**HYL Webinar Q3 2026 — Transcript & Summary | SozAI**
Source: https://sozai.app/transcript/hyl-webinar-q3-2026/

Jussi Askola discusses interest rates, REIT investment strategies, and sector outlooks in the Q3 2026 HYL webinar.

## Key Takeaways

- Recent interest rate hikes are viewed as temporary shocks, not altering the long-term investment thesis for REITs.
- Faster rent growth is anticipated starting in 2027, creating strong upside potential for REIT investors.
- Investors should prioritize REITs with strong balance sheets to mitigate risks from interest rate volatility.
- Realty Income presents a unique opportunity due to its data center exposure and asset management expansion.
- Diversification and cautious capital allocation remain essential in the current uncertain economic environment.

## What the video covers

- The webinar covers the impact of recent Fed interest rate hikes and their temporary nature due to geopolitical inflation shocks.
- Jussi maintains a long-term bullish outlook on REITs despite short-term volatility and rising rates.
- He highlights the expected acceleration of rent growth from 2027 onwards due to limited new supply and market dynamics.
- The discussion includes a focus on REITs with strong balance sheets as safer investments in the current environment.
- Realty Income is considered a promising REIT due to its expansion into data centers and asset management business.
- Essential Properties Realty Trust (EPRT) is revisited as an attractive investment opportunity following valuation dips.
- The webinar addresses risks in net lease REITs and the importance of diversification in volatile markets.
- Jussi emphasizes the influence of macroeconomic factors like aging populations, technological innovation, and inflation trends on interest rates.
- The session encourages live interaction and questions from participants to foster a conversational atmosphere.
- Overall, the webinar provides strategic insights into navigating REIT investments amid changing economic conditions.

## Chapters

1. 00:00 Introduction and Webinar Overview
2. 04:15 Interest Rates and Inflation Outlook
3. 08:07 REIT Market Conditions and Rent Growth
4. 12:07 Risks in Net Lease REITs and Market Valuations
5. 16:07 Supply Constraints and Development Trends
6. 19:39 Investment Strategy and Portfolio Considerations
7. 23:59 Realty Income and Data Center Expansion
8. 29:26 Essential Properties Realty Trust and Valuation
9. 35:01 Q&A and Closing Remarks

Answers

## Questions about this video

How does Jussi Askola view the recent interest rate hikes?

He considers the recent Fed rate hikes a temporary response to geopolitical inflation shocks and does not believe they will change the long-term outlook for interest rates or REIT investments.

Why is Realty Income of particular interest in this webinar?

Realty Income is attractive due to its expansion into data centers and asset management, offering high initial yields and potential for lucrative fee income, making it suitable for retirement portfolios.

What is the expected trend for rent growth according to the webinar?

Jussi expects a multi-year period of accelerated rent growth starting in 2027, driven by limited new supply and sustained high interest rates, which will benefit REIT investors.

## Full Transcript — Download SRT & Markdown

00:00

Speaker A

Okay, I'll slowly get started. Thank you very much to all of you for joining this live webinar. It's our fifth one already, and they've all been very exciting. Um, the idea here is to just have a conversation. So please, I need you to

00:17

Speaker A

help me here and type some questions in the chat. Again, you click on chat. It's, uh, in the middle left, uh, of your screen Zoom window. It will open a separate window. You can type your question. I see that Mike already put

00:33

Speaker A

the first question there, which is great. Please keep typing more of them. There's no bad question.

00:38

Speaker A

Before getting to those questions in the chat of the live Zoom call, I'm going to answer some questions that were submitted to me by members who are not able to join us live. I'll go through those quickly and then I'll get to the

00:49

Speaker A

again to the chat. So, please type questions. Um, the first question that we have is concerning interest rates, and that's a question that a lot of you have been asking about. It's, uh, you know, the Fed just hiked interest rates. Does it

01:03

Speaker A

change my view on rates? And obviously, it's an important factor. It does enter our consideration as we analyze various rates. But ultimately, it does not materially change my investment thesis for most of our REIT holdings. And the reason why simply that

01:22

Speaker A

I think that this recent surge in interest rates is likely to be temporary because you need to, you know, consider why did the Fed hike interest rates? Why a long-term treasury is now rising, and it's mostly because inflation is surging

01:35

Speaker A

as a result of the war in Iran and its recent escalation. I don't think that this is going to permanently change the long-term outlook for inflation or interest rates. I think that this is a temporary shock. It's leading to an energy spike. It's leading

01:49

Speaker A

to higher inflation in the near term, and so it's forcing the Fed's hand. It had to hike interest rates, and obviously it has to take this seriously. We are likely to see another rate hike or even two still this year. But, you know, eventually I

02:02

Speaker A

expect this war to come to an end. Energy prices to come down or simply energy prices will come down even regardless of the war at some point. Uh, at these prices, it's very profitable to drill. We'll have higher production.

