URGENT: Will REITs Crash in a Recession?

Image sources: NAREIT, YCHARTS, EPRA, Canva

Important Disclaimer: I am long the REITs mentioned in this video. This video is impersonal and does not provide individualized advice or recommendations for any specific person. Viewers/readers should not make any investment decision without conducting their own due diligence and consulting their financial advisor about their specific situation. This video is for entertainment purposes only and you are responsible for your own investment decisions. The information is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The opinions expressed are those of the publisher and are subject to change without notice. This YouTube channel is managed by Leonberg Research OÜ, a subsidiary of Leonberg Capital OÜ.

#reits #dividend #passiveincome

[askjussi]

Let me know if you have any other questions about REITs and I will film a video for you!
Thanks for all your support! All your "likes" are making a big difference and I appreciate it.

[theodoroseidler]

I understand REITs pretty much as a long duration TIP bond as they behave similarly. When interest rates are up, the stock value is down and that is a share accumulation phase. Than the interest rates hit a plateau, which tends to be followed by recession (such as now). If the stock prices plummet, it is time to sell hard assets (gold, silver, etc) and buy stocks at pennies on the dollar, including REITs, so the share accumulation increases. The FED comes to the rescue and lowers interest rates, the stock market precedes reality in 6 months, so it tends to recover prices 6 months before the recession is over. That recovery period is also part os the share accumulation phase. Then interest rates reach rock bottom and a new expansion phase begins. There you see stock prices soaring and valuation will tell you when the share accumulation is over and when buying those hard assets again is a good idea. Stagflation does not change that dynamic much. Just prolongs the share accumulation phase and postpones sustained expansion.

[sagig]

One of your best videos Jussi! What a great channel man.

[Hmmmm]

Your videos are really helpful, thank you!

[davidwysocki]

Thanks, Jussi, for your excellent presentation on this subject. Good stuff!

[RichardAgain]

I have a question for you: I often read that reits are required to pay out at least 90% of their income to keep their reit status. However a lot of reits have a payout ratio of around 75%. What is the 90% requirement based on?

[christopherm]

I agree the title looks a little exaggerated but the content is still interesting and valuable! :)

[LQVendorFP]

thanks. The REITS will correct (further) first, with a recession driven market downdraft. Then will be the time to increase allocation to the highest quality securities in this sector

[jdgthe]

Hi! Thanks for the great video! Do you recommend companies like Roots and GroundFloor to get exposure to REITs? Thanks again!

[TheDGICrab]

REITs are certainly undervalued right now. Buying O, AMT and MAA in my Roth. Recently started a position in ARE also. I think these positions with DRIP will rebound and pay tax free dividends. Retirement me will be happy.

[lucterbogt]

Hey Jussi, great video!

Question for the Q/A endeavor: how do you assess debt in reits?

I understand that increasing liabilities &equity/share dilution are more frequent in reits sectors, but i still have a hard time understanding what is considered a "good balance" sheet /debt profile in Reits.

This is especially the case in reits in which i see debt mounting up but affo per share is growing substantially too. These are quite confusing to me as i see it AND a bad thing.

Love the channel as always!

[robbierenteria]

Can you do a video on REITs that pay monthly dividends?

[Rolanibrah]

Hi Jesse, quick question.
Looking at REITs, I find it concerning that in the 2008 recession they dropped a tremendous amount.

What are the chances that they drop again if a recession happened today?

In other words, are REITs better financially positioned than they were in 2008?
The REIT I'm asking about is PLD

[ivankabalin]

Whats happening with PAX? Do you think q2, 3, 4 will be rebound from current value? I keep adding but looking for some additional reafirming info.

[MartinD]

Great analysis. I think this video should be part of an introduction to all new RE investors. It gives far reaching insight into the long term REIT strategy.

[ljragsandfeathers]

Jussi, what’s happening with PAX? Thx for your great content

[whitevanman]

I have recently upped the REITs in my portfolio from 20% to 24% and I am going to buy more. I am thinking of making it 30%.

[sayaksamanta]

I have a question, what about data centre REIT like Equinix(EQIX) & Digital Reality
Can we consider them in our
Beacuse after AI Boom, Data centre will be the future

[chikeungchau]

Hi Jussi, thanks for sharing
I wonder would highly debted reits outperform reits with low gearing such as NLCP in response to rate cutting？
Thanks again

[amirsal]

Hi there

Would you recommend buying REIT ETfs? If so any good one you could recommend ?