AlphaMaven

Company Logo'

Hedge Fund

Serenity Alternative Investments Fund I

Back

Hedge Fund

Serenity Alternative Investments Blog -    Re-Thinking Real Estate: Fake News And Distress In The REIT Market

October 2020

posted by Serenity Alternative Investments Fund I
4yrs ago 226

Serenity Alternative Investments Blog -  Re-Thinking Real Estate: Fake News And Distress In The REIT Market


  • PERFORMANCE – Serenity Alternatives Fund I returned -2.49% in September bringing YTD returns to +2.4%. The FTSE NAREIT All Equity REITs index returned -2.67% bringing YTD returns to -12.3%.
  • DISTRESS!!! – Investors looking for deeply discounted commercial real estate can find it in the REIT market. And buy it immediately with almost 0 frictional cost.
  • FAKE NEWS – The categorization of REITs as defensive investments is a myth. REIT returns trounce private market returns early in recoveries, making them prime investments early in the cycle.


“To know that we know what we know, and to know that we do not know what we do not know, that is true knowledge.”


– Nicolaus Copernicus


How many times did you have to read that quote? In between all the knows and the do not knows, there is some beautiful ancient wisdom. Being confident in your knowledge and yet humble in your approach goes a long way in investing. There is always more to know, the landscape is infinitely complex, and there are always things to learn that can improve your perspective.


And who better to remind us of the importance of the limits of our knowledge than a 15th-century cosmology loving mathematician heretic. Seriously…Copernicus existed at the edge of scientific knowledge and brutally entrenched perceived wisdom.


In that spirit, it’s worth examining our assumptions regarding today’s commercial real estate market. Is our current knowledge rooted in data and observation, or gut feeling and intuition? Are cheap assets abundant and easy to buy, or does it just feel like they should be?


I cannot quantify the variety nor magnitude of available “deals” in the private market, but I can quantify and present some incredible opportunities in the REIT market. REIT deals exist, and they can be accessed without enduring a long competitive bidding process that may or may not result in a deal being consummated. If you are looking for real estate deals are you examining the REITs? I’ll bet Copernicus would.


Similarly, the REIT market as a whole is worth re-considering in light of perceived wisdom. Many investors view REITs as a defensive investment, but REITs actually produce their best returns EARLY in the business cycle. History shows that REIT portfolios recover from recessions much more quickly than private real estate assets due to their high location quality and the opportunistic nature of their management teams. So while REIT valuations may be very attractive currently, these deals might not be around for long…


To see the entire post click here.


ALL ALPHAMAVEN CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. CONTENT POSTED BY MEMBERS DOES NOT NECESSARILY REFLECT THE OPINION OR BELIEFS OF ALPHAMAVEN AND HAS NOT ALWAYS BEEN INDEPENDENTLY VERIFIED BY ALPHAMAVEN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THIS IS NOT A SOLICITATION FOR INVESTMENT. THE MATERIAL PROVIDED HEREIN IS FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY INTERESTS OF ANY FUND OR ANY OTHER SECURITIES. ANY SUCH OFFERINGS CAN BE MADE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE INVESTMENT'S PRIVATE PLACEMENT MEMORANDUM. PRIOR TO INVESTING, INVESTORS ARE STRONGLY URGED TO REVIEW CAREFULLY THE PRIVATE PLACEMENT MEMORANDUM (INCLUDING THE RISK FACTORS DESCRIBED THEREIN), THE LIMITED PARTNERSHIP AGREEMENT AND THE SUBSCRIPTION DOCUMENTS, TO ASK SUCH QUESTIONS OF THE INVESTMENT MANAGER AS THEY DEEM APPROPRIATE, AND TO DISCUSS ANY PROSPECTIVE INVESTMENT IN THE FUND WITH THEIR LEGAL AND TAX ADVISERS IN ORDER TO MAKE AN INDEPENDENT DETERMINATION OF THE SUITABILITY AND CONSEQUENCES OF AN INVESTMENT.
Not a member yet?

Join AlphaMaven

The Premier Alternative Investment
Research and Due Diligence Platform for Investors

Free Membership for Qualified Investors and Industry Participants
  • Easily Customize Content to Match Your Investment Preferences
  • Breaking News 24/7/365
  • Daily Newsletter & Indices
  • Alternative Investment Listings & LeaderBoards
  • Industry Research, Due Diligence, Videos, Webinars, Events, Press Releases, Market Commentary, Newsletters, Fact Sheets, Presentations, Investment Mandates, Video PitchBooks & More!
  • Company Directory
  • Contact Directory
  • Member Posts & Publications
  • Alpha University Video Series to Expand Investor Knowledge
  • AUM Accelerator Program (designed for investment managers)
  • Over 450K+ Industry Headlines, Posts and Updates
ALL ALPHAMAVEN CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. CONTENT POSTED BY MEMBERS DOES NOT NECESSARILY REFLECT THE OPINION OR BELIEFS OF ALPHAMAVEN AND HAS NOT ALWAYS BEEN INDEPENDENTLY VERIFIED BY ALPHAMAVEN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THIS IS NOT A SOLICITATION FOR INVESTMENT. THE MATERIAL PROVIDED HEREIN IS FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY INTERESTS OF ANY FUND OR ANY OTHER SECURITIES. ANY SUCH OFFERINGS CAN BE MADE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE INVESTMENT'S PRIVATE PLACEMENT MEMORANDUM. PRIOR TO INVESTING, INVESTORS ARE STRONGLY URGED TO REVIEW CAREFULLY THE PRIVATE PLACEMENT MEMORANDUM (INCLUDING THE RISK FACTORS DESCRIBED THEREIN), THE LIMITED PARTNERSHIP AGREEMENT AND THE SUBSCRIPTION DOCUMENTS, TO ASK SUCH QUESTIONS OF THE INVESTMENT MANAGER AS THEY DEEM APPROPRIATE, AND TO DISCUSS ANY PROSPECTIVE INVESTMENT IN THE FUND WITH THEIR LEGAL AND TAX ADVISERS IN ORDER TO MAKE AN INDEPENDENT DETERMINATION OF THE SUITABILITY AND CONSEQUENCES OF AN INVESTMENT.