Hedge Fund
Serenity Alternative Investments Blog - REITS And The Cycle – A Road Map For Re-Positioning Your Real-Estate Portfolio
Serenity Alternative Investments Blog - REITS and the Cycle – A Road Map For Re-Positioning Your Real-Estate Portfolio
With 200+ companies, invested in over 19 different property types, the publicly traded REIT market offers investors the opportunity to tilt their real estate exposure in countless different directions
- As the cycle has matured and growth has slowed from recent peaks, it’s been important to avoid cyclical REITS, and embrace bond-like REITs
- For investors looking to lower portfolio risk this late in the cycle, high quality REITS with strong balance sheets offer a compelling portfolio allocation
You don’t have to look too far in the financial press to find an article about how we are “late in the cycle.” It’s common knowledge that the economic recovery is long in the tooth, as we pass the 10-year mark since the depths of the last recession. But how does that knowledge help us as real estate investors? How are investors supposed to change behavior knowing that the cycle is very mature?
In many cases, unfortunately, real estate investors have limited options. Selling assets can trigger tax events and sitting in cash is not what most clients want from their managers. With high quality assets commanding premium valuations, how can real estate investors add protection to their portfolio if they think the cycle is closer to its end than it’s beginning?
One answer lies in the publicly traded real estate market. Real estate investment trusts, or REITs offer a myriad of different ways in which real estate investors can maintain real estate exposure while protecting their downside. While the REIT market is complex, for savvy investors it represents an opportunity to enhance their returns as we enter the last phases of the cycle.
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