I was having dinner with my wife yesterday, and the conversation drifted to the shifting of her office to a new location – her boss is currently sourcing for a bigger place.
Well, one can never guess when precious little nuggets of information will fall into your lap!
A Tale Of Different REITs
Her present office is in an industrial building managed by a REIT. Let’s call it A*REIT (I’ll leave it to you to guess which one), and she commented that many tenants have shifted out since the end of 2015, and the empty units are not filling up with new tenants. A sign of times, perhaps?
Her boss visited three separate units.
The first unit had everything they wanted, in terms of price, location and size etc. Not sure if it is a REIT-owned building, but the manager they spoke too was too inflexible with regards to certain terms and conditions so the deal fell through. Aren’t a good manager really important?
The second one is managed by a REIT as well – let’s use M*REIT this time. Decent location, and the manager was a great person to talk. Price psf. was comparable to their current office, and the manager was even prepared to make certain concessions to clinch the deal in consideration of the current economic climate.
The third unit was managed by A*REIT with similar traits to the previous unit. But, the rental is three times that of M*REIT. Erm, did someone lose touch with the the world?
Once again, my view is cemented that that the single most important factor is for a REIT to have a capable manager, regardless of the type of REIT and the economic/investment climate. A capable manager would at least be able to steer the REIT in the right direction.
More Than Just Analysis
Sometimes, we can analyze the heck out of annual reports, numbers, figures and charts but there is nothing quite like walking the ground to see what is really happening. Of course, you can’t do it with many businesses. On the other hand, some businesses are far easier to understand and access than others.
For example, a retail REIT is almost entirely transparent to the naked eye. Walk into the mall you own and it is pretty obvious whether they are doing well, or not. How has it improved over the years? Has it managed to turn disadvantages into advantages? These are obvious clues that you can use to aid in your investment thinking process, it would be such a waste not to make good use of them.
Good Times Ahead?
One could almost hear the collective sigh of relief from many investors this week as the STI climbed past 2,800 points for a strong finish this week. I’m happy for you guys who can finally have a good sleep with perhaps something positive to look forward to. Your portfolio value might have recovered a little bit from the carnage?
Secretly, I’m silently screaming to myself – “Noooooooooooooooooooooo!”
Is the stock market sale ending?! But, but, but I haven’t bought enough yet! Please halt the climb!
All in all, I’m doing pretty OK. I have mentioned previously that my STI ETF purchase prices over the past few months were “interesting”- 3.40, 3.43, 3.46, 3.33, 3.07, 2.81, 3.05, 2.92, 2.95, 2.72, 2.63 and 2.65.
The ETF portion of my portfolio actually broke even like maybe, two days back. Yeah, as if it is really important to me. I have nothing to gain from the rising indexes in the short-term, and would very much prefer if they stay at depressed prices to that I can buy them on the cheap. I guess that’s not something anyone can control.
As I have mentioned before, we are talking about real people with real lives, and we will never know their individual circumstances. If your situation is such that you are happy about the stock market rally (nearing retirement perhaps?), good for you then. Have a good sleep, and good night.