02:17

Speaker A

Consumers, businesses will even adapt their consumption. And so, you know, energy markets have their way of resolving, um, high prices by themselves naturally over time. And, you know, if you look at inflation, before the war, it was at

02:35

Speaker A

right around 1 to 2% in real time according to true inflation. And a lot of us, including the debt market, were expecting rate cuts by the summer of 2027. Um, that was the talk back then, and there were major

02:50

Speaker A

disinflationary forces in the economy which have been pushing interest rates lower for half a century, and those are the rapidly aging population, the slowing population growth, the growing wealth inequalities which are becoming rather extreme, the excessive leverage in our

03:07

Speaker A

economy and just not worldwide really, and technological innovations and partially the AI revolution. And, you know, those same inflationary factors have been pushing inflation lower and interest rates lower for half a century, and today they remain as strong as ever

03:23

Speaker A

and, and so again, I think that this is a temporary shock. It's leading to higher inflation, higher interest rates, but doesn't change my long-term outlook. And so because of that, now that we get lower prices, I'm, uh, I'm inclined to buy the

03:37

Speaker A

dips as you've seen through our numerous trade alerts. And beyond that, there's another reason why I'm especially bullish on REITs following this recent dip, and it's, but I think that we're on the cusp of faster rent growth. You

03:49

Speaker A

know, 2023 to 2026 was a tough period for a lot of property sectors because we had a lot of new supply hit the market as a result of the low interest rate policies that followed the pandemic. And so the last three years we

04:04

Speaker A

haven't seen too much rent growth in many property sectors like apartment communities but also in industrial. Uh, but, but now I think that this rent growth is about to accelerate going into 2027.

04:15

Speaker A

And I think that we'll have a multi-year period of faster rent growth. And the longer interest rates remain high, the longer this period of fast rent growth will be. And so when you combine the faster rent growth with

04:27

Speaker A

eventually a return to lower interest rates, I think you have a very powerful combination for upside, especially from today's valuation. So overall, again, it doesn't change my long-term outlook for rates. It does still have an influence, obviously, now

04:40

Speaker A

that we have interest rates rising. We have in general more uncertainty, more volatility in interest rates. You want to be more conservative and perhaps focus a bit more on those REITs that have particularly strong balance sheets because in many cases they've actually

04:53

Speaker A

dropped just as much as the more heavily leveraged REITs. A good example is Camden Property Trust, which has an A-minus rated balance sheet, has dropped as much as BSRE, which has a lot more leverage. So given the environment we're

05:05

Speaker A

in, I would rather pour more capital to Camden at this time. So it does influence, again, my decision making, but, uh, it doesn't change my long-term investment thesis for investing heavily in REITs. Second question that I received is concerning Realty Income.

05:18

Speaker A

Someone is asking why we're not investing in it. It's now yielding about 6%. It has an A credit rating. Um, it would seem like a perfect REIT for our retirement portfolio, and I agree that it's something worth considering. It's very high on our watch

05:35

Speaker A

list right now, especially following my recent meeting with the CEO of the company in Milan at the REIT conference.

05:42

Speaker A

You know, the new angle that's making me very interested in Realty Income is the expansion into data centers coupled with their move into the asset management business. And I think what's interesting about Realty Income is that, you know, there's massive capital

05:57

Speaker A

needs for data centers. It goes in the trillions over the coming years. Yet there are very few capital providers of scale that can really aggressively move into this space without creating concentration issues in their portfolio because a single data center deal can run

06:11

Speaker A

in the billions. And so if your portfolio is as big as Realty Income, you can afford to take this risk. Uh, your portfolio won't have any concentration issues. But a smaller Realty REIT cannot do that. Um, and a lot of these deals are

06:24

Speaker A

ultimately structured as triple net lease deals, and Realty Income is the leader in this space. Um, the initial yields are quite attractive. So are the rent escalators, and especially if Realty Income can combine that with an asset management model with a

06:38

Speaker A

co-investment and earn fee income, it can be very lucrative for them, and I think they could do a lot of these deals in the near term. Uh, that's the feeling I got from my discussion with the CEO of the

06:48

Speaker A

company, and so in a way, I see, I could see Realty Income as, you know, a way to gain indirect and growing exposure to data centers with a very high initial yield. The dividend yield is 6%. It's paid monthly, and so it could be an

07:02

Speaker A

attractive way for our retirement portfolio to gain a bit more exposure to this space with a high yield and a very strong balance sheet, um, you know, with Realty Income. So I am interested. I expect to share more about it in the

07:14

Speaker A

near term. Then I have a question about EPRT. Do we have interest in getting back into Essential Properties Realty Trust, which was once our biggest holding in our core portfolio? And again, I am getting more and more interested,

07:28

Speaker A

obviously following its dip. It has dropped just like every other REIT, especially net lease REITs which have long duration assets, and it's now finally trading at actually one of the lower valuations in the net lease space, which is unusual. In the past years,

07:42

Speaker A

it has typically traded towards the higher end of the net lease peer group. Um, the only reason why we haven't i

07:55

Speaker A

It's one of their biggest uh segments in their in their portfolio and you know there's many operators in this business line that have faced difficulties. Some have defaulted on their on their leases.

08:07

Speaker A

Some have gone bankrupt. Some are reported to be border bordering bankruptcy. And you know ultimately this is a riskier asset type in the net list market. It's a low barrier to entry very easily replicable by competitors if a

08:23

Speaker A

particular property is is profitable and uh and so I'm trying to get more uh you know insights into how the those properties particularly from essential properties trust are performing and I hope to get more color on this in the

08:38

Speaker A

next earnings call. But if I can feel comfortable with their car wash exposure, I would expect to initiate a position in it at these levels for a core portfolio because it's become very attractive again. And obviously it's higher it's lower

08:52

Speaker A

earnings multiple is increasing its cost of equity but the great which then reduces the spread on it new investments. But the great thing is that it has preunded a lot of its acquisition volume already for for the coming

09:04

Speaker A

quarters and it has low leverage. So it's in a in a very good position to keep on growing otherwise as long as it doesn't suffer any setbacks with its car wash portfolio.

