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Even if we assume the covid mess to last Jan 2022, some of these solid reits with good balance sheets and business case may do well. The valuations on EBITDAC metric - earnings before EBITDA and corona - seem surreal. Besides oil, this may be the best valued sector in the market.

I am selling Jan 21 below strike puts on some of these and buying shares for others and balancing that optimism my selling naked calls on RDFN and ZG - 2 stocks behaving as if the best days of residential real estate are about to return in a hurry.

Thoughts

Anurag
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I have 'no faith' in REITs at this point. I wouldn't touch anything with a retail tenant or an oil & gas tenant. The digital infrastructure REITs have small business tenants, and those are iffy too. The healthcare REITs are falling apart, too.

I like American Tower. After that, I haven't got another.
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The apartments, single family residential (INVH) are going to be okay. They are reasonably priced now.
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I have 'no faith' in REITs at this point.

Yeah, Rob, I understand where you're coming from. Most of my
retail REIT stocks have been decimated: BRX, KIM, MAC (ugh!),
SKT (Ugh!!!), SRC, and STOR.

ROIC is only a little in the red for me but that's because I
bought below its IPO price back around 2010.

O is in the green for me and proving to be quite resilient,
probably because of the respect it gets from investors
(or maybe I'm being delusional and am merely lucky with O).

CUBE, MNR, STAG and UDR are way off their highs but are
still strongly profitable for me.

I think BRX, KIM, ROIC, SRC and STOR will be fine although
some of them may reduce their dividends for a while but
they have decent dividend to FFO ratios and decent debt
ratios and most of their tenants are open. At least 60%.

MAC and especially SKT are in for some serious restructuring
that will include suspending their dividends, selling off
properties to raise capital and maybe selling new shares to
raise capital severely diluting existing shareholders at below
NAV.

I just don't see how SKT will survive. The fact that insiders
have not been buying shares at these prices suggests to me
that they just don't know what the future holds for SKT
either.

David
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I wouldn't touch anything with a retail tenant
The retail REIT's touted diversifying into entertainment (movies), restaurants and GYM. Corona shut all the 3. AMC, and Fitness 24 are considering filing for bankruptcy.
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I'm kind of flustered by the binary nature of the consensus I'm seeing in discussion at MF and all financial sites. Some people a great many people are convinced that bouncing out of this will be imminent and that the whole thing is overblown....

I'm not in that camp, but I also get a little "FOMO" out of reading that perspective.

I'm clearly in the "Yeah, indoor malls are Done." mindset right now, and without a full and true vaccine I just don't see that going away. I'm not sure where you have to have one's head at to believe that the consumer society isn't based on shopping as entertainment and social behavior, and that major forces for that are shopping malls, even now. I gravitated early towards Amazon because I dislike salespeople, but I feel like I recognize what other people do and what motivates them... it just looks severely 'broken' by this pandemic.
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but I also get a little "FOMO"

The decline and bounce back is so vicious, it is natural to have the fear of missing out. Also, Fed is pumping Trillions and Trillions into the economy, and that money has to push something up. Will they push the price of the labor? NO, Are they going to create lot of new physical assets? No. So is it wrong to conclude the prices of financial assets are going to be pushed up?
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I'm kind of flustered by the binary nature of the consensus I'm seeing in discussion at MF and all financial sites. Some people a great many people are convinced that bouncing out of this will be imminent and that the whole thing is overblown....

Hey Rob!

Yodaorange made a rare appearance and post this afternoon over at the Fool's REIT discussion board with his thoughts about REITs and their future:

https://boards.fool.com/reitnut-50-year-portfolio-review-822...

Interesting analysis and thoughts.

David
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I think it's simply too early to tell how this is going to shake out in regards to REITs. We know we're going into a recession, and it's causing significant credit problems, though it's not credit-driven at its heart. I simply think there are too many unknowns to do much. VNQ is down about 24% from recent highs and down only 17% or so from the end of the year. That's a pretty light drop for the start of a recession.

Doling out money to businesses who then cut employment won't stimulate the economy as well as giving that money directly to people who will spend it.

Jim
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