl LI, in which the New England Patriots trailed by 25 points in the third quarter only to rally back to beat the Atlanta Falcons in dramatic fashion in overtime.  The Super Bowl was a timely example of the performance of Houston’s economy and […]

Mall REITs have suffered from a steady drumbeat of negative news for several years now given the shift toward e-commerce at the expense of ‘bricks and mortar’ real estate.  Recently announced plans to close additional stores at Macy’s (NYSE: M) and Sears (NASDAQ: SHLD) have added fuel to the fire and pushed mall REITs further […]

In our 2016 Chilton REIT Forecast, we were optimistic on total returns, forecasting a base case of +10% to +12% assuming flat interest rates and cap rates.  Our projection was close as the MSCI US REIT Index (Bloomberg: RMZ) finished 2016 with a total return of +8.6%.  For reference, the Chilton REIT Composite produced a […]