09:15

Speaker A

Then next question is on Agra realy corporation. Why what is pushing it down? And again it's simply interest rates. Uh there's no news on the company that's negative. The company is doing really well. Uh I met their CEO also in

09:29

Speaker A

person the earlier this year at their headquarters in Michigan. um and um and also met them later in the in the summer also in New York at the the NA read conference and they were very optimistic about the near-term future because

09:46

Speaker A

they've preunded just like EPRT a significant portion of their equity needs uh for their for their for the acquisition volumes. They have a very active pipeline. They're getting nice spreads over the cost of capital. So the business is really doing really well.

09:59

Speaker A

It's growing at a good pace but you know it's it has dropped as capital simply rotated from rates into fixed income following the surge in interest rates and that has pushed rates down on average I think about 12% by now and

10:13

Speaker A

some of these higher duration rates like agri realy have dropped a bit more than that even myself I bought the dip already in agri realy and if it keeps dipping I will continue to buy more of it for the reasons that I just discussed

10:24

Speaker A

I think that this is going to be a temporary spike in interest rates most likely But even if it isn't, the nice thing is that you have significant margin of safety here. The rate is offering a roughly 5% dividend yield. It's expected

10:37

Speaker A

to grow meat to high single digit. It has a very strong balance sheet, very low leverage. LTV is about 25%. So there's no major impact from the rising interest expense. Uh so ultimately even if rates were to remain higher for

10:49

Speaker A

longer, I would expect good returns over the long run from a rate like every realy. Um and I think the riskreward is particularly attractive coming from such a defensive rate. Uh and then you have the upside optionality in case interest

11:01

Speaker A

rates go return lower as I expect. Then someone asked about the whether I've considered selling cash secured puts and covered calls and yes I have and I think that those can be attractive strategies to earn additional income and in the

11:17

Speaker A

case of cash secured puts to perhaps secure an even greater margin of safety because if the shares don't get put to you you you have an even lower cost basis. But the reason why I'm not doing much of that today and haven't done some

11:29

Speaker A

in recent years is because we've been in a rate bare market and this multi-year bare market has push rate valuations to historically low levels and when valuations are low I would rather enter my equity investment right away rather

11:44

Speaker A

than risk you know selling a put just to earn a premium and then maybe I don't get the shares put to me if they recover by then uh and then I will miss out on the upside and ultimately earn quite a

11:54

Speaker A

bit worse. returns and same for for covered calls. I would rather not sell those calls because I don't want to risk uh losing my shares in a recovery which could happen any time. Obviously, it's impossible to predict when this recovery

12:07

Speaker A

could happen. This bare market could last another three years or or it could end tomorrow. uh but uh but for these reasons because I cannot time the market but valuations are very attractive for a long-term oriented investor or much

12:21

Speaker A

rather initiate my positions today directly and not play too much with these options. Okay, I only have a few more questions and then I'll get to the live chat. An update on cyber cybernics and this is our European retlike entity

12:37

Speaker A

that's focusing primarily on grocery stores in Northern Europe. um and it has dropped quite a bit lately along with most other REITs and especially European REITs that have a lot of leverage and that's the reason why it's dropping. It

12:50

Speaker A

has a lot of leverage and interest rates are rising in Europe. Um but you know again because I think that this is likely to be a temporary issue. It's not something that concerns me too much.

13:03

Speaker A

What I like about Cyber as well is that it's protected in a way in that it has CPI based rent escalations in its leases. So we're getting higher inflation. This is leading to faster rent growth as well. So you're not only

13:14

Speaker A

getting higher interest expense, you're also getting faster rent growth. Um I think that at these levels it's quite attractive to buy the dips. The discount to NAV is getting significant. The dividend yield is approaching 9% I believe. Um again it's on the higher

13:27

Speaker A

risk side because of the leverage. But if you can be comfortable with that leverage, I think it's quite attractive at these levels.

13:34

Speaker A

Then someone asked for an update on Talina Sadam which is our portland investment in Estonia and um I have a very long update coming on this company that I'm excited to share with the members of Kay Landlord. I've worked on

13:49

Speaker A

it a lot. I just a week ago had a meeting with one of the leading private equity real estate investment firms in Talin Estonia to discuss specifically Tal Sadam and their land holdings. uh and I so I have some interesting stuff

14:02

Speaker A

to share in the near term but to keep it very short I think that the value of its land surrounding the port has grown very significantly and we now have a very clear comp to you know look into there

14:15

Speaker A

is a project called Talzini that's right next to the land of Talina Saddam and there they are selling apartments for 10k square meter and that's a lot more than what we were underwriting a couple years ago when we entered our investment

14:29

Speaker A

and so it shows that these prime sites in Talin have really gained a lot of value and this is obviously very bullish for the long-term long-term thesis for Talina Saddam which has unfortunately suffered a series of black swans with

14:42

Speaker A

first the pandemic then the invasion of Ukraine um the surge in interest rates all of this has caused its business to to suffer but quietly in the background its land holdings have gained significant value and um I will discuss

14:57

Speaker A

that with with some calculations more detailed calculations on what this land could be worth in our coming report which I expect to share later this month. So stay tuned for that.

