No. of Recommendations: 12
Thanks Murph,

This is good and I'm saving it to re-read (before it goes to the paywall). There are some new-to-me REIT's here. FIrst reaction to one: Summit...1st thing to dive in a downturn is travel.

The ones I know and have...

I am happy with KIM (2.3% allocation)- started buying when it started popping up at $20 in Aug 17, i.e. too early, but got basis down to $19.50 or so through covered calls. I kept buying through 2018 (not believing in the death of brick & mortar) down to the $14's; but admit to selling my shares in a high yield bond fund to do it.** Now at $16.70, I'm feeling a margin of safety. See ** below.

I am troubled by SKT. I think the management is smart, focused, and cares. But is the thesis that brands "need" the outlets broken? In my area (Erie), will people drive 40 miles to the non-Tanger outlet when the mall and TJX stores are 10-20 miles? Where I spent the last part of my career (Pittsburgh) there is a Tanger that's closer and in the "right" growing, wealthy, one-county-out suburb. I think it gets traffic but don't know. I still travel 25% for biz and know there are two Tangers in Columbus, OH. One that was placed 55 miles south - maybe it captures some Xenia traffic but lately it's been sleepy in the parking lot there as I drive past. This August (start of school shopping) they had an event: a band and amusement rides. This is what management was saying about helping the tenants with marketing spend. Note this was also Ohio tax-free shopping weekend (7-Aug). Even so the distance is tough, IMO. This seems to be changing, however, as Columbus's growth to the south is seen by newly widened roads and improved I-71 exits. The southern growing neighborhoods of Grove City area cut the distance in half. The northern Tanger outlet is "one county out" but only about 30 miles from downtown. Ohio announced a new I-71 interchange right there just this March. See here:

https://www.bizjournals.com/columbus/news/2019/03/11/exclusi...

So I'm thinking there's a method that management is using to bring these stores closer to customers (bigger population centers) like the new Nashville announced last Fall. And the closing of 4 units that are in not so populated areas. See updated announcement 1-Apr here:

http://investors.tangeroutlet.com/file/Index?KeyFile=3973272...

Anyway I'm not feeling so safe with a $22.25 cost basis. I have a 1.4% allocation so I think there's room. So, through written June puts, I'll lessen cost of current shares or be put new shares that will effect a $21.-21.25 basis either way. So, if Brad's no valuation change scenario comes to fruition, I'll be good with that (somewhat safe) and a decent total return.

I think this is a BIG if for SKT: ...about 48% undervalued if management succeeds in turnaround and restores to historical growth.

And now for the **...in terms of what mix of stocks/bonds/cash is incredibly important because NO DIVIDEND STOCK IS A TRUE BOND ALTERNATIVE.

...GUILTY but don't see the value in bonds right now. I do, however, have a 3 year cash cushion out of the market.

Many of you REIT board regulars know all about investing better than me. I muse to perhaps educate a newbie or two about not giving up when you buy at too high a price or something you believe in tanks or flattens out....keep reading; researching; keep records; understand when the thesis still stands and when it breaks.

Joe
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