Positive contributors to relative performance included stock selection in the healthcare sector, an underweight allocation to the lodging sector, and an overweight allocation to the residential sector. An underweight allocation to the regional mall sector, an overweight allocation to the cell tower sector, and stock selection in the industrial sector detracted from relative performance.
Year to date, positive contributors to relative performance included stock selection in the diversified, healthcare, and triple net sectors. An underweight allocation to the regional mall and shopping center sectors, as well as an overweight allocation to the cell tower sector detracted from relative performance.
In the June 2021 REIT Outlook titled, “More to Net Lease REITs than Interest Rates”, we dive into net lease REITs and how their unique business strategy allows them to generate impressive earnings growth, despite some of the lowest organic cash flow growth among REIT subsectors. While on the surface they may seem to be a play on interest rates, the unique strategies and underlying properties warrant a more robust research process to determine the future performance of each REIT. We believe we have identified certain net lease REITs that provide an attractive risk-adjusted return scenario going forward that should succeed in multiple interest rate scenarios, including the base case of higher inflation in the near term.
Previous editions of the Chilton Capital REIT Outlook are available at www.chiltoncapital.com/category/library/reit-outlook/.
An investment cannot be made directly in an index. The funds consist of securities which vary significantly from those in the benchmark indexes listed above and performance calculation methods may not be entirely comparable. Accordingly, comparing results shown to those of such indexes may be of limited use.
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 investment or any other security.
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