15:10

Speaker A

Um two more questions and then I'll get to the live chat. First one is uh what do I think about European rates which are down significantly lately and um look like just like American rates I'm I'm very positive on them. I think that

15:26

Speaker A

adding to European reads could prove to be even a better idea than adding to American REITs today because they're down even more than American markets since since European European economies are more heavily exposed to this war in Iran and the surge in energy prices. But

15:42

Speaker A

again, if you think that this is not going to permanently change the outlook for inflation and interest rates, I think that this is an attractive bode opportunity. I mean right now you have rates like CR student housing which has guided to grow its FFO per

15:58

Speaker A

share and its dividend per share by 4% annual in 2026 2027 and yet because student housing is under supplied in Europe its rents are growing have grown by 5% so far this year and this strong rent growth is expected to

16:11

Speaker A

continue because there's simply no new supply. The the the rate has noted that has six students fighting for each bed in his portfolio. It has K has no vacancy and so rents are growing steadily. It has development projects

16:24

Speaker A

coming online in the near term. It has guided for steady growth and yet it's trading now at an over 40% discount to NAV and it's offering a near 8% dividend yield which again it has guided to grow by 4% annually going forward. It's

16:37

Speaker A

backed by a management team that's shareholder friendly that owns about 10% of the equity themselves. You know the deals are getting quite exceptional in Europe even more so than in the US in many cases.

16:49

Speaker A

What's the the catch? The catch obviously is that many of these rats have a bit more leverage than in the US and they are more exposed to this recent surge in interest rates. So, but if like me you think that this is likely to be a

17:00

Speaker A

temporary issue then I think that the risk war is very attractive and that's what I think it is and again even if it's not it's not the end of the world for read like C. They are not overleveraged by any means. Um,

17:13

Speaker A

so I would expect attractive returns over time regardless. Last question that we have here is concerning Branix. Do we have any interest in getting back to Branics? For context, we sold it a few months ago.

17:27

Speaker A

It's was one of our worst investments in recent years. U they just had too much leverage. They couldn't handle the surge in interest rates and uh that pushed them on the brinks of bankruptcy. we had uh growing, you know, uh indications

17:44

Speaker A

that the rate would likely have to restructure some of its debt because it wasn't fast enough in in selling assets to pay off debt maturities. And so we decided to ultimately cut our losses and sell the position at about I think it

17:56

Speaker A

was 1 20 cents or 10 cents around that level. And I'm happy we did despite having to lock in a big loss because since then it has dropped to I think now it's at 30 40 cents a share. So it has

18:09

Speaker A

dropped another two3 almost since we sold it. Um and uh you know if you look at it latest number they're not good at all and they they seems like they're not really making progress and again they are very unlucky with their timing. Now

18:24

Speaker A

the escalation of the war in Iran again more inflation higher interest rates creates more uncertainty on cap rates property value so transaction markets are frozen and this puts Bren in a situation where they're following the restructuring of their debt their their

18:40

Speaker A

lenders are going to be extracting most of the value if not all and and so unless we get clarity on what's happening in the energy markets and inflation I'm not going to be touching branics but if suddenly we get a very clear signal

18:55

Speaker A

that okay things are getting back under control. Interest rates are likely to drop back down. Um and yet the share price remains at these current levels then I could perhaps see myself entering a small speculative position uh because

19:07

Speaker A

the upside could be significant obviously but this is extremely speculative. Okay. So now I'll get to the questions on the live chat. Again as a reminder you know the goal is to have a conversation here. So, please take the

19:20

Speaker A

time to click on chat and type your question and I'll you can really ask me anything about my view on the markets on specific reads or anything and I'll get to you shortly. First question is coming from Mike. Can you comment on your

19:35

Speaker A

Canadian holdings guessing much in common with US names? So, so we own quite a few Canadian holdings in our international portfolio. These include Ryokan, Northu residential, uh Canadian Netrate, which is one of my favorite holdings overall, but also a few others. Dream Industrial

19:55

Speaker A

Vital Infrastructure. These are fairly small investments, but you know, I think they can be very attractive in that there are quite a few similarities between Canadian and American REIT markets. However, the Canadian markets are a lot less competitive in many

20:10

Speaker A

cases. there in each property sector there might be just a few rates compared whereas in the US there might be many more plus many private equity players also competing for deals and so as a result of this in Canada often cap rates

20:23

Speaker A

might be comparable to the US or even slightly higher yet interest rates in many cases might be lower and so they they have the ability to earn better spreads often in Canada than in the US and Canadian net rate is a perfect

20:35

Speaker A

example of that and this has allowed it to grow about three times faster than its American and net peers over the long run on a per share basis.

20:44

Speaker A

So I like Canadian names a lot. However, they today their valuations are not as heavily discounted as many other 400 markets and that's the main reason why we haven't poured too much more capital in them in recent month and we favored

21:00

Speaker A

European markets much more as an example. Then James is asking have I looked at vital infrastructure lately? looks like new management and the CEO has been buying a lot of stock looks like it sells for half of its NAP. Do you see

21:14

Speaker A

doing something to close the gap and is the dividend secure? So yes, obviously like we own a small position. It's a small one and I agree that this whole transformation is very positive. We have an update discussing on all of this that

21:29

Speaker A

you might have missed. Um but I can share it here on the chat with you. um or I'll I'll I'll um let me see where I can find it. Um I I'll I'll send it to you directly after this call. But you

21:47

Speaker A

know in short like the the problem that that they run into is that again they had too much leverage heading into this rate hiking cycle.

