7 REITs I own and never intend to sell

I’ve been known around The Motley Fool as “The REIT Guy” by many of my colleagues and readers, so it shouldn’t be so surprising that my own stock portfolio is filled with REITs or real estate investment trusts. . In this fool live Video clip, recorded July 16, I discuss my most important REIT positions with my colleague Brian Withers and our Director of Growth Anand Chokkavelu, and why I love each one for the long term.

Matt Frankel: I’m the real estate guy, so unsurprisingly my biggest category is Real Estate Investment Trusts, or REITs. I have seven in my top 20. They are Digital real estate trust (NYSE: DLR), STORE Capital (NYSE: STOR), Empire State Real Estate Trust (NYSE: ESRT), Properties of Healthpeak (NYSE: PIC), Tangier points of sale (NYSE: SKT), Real estate income (NYSE: O), and Ryman Hospitality Properties (NYSE: RHP). If you’ve never heard of them or don’t know what they’re doing, you’re probably not alone. This is where Brian and my investing styles differ. Most of his actions needed no explanation. Everyone knew what they were.

What are the latter doing? Just two-sentence explanations from each. Empire State Realty is my biggest dollar equity position. It’s a little more than, I think, 7% of my portfolio right now, a little more than that. They own the Empire State Building, they own other office buildings in and around Manhattan. A big differentiator, aside from owning such an iconic property, is that they also operate the famous Observatory atop the Empire State Building, which remains a must-see tourist attraction in New York City. It is an absolute cash dispenser. Normally, they derive about 25% of their income from it, although this represents about 3% of their acreage. Cash machine business. Most office REITs do not have anything comparable in their portfolio.

Realty Income, they are the first real estate I have ever bought. They own more than 6,500 independent properties, mostly leased to non-discretionary retailers. Think of companies like Walgreens, it is, I think, their biggest tenant. They own a lot of dollar store properties, wholesale clubs like BJ and Costco and things like that. They own this type of property, independent, that is to say, a single tenant. They have an excellent track record. Is the slideshow better now?

Anand Chokkavelu: It does.

Frankel: Awesome. Sorry, Tim. Either way, real estate income. Let’s go. They have an excellent track record. It has been a public company since 1994. Since that time, it has generated annualized returns of over 15% per year, which is an excellent 27-year track record. He is a Dividend Mristocrat. They actually have a trademark on the term “the monthly dividend company”, which a lot of people don’t realize. This is there if you mentioned the monthly dividend company ie Realty Income. Great performance, great income. Digital Realty Data Center. It’s the only one Brian said he could buy.

Brian Withers: I own Square.

Frankel: OK. Well, outside of REITs. I call them a different type of tech stock. They own the actual properties that house the servers and network equipment that Brian’s actions pretty much rely on. A great way to play that out at real estate, Tanger Outlets. If you live in a coastal area, you’ve probably seen a Tanger Outlets property before. I know there is one near Anand in the national port.

Chokkavelu: Yes.

Frankel: Yes, it is the largest independent factory outlet company. Simon Real Estate Group (NYSE: SPG) is the leader in the space, Tangier is the largest which focuses only on points of sale. By the way, I will make the slide set available to anyone who wants it. Store Capital, a business very similar to Realty Income. More recent it hit my radar because it’s the only reading Warren Buffett invests in through Berkshire Hathaway. Properties of peak health. Health is a big long-term growth trend. They are investing in life science and physician office properties and a smaller concentration in senior housing. Large growing market. The health sector will explode over the next decades.

Finally, and then I’m going to shut up and see what these guys think about them, Ryman Hospitality Properties. It is probably my favorite hotel company in the world. They own five huge hotels, all under the Gaylord brand. If you are a national person, you know the Ryman Auditorium where the company takes its name, the Grand Ole Opry, and the Ole Red restaurant chain which was opened in partnership with Blake Shelton. They own that too. Not a total real estate game there, in fact they have a catering business and the Gaylord, I believe everyone actually had an event at the Gaylord at some point.

Chokkavelu: Yes.

Withers: They did it.

Frankel: What do you think of all this? Are these really “OK boomer” stocks or are they appropriate retirement investments?

Withers: I guess when I looked at the financials for these, they work very differently than my tech stocks and my software stocks. They buy infrastructure, be it land, property, buildings, various places along. Then they use those physical assets and buildings and then make money. One of the things I look at when I look at businesses is that I want them to be more virtual. Businesses with more distribution or manufacturing centers or that need to have retail outlets to generate income are not things that interest me, and that’s exactly how these guys make money. , is not it ? They have buildings and that’s how they make money. But the one from Digital Realty piqued my interest a lot and it also ranked quite high in my scores.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.