Another Day In REIT Paradise: We’re Buying Hand Over Fist

Summary

• Realty Income (O) priced an underwritten public offering of 10,500,000 common shares at $57.05 each.
• Simon Property Group (SPG) priced $800 million worth of 1.75% senior notes due 2028 and then another $700 million of 2.20% senior notes due 2031.
• Healthcare Trust of America (HTA) provided a business update for 4Q-20, including its acquisition of over $129 million worth of medical office investments that were 95% leased.

Quote for Today:

“Never spend your money before you have earned it.” – Thomas Jefferson

(Source)

Uncomfortable though it might be, the biggest business news these days continue to be political ones. Tech-related too.

Take Stripe. It might not be the biggest tech name out there, but it’s big enough, handling financial transactions and recordings for millions of online businesses. Yesterday, it became one more example of tech-company censorship in the 2020s, saying it would no longer process payments for President Trump’s campaign website.

Paypal (PYPL), it’s much bigger competitor, did its own round of blocking (not its first time doing so) by shutting down a Christian crowdfunding site called GiveSendGo. The reason given was that it was used to raise funds for people who went to last week’s Trump rally.

Meanwhile, Twitter (TWTR) eliminated 70,000 accounts it associates with the government-mistrusting group QAnon. And there’s also these two pieces of news:

• Rumble, a YouTube rival is suing Google (GOOG) for violating antitrust laws by “unfairly rigging” online searches.
• Amazon (AMZN) is being sued by free speech-touting social media site Parler for shutting it down.

And don’t dismiss Gab’s claim that it’s been gaining 10,000 users per hour after President Trump’s Twitter account was deposed.

All these moves – and more – led to a tweet from another very powerful man, though one who’s still allowed to send such things. Elon Musk told his followers to “Use Signal,” a Facebook (FB) alternative, leading to some mistaken results. As Yahoo! Finance reported yesterday afternoon, by the end of that day, a completely different company saw its shares surge:

“… more than sixfold. That was enough to push Signal Advance’s rally more than 5,100% in three trading days, giving it a market valuation of $390 million.

“Despite reports about the confusion on Friday, the stock has continued to rally. Shares of the Rosharon, Texas-based company surged as much as 885% on Monday before paring the gains.”

This leads me to two conclusions, the first being that investors are more than a little skittish about what all the above-mentioned tech moves might mean going forward. And the second can be summed up by the same Yahoo! story:

“‘We strongly recommend people do their due diligence and always invest with care,’ the company’s chief executive officer, Dr. Chris Hymel, said when reached by phone on Monday. Signal Advance doesn’t have an association with Musk or the Signal app, he said.

“Signal Advance hasn’t filed an annual report with the Securities and Exchange Commission since 2019. The company had no revenue from 2014 to 2016, according to the filing.”

That’s not the first tech-related market misunderstanding we’ve seen in this shutdown era though. Remember Zoom (ZM) last year, where investors put their money into a small Beijing-based mobile phone components company with the same name instead?

To borrow a millennial phrase, “I’m just saying.” You can draw your own conclusions from there.

The World According to Commercial Real Estate

The snapshot below is an illustration of our Durable Income Portfolio’s cumulative returns since 2016. As you can see, it outperformed both the Vanguard Real Estate Index Fund ETF (VNQ) and mortgage REITs (as per data from Nareit) with an average five-year total return of about 13%.

(Source: iREIT on Alpha)

Looking back even longer to 2013, it’s returned around 19% per year – all thanks to its intense focus on quality. Even during last year’s global pandemic, it was a top performer, bringing in 10.7%.

By now, I hope you know how we constantly screen the REIT universe in order to select the best companies with the best risk-adjusted returns. If that sounds like a plan you want to be more invested in, consider visiting iREIT on Alpha to active your two-week free trial.

We offer that knowing full well that you wouldn’t buy a new car without test driving it. And you shouldn’t be expected to pay for an investment service without having the same opportunity.

In the meantime, here’s the short list of what iREIT members get every market day:

• Realty Income (O) priced an underwritten public offering of 10,500,000 common shares at $57.05 each. It intends to combine the resulting net proceeds of $582.3 million with available cash and additional borrowings as necessary in order to fund property purchases in 2021… which its already busy buying up or looking into.
• Simon Property Group (SPG) priced $800 million worth of 1.75% senior notes due 2028 and then another $700 million of 2.20% senior notes due 2031. The proceeds will go toward redeeming all $550 million of its 2.50% senior notes due July 2021, as well as other debt repayment plans.
• Healthcare Trust of America (HTA) provided a business update for 4Q-20, including its acquisition of over $129 million worth of medical office investments that were 95% leased. It also collected more than 99% of its contractual rent due for the period.

In other important news, iREIT has full access to news from FACTSet, which we once again use to provide members with breaking news and real-time pricing on the REITs we cover. Combined with our all-new iREIT iQ (quality) scoring tool, we’re in an excellent position to determine the highest-quality REITs available.

Your One-Stop Shop for “Everything Income”

No matter what’s going on around us, iREIT on Alpha remains committed to helping investors make the most of the good times and navigate the bad.

We not only find great REITs at great prices…

We also show you how to spot them for yourself. Our quality scoring tool makes it immensely easier to analyze various REITs’ economic moats and therefore their long-term stability potential in your portfolio.

When you join, you’ll get immediate access to unmatched tools and REIT research… all with a two-week FREE trial attached!

This will also give you access to dozens of C-suite interviews on my Ground Up podcast, which put you in a preferable, profitable position to make 2021 yours right out of the gate.

Happy investing,

Brad