21:57

Speaker A

Uh the the management well I think got blamed a lot more than they deserved. I think that they got a bit unlucky with the timing of some of the investments. I think that, you know, there were a lot

22:08

Speaker A

of questions on their alignment of interest. Um, and this new management then came in and they've done a really good job at at trying to regain the trust of the market. And this was working. Their share price was already

22:18

Speaker A

surging, but now following what's happening in the RE market, it has given up some of those gains and and so I do think it's attractive to look at it as a potential new investment. its dividend yield while uh while high and attractive

22:31

Speaker A

it's at about 7% right now I believe it's it's not the safest you'll find in the REIT market it is currently well covered but the rate still has to do some work on its balance sheet deleveraging it has already made a lot

22:43

Speaker A

of progress but it's not quite there yet and its payout ratio is quite tight as well once you account for all the capex that they have um myself I'm waiting to get a bit more color on on the new tread trajectory of

22:58

Speaker A

the company, the new strategy of the new management before potentially doubling down and making it a larger position.

23:05

Speaker A

Then Steve Matthews is asking, "What will be three rates that are most heavily discounted relative to NAV that have below average leverage?" Um, okay.

23:17

Speaker A

So if we look at um at the US markets, Alexandria real estate comes to my mind first because it's extremely heavily discounted to its nav. It's about trading at I think less than half. But even with conservative assumptions, the

23:33

Speaker A

discount is is really big. Um and while the leverage has gone up following the decrease in its cash flow due to the over supply, it still has a strong investment grade rating. very long that maturity is mostly fixed rate debt. It

23:47

Speaker A

owns a lot of class A asset has good access to liquidity. So I wouldn't you know you know describe it as a distress rate by any means despite having uh you know this very very steep discount to have. Another name that comes to my mind

24:03

Speaker A

is Rayonir which is this Timberland RE trading at just above half of its net asset value. Um it has also triple B+ investment grade rating low leverage which makes it attractive.

24:17

Speaker A

You want a third one. Let me check what name I could present to you here. You know Camden Property Trust or UDR attractive names Vichi Properties also all of them you know there are quite a few names trading at very steep

24:31

Speaker A

discounts to NAV today of 30 plus% despite having strong investment grade ratings. Um those are the names that come first to my mind. But obviously I wouldn't buy RITs simply because of the ad trading at the discount you have. You need to also

24:45

Speaker A

have a path to unlocking it down the line and drawing this net asset value.

24:50

Speaker A

Um you know there's a lot of REITs that have persist persistently traded at large discounts for for many many years.

24:57

Speaker A

But these REITs have strong balance sheets friendly management teams class A assets and yet the discounts are quite steep.

25:05

Speaker A

Mike is asking what are your current favorite RE sectors. Um I just mentioned cure student housing. Student housing is doing really well in Europe. It's heavily under supplied. I like self storage also in Europe. And I think that again the

25:20

Speaker A

long-term outlook is very positive. There is very little supply per capita compared to most of the developed mature self- storage markets. The European market is still a new one. The concept is just now still growing in popularity.

25:33

Speaker A

the over supply of post-pandemic period normalization is now getting absorbed and I think that occupancy rates and rents will return to the growth over the coming years and yet valuations are extremely heavily discounted. If you look at shore guard or big yellow group

25:49

Speaker A

um industrial rats I think are very attractive in the US. If you look at Rex Ford or even East Group properties which is not as heavily discounted uh they they enjoy very attractive prospects I think over the coming years

26:02

Speaker A

especially as most new development projects have been put on hold as a result of the high interest rates and the high inflation in construction cost.

26:10

Speaker A

I like the residential sector. Um I don't think that it's going to be the most rewarding. the it's not going to be the sector with the fastest growth prospects, but I just like, you know, the the risk profile of it and the

26:22

Speaker A

riskreward, especially at this steep discount enough because ultimately we'll always need to have a roof over our head. It's not something that can be disrupted by technology or even a recession. You'll still need affordable housing will always remain in demand.

26:36

Speaker A

Um, and at at a 30 40% discount you have, I like the riskreward. Those are the first property sectors that come to my mind.

26:45

Speaker A

Um, Elizabeth says that we've heard temporary before and you're right. You're right. But, you know, another word that we've heard before is transitory. But, you know, it was transitory in the end. The the inflation following the pandemic as an example. It

27:03

Speaker A

did last longer than all of us expected. But, it was transitory. You know, we we had high inflation as we had lot of supply chain issues. a lot of money was printed and giving away in stimulus checks. This led to a surge in

27:16

Speaker A

inflation. But again, this was a temporary shock and it led to high inflation. It led to higher interest rates. And I think that what extended this period of f of higher inflation and higher interest rates was then the

27:29

Speaker A

invasion of Ukraine which led to further disruption and it extended this period and the temporary became a longer temporary but ultimately inflation came back down and real-time inflation before this war in Ukraine was at very low levels 1 to 2% and and in in 2024 the

27:47

Speaker A

Fed had started to cut interest rates quite aggressively. It had cut them several times. Um and this and so we were not clearly in a higher for longer environment and it was expected that these rate cuts will now continue going

28:00

Speaker A

into 2027 after a pause due to the the trade wars that were happening. Uh but this was now disrupted by this war in Iran. So again I I I understand the frustration and myself frustrated that this has lasted longer than it has. But

28:16

Speaker A

it's the reality. We had the pandemic then we had the war in in Iran. uh sorry in Ukraine and now we have the escalation of the war in the Middle East and this is causing I think this this

28:28

Speaker A

surge in inflation and interest rates. Um if you look at even now the the CPI X um oil X energy market it's still very low in the tools um it hasn't increased from here so it is very much driven by

