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The 'Final Four' Net Lease REIT Showdown

Apr. 03, 2022 7:00 AM ETEPRT, O, VICI, WPC74 Comments


  • I think you know who I’m picking, not only to win the semi-final, but to take it all the way to the finish line.
  • I was able to become successful because I became laser-focused on my passion.
  • Although inflation and rising rates are risks, I believe that these four names should hold up well and deliver above average returns for investors.
  • I do much more than just articles at iREIT on Alpha: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

NCAA Final Four Basketball Tournament Signage in Minneapolis Minnesota

JoeChristensen/iStock Unreleased via Getty Images

As many of my Seeking Alpha followers know, I was a "baller" back in the day, which in layman's terms means that I love basketball. I was a walk-on at a small college in South Carolina which believe it or

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This article was written by

Brad Thomas profile picture

Brad Thomas has over 30 years of real estate investing experience and has acquired, developed, or brokered over $1B in commercial real estate transactions. He has been featured in Barron's, Bloomberg, Fox Business, and many other media outlets. He's the author of four books, including the latest, REITs For Dummies.

Brad, with his team of 10 analysts, runs the investing group iREIT® on Alpha, which covers REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives. The team of analysts has a combined 100+ years of experience and includes a former hedge fund manager, due diligence officer, portfolio manager, PhD, military veteran, and advisor to a former U.S. President. Learn more

Analyst’s Disclosure: I/we have a beneficial long position in the shares of O, VICI, WPC, EPRT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (74)

Brad Thomas profile picture
Thanks for reading....

A shout out to my oldest daughter who was named one of the most influential women in commercial real estate: www.kenashleycre.com/...

Come visit iREIT on Alpha (2-week free trial):


PS: Message me for retiree and veteran discounts
As usual, the listed picks are dropping while the market continues to rise.
steve7074 profile picture
@Randol33 Isn’t that a little short-term focused ?
Retire2020 profile picture
@Brad Thomas Congratulations to your daughter's recognition. All the best.
Brad, I enjoy your articles. Can you share with us what is the suitable amount of $ invested based on aged. I guess what is the plan for someone to retire, lets say investing only to O or these four stocks? What is the $ invested to achieve a certain number for dividends in purpose of retiring. Thank you so much.
Brad Thomas profile picture

Thank you for reading and commenting...

As you know, every investor has his or her unique profile, and age is certainly a factor. In general I suggest allocating 10% to 20% of your investment portfolio in REITs. So for example, if you invest 10% in REITs, I suggest that you own at least 10 (10% in each name) to provide some level of diversification.

Also, please remember that we have retiree discounts at iREIT on Alpha. I will send you a discount from our customer service team.

All the best,

@Strive2greatness I will give you a long term investment strategy to consider you won't get from licensed brokers, but it sure worked for me and depending on your background, resources, timeline and objectives this is as close as you can come to a guaranteed template to financial independence. Look only at Dividend Aristocrats and Dividend Kings. Look at their longterm average annual growth and their rolling ten year average annual growth rate. Invest in them and for as long as possible let the dividends simply reinvest. The absolute magic of compounding over time will astound anyone in yield.

For example, Realty Income Corporation (O) has a 15.5% average annual return from October 1994 when going public to now. If you run the math on that it will astound you. It is never too late to start a program like this. Right now my advice has been to go into WPC as its yield has been the standout winner among the top tier for diversified industrial, commercial and/or retail single tenant NNN portfolio.

Those reported yields are a combination of stock price increases and dividend increases, but you can accomplish astounding portfolio growth and dependable increasing spendable income from these players.

Follow Brad and a couple other writers that focus on the REIT players and actually meet with and report on the quality of the management teams and then follow the key parameters of occupancy, payout ratio, amount and type of leverage, dividend yield and increase rates and you will do fine. Additionally, I personally avoid highly regulated industries (like healthcare) and wasting tenants (like apartments). If you don't have personal experience in this area maybe stay with players whose tenants you recognize and are offering goods and/or services that are recession resistant to the general public and you will gain both knowledge and confidence in the process.

Take a look at the tenant mix of O and NNN. You will both recognize many of them, plus you will learn many, especially in Realty Income's portfolio are credit tenants themselves.

Best of luck in your investing, but follow the fundamentals and top tier proven players and you won't need much luck to do well.

