Artis Real Estate Investment Pref Shs Series E T.AX.PR.E

The proverbial backseat message

[DZtrader]

I'm in the "backseat" of a nice Camry Hybrid gliding through the country side of Thailand en route to Pattaya. I've got several hours so thought I would drop a note.

Firstly, I recognize it's a bit disheartening to see what seems to be relentless pressure on Reits of late, I get it, in particular in light of back to back oversized cuts. It's at times like this we have to be reminded that these are investments in wealth building and not trading vehicles per say. I noted a short while back that I believe we will start to decouple from our Fed dependency and I think we will. Inevitably these CAD cuts, if nothing else, will start to show up on the balance sheets of these reits and fundamentally strengthen internals and navs .

The market right now is fixated on growth stocks (tech/ mag7+). It is also unclear on Trumpet policy and the impact that will have on inflation thus yeilds. As we still have dependency on Fed and long term yeilds combined with the insatiable appetite for growth through all things AI, our beloved old school Reit sector will remain firmly in the backseat here with me! 

I'll try not and be too big of a cheerleader here but if you just apply common sense to this whole scenario it's hard not to be bullish these CAD reits, even (or particularly) in the face of pressure. Unless you think Reits will stay down forever how do you NOT keep accumulating here. At the risk of sounding over dramatic, you could be building generational wealth here. I like growth but for me these yeilds with solid asset backing with depressed valuations coming into the backdrop of perpetually lower rates is just no brainer gifts.........But, you have to have patience and foresight and enjoy getting paid handsomely while you wait. You already saw the reaction the sector saw when it anticipated a prolonged cutting cycle. It most definitely will happen again although it is possible it comes as a slow grind higher. Either way, the outcome is the same. Seems like taking candy from a baby.........and to think there are those who cry like a baby in the face of all this prolonged opportunity. Go figure.

Stay good,

DZ