REET: Issues As Hawks Circle Above

Valkyrie Trading Society
Investing Group Leader

Summary

  • REET is not going to be able to escape the higher cost of capital, and the Fed seems determined to keep going with hikes.
  • While REET has a lot of exposure to resilient categories that should be able to withstand higher rates, as a global value-weighted REIT, it has a lot of offices.
  • We continue to worry about office exposures, especially as investment banks are expecting real estate to be one of the main loci of restructuring activity.
  • Real estate REITs should be a safe investment, so prices remain high. If you want to speculate, it makes sense to do it elsewhere when looking for value. REET isn't great.
  • Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More »

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The iShares Global REIT ETF (NYSEARCA:REET) tracks a pretty vanilla portfolio of REITs, which means there's a fair bit of exposure that we don't love. In particular, we remain wary of offices, where WFH has persisted longer than anyone expects despite COVID-19

Thanks to our global coverage we've ramped up our global macro commentary on our marketplace service here on Seeking Alpha, The Value Lab. We focus on long-only value ideas, where we try to find international mispriced equities and target a portfolio yield of about 4%. We've done really well for ourselves over the last 5 years, but it took getting our hands dirty in international markets. If you are a value-investor, serious about protecting your wealth, us at the Value Lab might be of inspiration. Give our no-strings-attached free trial a try to see if it's for you.

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Valkyrie Trading Society
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The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.

They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

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