28:44

Speaker A

this war and I don't think that this will last forever then Yonas is asking um a question on two European companies what is your opinion on Humborner REIT and CTP um and which is an industrial rate and u I like both rates both are

29:06

Speaker A

very heavily discounted the main reason why I'm not invest in a harborer rate is because I would rather invest in bonovia I prefer its riskreward because of its because of its scale because of its portfolio because of its staying power

29:18

Speaker A

because of its management as well which I trust more than that of horner but the discount to nav is enormous obviously and at this recent conference I attended in Milan in Europe it was a topic among that many people ha had

29:32

Speaker A

wanted to discuss because it is an interesting situation and I am monitoring it. I just haven't shared anything on it because ultimately but I always decided that I favored uh Vonovia uh for for this for for for German

29:48

Speaker A

exposure specifically. Then on CTP again I'm bullish. I like it. I've considered investing in it several times especially in the recent past but ultimately I decided to go with VGP instead. Um I had it was two of the rats

30:03

Speaker A

that I was looking at for potential industrial exposure CTP or BGP but end up going with VGP in big part because I think that they have much greater data center optionality and I like their their asset management business better. I think that they

30:19

Speaker A

potentially will have better growth prospect going forward. But again, bullish on both rates. Stephen is asking for my thoughts on Armor Residential. Should I keep or dump?

30:31

Speaker A

It's a tough one, you know, to answer because look, first I haven't followed it very closely because these are the exact type of rates that I don't like myself because uh you know, these are mortgage rates that are offering very

30:42

Speaker A

high yields, but typically if you look at their long-term total return performance, it's been very poor even before this multi-year read bear market.

30:49

Speaker A

And that's simply because their business models are extremely sensitive to even smaller movements in interest rates or spreads. They have a lot of leverage and and so their their business model can really they can small movements in these

31:03

Speaker A

macro factors can make or break their businesses and these are highly unpredictable and and we live in a very uncertain world and for this reason I'm really not a fan of reach like armor residential. To me, investing in them

31:14

Speaker A

feels like speculating, not really investing. And so, for that reason, I'm staying away from them despite their very attractive dividend yields.

31:22

Speaker A

Elizabeth is then asking for my outlook on HR realy trust. I got to meet their management team this summer in New York and you know, they have a new management, they have a new strategy, they I think they're doing the right

31:35

Speaker A

things. They sold their residential properties. They sold also their construction lending business in order to simplify the business to delever the balance sheet. This led [clears throat] to a dividend payout cut which obviously was not well received by the market.

31:48

Speaker A

Investors don't like it. But in the process they did demonstrate to the market that the assets are valued are worth far more than what the public market is giving them credit for. And they were willing to you know descale

32:01

Speaker A

the company in the benefit of shareholders because I think it will be in their benefit in the long term. And now I think that you know they've been using a lot of proceeds also to buy back shares which is great to see to get

32:12

Speaker A

their balance sheet back under control but ultimately this hasn't been enough to to rectify their their valuation to close the gap to their nav which I think is about two times higher than their share price. Obviously uh they are not

32:27

Speaker A

alone even high quality peers in the REIT market that's trading at very large discounts. So it's not surprising that HR realy will be as well. And I think that what the the like likely outcome here in my opinion from from having got

32:41

Speaker A

to talk with the management and again they didn't tell me this but this is why I think they are going to go is I think that they're going to keep now buying back shares. They're going to do their

32:52

Speaker A

best to keep unlocking this gap to NAV. And if that's not enough, I expect them to eventually sell either their office portfolio or their retail portfolio to become a pure play REIT and use those proceeds to either return them to

33:06

Speaker A

shareholders via buybacks or special dividends because you know the problem that I see in HR realy is that right now it's it's uh you know it's it's a diversified rate has a big retail portfolio, big office portfolio and the

33:20

Speaker A

rate market historically hasn't liked such reads that are not a pure play on a specific property sector. It wants REITs to be specialized in something specific and HR realy doesn't still have that today. And so I think that selling

33:34

Speaker A

either the office or the retail could help them close some of this gap and the management made it clear that they are not in love with the assets. And if if selling some big portions of it will help them close the gap, they will do

33:46

Speaker A

so. And they've already demonstrated that they are willing to do it. And I think they will do more of that over the coming years which could help them close the gap to NAVA. In the meantime, you're obviously earning a high dividend yield

33:55

Speaker A

and the assets are doing well. They're same property NOI keeps on growing at a solid pace.

34:01

Speaker A

So, higher risk peak, higher leverage, there is some execution risk, but I think you're getting quite well rewarded for it. And for that reason, I've kept holding it and I've accumulated more of it to average down my cost basis. Then

34:14

Speaker A

Paul, hey Paul is asking, why did you think there will be faster rent growth?