God Bless
SallyV6 profile picture
This article title is cute and fun but the BEST triple net lease REIT is …hands down… STOR. Here’s a recent article I found - www.privateeyecapital.com/...

should return 15% a year I think. It’s a top 4 position for me.
Brad Thomas profile picture
@SallyV6 Thank you for reading & commenting... have a great week!
I agree on STOR and first bought it before Buffett... but I am worried about the mysterious and unceremonious sacking of one of if not the best CEO in all of REITs. Something is sure fishy.
seIII profile picture
@King Rat Mary co-founded STORE Capital in 2011, has served as a member of its Board of Directors since 2016, and was named Chief Operating Officer in 2017. She was appointed President in September 2020 and ascended to Chief Executive Officer in April 2021. Mary has played a key role in the Company’s portfolio growth while leading all areas of operations. LONG STOR.
VICI is a very good bet going forward. After all, in the long run the "house" never loses. Long VICI.
Brad Thomas profile picture
@nopilikia I'll be in Vegas in May -- for my birthday!
Brute80 profile picture
@Brad Thomas I live here Brad. Lots of new things to do and in the works. Enjoy your stay and don’t get too crazy! Haha
Brad Thomas profile picture
@Brute80 Let's grab a coffee... I will be there May 10th -- my birthday!
Dr.DaveR profile picture
I am curious as to what started the downtrend for $VICI as of June 2021? Fundamentals look worthy of starting a positron.
Brad Thomas profile picture
@DaveBest As the CEO explained to me on the recent call, regarding short interest:

"...when we closed on the Venetian last week, we paid for the Venetian with I think about 3.2 billion of forward equity, right? So the short interest that everyone has seen in VICI going back to last March when we raised the equity for Venetian and then even more so as we raised the forward equity for MGP in early September, the way forward equity works is when forward equity is raised, the investment banks go into the market and they borrow a share which technically means then they're short, right? They take the borrowed share and they give that borrowed share to those who've participated in the equity race, right?

So for every share they need to give out to those who've just participated in equity raise you've got one more share of short interest exposure. It's not that the banks believe VICI is going down or Agree is going down or Realty Income, all those of us who use forward equity, it's not that they're betting against us, it's just that the mechanism by which you create forward equity.

So when we settled our purchase of the Venetian with our equity proceeds last week, what happened was that the banks had to go out and buy back shares in order to cover their short position.

So you should see what was, I think Brad, about an 80 odd million short position drastically reduced the next time short interest exposure is reported because of the fact that all of the short interest tied to our forward equity is gone."

Come visit us at iREIT on Alpha where you can watch the entire interview (or read the entire transcript)


Thank you for the question :)
Xav Welsh profile picture
Thanks for the article. I’m in all 4 plus a few others. GLTA!
STOR looks quite attractive at the moment, -15% YTD
Brad Thomas profile picture
@zedk47 Yes...

I'm planning to interview the CEO ... come and check out all of our CEO interviews - last week I interviewed:


and this week I'm interviewing:


Come check out the 2-week free trial:


All the best. Brad
@Brad Thomas thank you Brad, why has eprt performed so well over the last 2-5 years? Is it that’s a smaller reit and able to grow ffo so quickly?
Great memory...closing out the season at the Dean Dome a few years ago against Duke with the crowd going crazy as Grayson Allen missed 3 out of 4 free throws as the crowd erupted. My son's tenure coincided with Lauren's. I am sure that she knew of him. He is now in pro sports at a higher level. If you want, private message me.
Brad Thomas profile picture
@hfloch I just sent you a message.. I look forward to catching up.
hawkeyec profile picture
I prefer WPC which I have had for a while. Best yield of the four. Oh, and just for your edification the goat is Bill Russell, the only veteran of any sport with more rings than fingers on both hands.
Brad Thomas profile picture
@hawkeyec Good luck and thanks for commenting. All the best. Brad
Bucknfl profile picture
VICI appears to be flirting with moving above 30 soon.
Brad Thomas profile picture
@Bucknfl Yes, spring should release as soon as MGP closes :)
WPC, O, VICI and STOR among my top holdings. Wonder if VICI will Indeed appreciate after the big deal goes through? And will the divvy be raised? Incidentally, Wolf also got me into BASF just before the war. One of my biggest holdings now, and I am not as worried about it as commenters on your piece on it.
HASK59 profile picture
I own 3 of the 4 REITS mentioned here and plan to hold them in my IRA for a long time. As for hoops, I live in the Kansas City area and I'm cheering for KU to knock off UNC tomorrow night. My wife has her PhD from KU and is a big fan. She even taught Danny Manning in one of her classes back in 1986.
Brad Thomas profile picture
@HASK59 PhD? She should be writing on Seeking Alpha, LOL. Thanks for reading and have a great weekend.
HASK59 profile picture
@Brad Thomas She's not an investment person. Rock Chalk Jayhawk. Go KU. REITS getting hammered across the board today. Surprising.
I always enjoy your articles, but....good grief man, focus!!

