The information contained herein should be considered to be current only as of the date indicated, and we do not undertake any obligation to update the information contained herein in light of later circumstances or events. This publication may contain forward looking statements and projections that are based on the current beliefs and assumptions of Chilton Capital Management and on information currently available that we believe to be reasonable, however, such statements necessarily involve risks, uncertainties and assumptions, and prospective investors may not put undue reliance on any of these statements. This communication is provided for informational purposes only and does not constitute an offer or a solicitation to buy, hold, or sell an interest in any Chilton Capital Management investment or any other security.
Year to date, the largest contributors to relative performance were an overweight allocation to data center/tech sector, an underweight allocation to healthcare, and stock selection in the lodging sector. Detractors from relative performance included an overweight to malls, an underweight to self storage, and stock selection in the shopping centers sector.
Positive contributors to relative performance included stock selection within the industrial and data center/tech sectors, and an underweight to the healthcare sector. Stock selection within the shopping center sector, along with underweights to the net lease and self storage sector, detracted from relative performance.
In the August 2019 REIT Outlook titled, “Mall REITs: Charting New Territory,” we discuss some of the exciting changes occurring at the mall. While the stocks seem to be selling off as failing retailers are closing stores, we believe the market is ignoring the new tenants that are taking their place. Some examples include Esports, CBD, and Coworking, which we believe will contribute positively to the mall ecosystem, driving traffic, occupancy, and rents. While valuations in the private market remain opaque, we believe that the public mall REIT prices have fallen far worse than what the fundamentals reflect. As a result, we can’t say when a catalyst will reverse the trend, but we are confident that investors will be rewarded for sticking with this out-of-favor sector.
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