34:19

Speaker A

uh limited income growth seems to be limiting tenants ability to pay, isn't it? Well, you know, if you look at at the at the last three years or so, specifically now for apartments, rents have been more or less stable. They've

34:34

Speaker A

stagnated or even slightly declined even as we've had high inflation in the rest of our economy. Most most other goods and services have gone up in price significantly. So, and so have salaries in many cases. So as a percentage the

34:48

Speaker A

rent as a percentage of household incomes have many cases gone down quite a bit in recent years and this was because we had over supply you know in the post when when the at the start of the pandemic interest rates were cut

35:00

Speaker A

down to near 0%. They stayed there for quite a while and as a result it was very easy for developers to pencil out new projects. You could just put in your model a very low exit cap rate. you'll

35:11

Speaker A

have very low borrowing cost and there was a lot of demand for income income producing properties given that bonds and treasuries were not yielding much at all. And so this led to a huge wave of new supply and rates were dealing with

35:24

Speaker A

the aftermath of that still in 2023, 2024, 2025 and even 2026. But this then got corrected obviously with the surge in interest rate, the surge in property, construction cost suddenly became a lot more difficult for developers to justify new projects

35:39

Speaker A

because it simply became unprofitable to build. In many case, you'll build a property and construction cost will be a lot more than its its market value. So simply wasn't economical anymore. And so now we've had very low new supply for

35:51

Speaker A

already a few years. Um and so I think that because of this, you know, we're going to go into a much better environment with much less new supply in the coming years and this will re give pricing power back to the landlords

36:04

Speaker A

especially for those landlords that own in demand properties, affordable housing and growing attractive markets. I think that Camden fits that description really well. And in the latest at at a recent conference uh the co of Camden said specifically he said he was asked do you

36:22

Speaker A

expect same property noi growth to be stronger in 2027 and he said yes uh he didn't quantify it but he he was very clear that this is going to happen simply because there's much less supply pressure.

36:34

Speaker A

Then Arthur is asking for my opinion on coal storage read and I'm sorry Arthur but uh I'm really I've tried to get better informed on coal storage but this property sector still somehow feels too complicated and uncertain for me. It's u

36:50

Speaker A

I I feel like my opinion wouldn't be well informed. There are a lot of factors that make this uh property sector simply too complicated for me.

36:58

Speaker A

Uh, and so I've u yeah that has I've stopped it there for this reason.

37:06

Speaker A

Christian is asking can you explain why you prefer better thanite group from the UK is because you see more risk in the UK. Well, it is one of the reasons I it's not that I'm not bullish on onite.

37:20

Speaker A

I actually I am as well. I think it's a it's a it's a great read and it's trading at a low valuation and just like is benefiting from under supply unites as well but the reason why prefer again

37:33

Speaker A

I think it's in big part because it's better diversified across Europe and I prefer that I think it makes it riskreward superior it's not dependent on one specific market I also like that its management has a very significant

37:48

Speaker A

skin in the game they have an amazing track record of growing on a per share basis. They put very clear emphasis on growing on a per share basis. But again, I like both names. I just slightly prefer for those two reasons.

38:01

Speaker A

Then Bill is asking, why do you feel that interest rates will decline? French, US, and other debt levels are high and there does not seem any way to get out of it. Well, you're right that debt levels are high, but you know,

38:12

Speaker A

there's there are other developed economies that have much higher debt to GDP than uh than the US or France. and yet they have lower interest rates. So clearly this is not the only factor that's important to consider. There are

38:27

Speaker A

many others and again what I discussed earlier there are significant disinflationary forces in the economy that have steadily pushed interest rates lower for the past 50 years. Even as our economies became more heavily indebted and again aging population, slowing

38:42

Speaker A

population growth, technology, wealth inequality is growing. All of this I think put pressure on inflation and interest rates and I don't think that those are going anywhere. I think that the AI revolution also is a big topic. I

38:56

Speaker A

think that could potentially turn into the biggest deflationary force of the century. I think that while it may create significant wealth over the long run, I think that it could also lead to a difficult transi transition period with

39:09

Speaker A

potentially it eliminating much more jobs than it creates in the immediate term. Uh and if that's the case, I think that the Fed will and the central banks around the world, not just the Fed, will be put in a tough position where they'll

39:20

Speaker A

probably be pressured to ease as well. Then Declan Kennedy is asking, "If you were rebuilding your entire portfolio today from scratch, which three to five of your current holdings offer the best expected 12 month total returns?" Like it's a it's a tough question to

39:39

Speaker A

answer because really I'm sorry, but I don't have a crystal ball. I I simply cannot predict what any rate will do or any stock over the next 12 months. It's just too short of a time period especially in today's world. But it's

39:51

Speaker A

just too short of a time period. But if you ask me the same question focus on next 5 to 10 years some of the names that now come to my mind are but again keep in mind also that I have a high risk tolerance. I

40:04

Speaker A

have a long investment horizon. I don't necessarily need the income today even though having a high yield is a plus. Uh but I have a high risk tolerance. Some names that come to my mind are Sure Student Housing, Shard,

40:19

Speaker A

uh Big Yellow Group, if you want to be on the higher side, Alexandria, um Rex Ford, um SBA Communications, but th those are really for REITs that you know have significant potential upside already potentially over the coming years. if you want to look but

40:44

Speaker A

there are different types of reads and if you're more of a growth oriented investor I think that recently we highlighted Blackstone digital infrastructure I think that could be a very interesting name to consider um I think that H ah sustainable

40:57

Speaker A

infrastructure is another one agra realy you know it's it's not there's never a read that fits every investor it depends heavily on your objectives your risk tolerance your income needs and that's why it's so difficult to answer these

41:10

Speaker A

questions and especially just 12 months is too short of a time period. But but okay, but if you focus on NAV price upside, I will probably focus heavily on Europe because that's where you have the steepest discount to NAV and the

41:24

Speaker A

greatest upside potential if my thesis of low interest rates play out. So again, housing, shore guard, VGP, big yellow group, perhaps Bonovia. Those would be my five names that come to my mind. It's on the higher risk side but also

41:41

Speaker A

significant upside potential. Brett is asking about safe hold and uh no my thoughts have not changed materially.