Kidding: I'm a basketball fan myself.
Brad Thomas profile picture
@BryanMill$ Ha. I love writing about real estate and I like providing entertainment value. Have a great weekend.
I’m in all 4 finalists, but only adding to VICI at current pricing. Pleasantly surprised to see your VICI buy below target at $36. Room to run!

And sorry, but I got Kansas winning it all.

Thanks for the article.
Brad Thomas profile picture
@pelican11 Regarding VICI, the gaming sector deserves a better multiple than 15x... now that O has entered the space, I think we'll see more deal flow and respect from Mr. Market....

Regarding Kansas, keep the wager modest (aka ...protect principal at ALL costs).

Thanks for reading and have a great weekend!
seIII profile picture
Agree received its issuer rating increase from Moody’s on 3.30.22 to Baa1 and Joey Agree bought 3309 shares on 3/23-3/24. Any other triple net’s projected to receive a ratings increase and/or have their senior leaders buying shares? BTW - MJ was the 2nd best player of all time after Bill Russell. 2 time college national champion, 11 NBA titles in 13 years, 2 NBA titles as player coach, greatest defensive player of all time, greatest rebounder of all time and greatest champion of all time. Russell is the Realty Income of the NBA.
Brad Thomas profile picture
@seIII I grew up as a Dr. J fan ... I met Dikembe Mutombo last week at a conference in West Palm Beach.... he's a big guy! Thanks for reading and all the best
seIII profile picture
@Brad Thomas Any other triple net’s projected to receive a ratings increase and/or have their senior leaders buying shares?
Brad Thomas profile picture
@seIII Good question... perhaps FCPT goes to BBB (from BBB-) and EPRT should get rated (by S&P)...
thirdcamper profile picture
ADC didn't make the quarter finals?
Brad Thomas profile picture
@thirdcamper Well..

I knew that was coming....

ADC is a great net lease REIT and kudos to Joey Agree for taking this ugly duckling into a beautiful SWAN. I hope to interview Joey this week for iREIT on Alpha members.... Come check out our best-in-class marketplace platform: seekingalpha.com/...

Have a great weekend and all the best.
thirdcamper profile picture
@Brad Thomas I knew you liked it, so I thought it might get there.
@Brad Thomas Quite remarkably I own all four! I have owned O since the beginning of time (and am not adding unless it is below $70) but I have recently added VICI after reading your recommendation. All four are winners! Cheers.
Brad Thomas profile picture
@Dr. LouX Great job! Thanks for reading and all the best!
Your instincts were certainly intact on the Duke/UNC matchup. Even as a NCSU grad (although I did send quite a few checks to UNC while my step son attended) I was pulling for UNC all the way. And what a game it was! A nail biter to the very end. What a game. They have an uphill battle ahead of them against Kansas.

I am fairly long with WPC at 830 shares but it certainly hasn't been an exciting investment, kind of like watching paint dry. As a near retiree (again) I do like the dividend income it generates! VICI looks interesting but I would worry about the real recovery of EPRT. Has the pandemic completely soured the folks against experiential activities like movies, theme parks and the like? I'm probably wrong but my gut says people have generally switched on line services like Netflix, Prime Video etc., for their movie entertainment. Time will tell but I will watch that one from court side.
Brad Thomas profile picture

My oldest daughter looked at NCSU, UVA, W&L, Duke, and UNC....but the first minute she stepped onto the UNC campus, she said, that's where's I'm going...

Fast forward a few years, she was just named as one of the most influential women in commercial real estate:


Thanks for reading and commenting. Have a great weekend.
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