41:49

Speaker A

Ultimately it's a leverage bet on lower interest rates because these are ground leases and it's a heavily leveraged ground lease vehicle.

41:57

Speaker A

If we get lower interest rates its equity value could explode to the upside. And since that's what I expect, I'm quite bullish on it. I'm investing in it through Star Holdings symbol ST ho because it's it's a it's a way to get to

42:11

Speaker A

get direct exposure to safe hold at an even lower valuation. We quite recently posted an update on it uh uh that um you'll find a link to it in our Google sheets if you click on update on the all the way to the right

42:28

Speaker A

of the sheets. Then Basil is asking what do you think of Patria investment? Is it still a good investment in your view?

42:35

Speaker A

What price? Okay, so let's ask answer first on Patreon. It has dropped just like every other alternative asset manager in big part because of the uncertainty of the that that's happening in the market but also because of the surge in interest rates.

42:52

Speaker A

Um the the general view of the market is that if interest rates are rising there might be less demand for alternative investments and this would then uh you know hurt alternative asset managers because there will be less demand for

43:03

Speaker A

their services. But if you actually look at the results of these alternative asset managers as an example look at Brookfield which is one of the biggest names in this space. It's actually posting record fundraising results. It's raising more money than ever. And so

43:19

Speaker A

clearly it's a it's a clear contradiction to what the market is believing. And I think that that's simply because interest rates are not the only factor. I think that importantly when there is lot of uncertainty like we have today our world

43:32

Speaker A

is very chaotic. We have lot of volatility in interest rates. We have wars. There is in inflation uncertainty.

43:39

Speaker A

There's a lot of things to consider. There's political chaos. In such an environment people want more diversification not less. And if you want more diversification, you have to add more alternative investments in your portfolio. And this then benefits these

43:53

Speaker A

alternative in investment firms even despite the surge in interest rates. And I think that Patria plays really well into this because a lot of institutional investors, the big global institutional investors are underallocated today to Latin America. And yet it's offering

44:09

Speaker A

great diversification benefits, especially in today's chaotic world. It's often seen as a safe haven from geopolitical turmoil and this has benefited Patriot. Its fundraising has been going well and I think that it will keep doing well and for this reason

44:23

Speaker A

following this dip I'm buying more of it just like I also like Blue Wall Capital Brookfield and many other alternative asset measures at these prices. Then your second question what price will realy income be a good buying opportunity? I think it's a good buying

44:38

Speaker A

opportunity already at today's price has dropped quite significantly um despite the company doing quite well. It's all driven by interest rate volatility once again. So I think that today's price already attractive. Then Christian is asking about Texas Pac Pacific Landing

44:52

Speaker A

and its current share price. Uh I'm sorry Christian but I don't really have a strong opinion on it. I've looked at it briefly several times and it's been pitched by many value investors as a potential way to invest in land on the

45:05

Speaker A

path of growth at a discount but ultimately I haven't dug deep enough into it to give you a well-informed opinion. Sorry. Now Brian is asking do you see anything unusual or alarming on agrialties drop? I do not. We discussed

45:21

Speaker A

this briefly early in this call. You know, I've met the Agra realy co twice this year and uh he's very optimistic about how their business is going and I think rightfully so because they have significant liquidity. They have a

45:34

Speaker A

historically strong balance sheet. So they have significant capacity to take on new investments and uh you know so they are not heavily impacted by the surge in interest rates. I expect them to keep growing steadily at a mid to

45:46

Speaker A

high singledigit growth rate. Um and yet now they they are back down quite a bit just like every other REIT and especially net list REITs which have long duration assets. I already bought the deep and expect to accumulate more

45:57

Speaker A

of it if it stays at these levels or drops even lower. Then Damu is asking can you share your thoughts on uh LEN and MRP? Um do I see balance sheet liquidity risk? And yes I do. But uh I I do I think that MRP

46:16

Speaker A

specifically, it's something that I worry about. But but again, just like in the case of um of Texas Pacific land, I'm sorry, but I'm not really well informed on those two names. I don't follow them closely because I'm simply

46:29

Speaker A

not interested in these type of business models. Um they are more complex stories. Who get interested in them? If if the REIT market was fairly valued, if it if you couldn't buy high quality names like Camden at a steep discount, I

46:43

Speaker A

would get more interested in such such names that are more complex. But given that can invest in very simple high quality reads today with strong investment grade balance sheets, blue chip management at at steep discount, I'd rather keep it simple and focus on

46:59

Speaker A

that rather than get involved with these more complex stories. Steve is asking what's your view? What in my view is the most attractive apartment read today and well I just discussed Camden. I think that it's probably Candam um you know I like BSR

47:14

Speaker A

read a lot as well to gain exposure to sunb belt markets but in this recent dip BSR and Camden have dropped by about as much despite Camden having a far better balance sheet. It has an A minus credit

47:27

Speaker A

rating lower leverage so it's less impacted by the surge in interest rates. Camden recently also sold its California portfolio which were some of its weaker and older assets. It sold them at a low 5% cap rate and yet it's trading at a

47:41

Speaker A

near 7% implied cap rate and it used some of the proceeds from this asset sales to buy out buy back a lot of its stock. It's been one of the most aggressive uh purchasers of its own stock in the entire REIT market. Um, so,

47:55

Speaker A

so if I had to pick one, I would probably go with Camden in terms of risk-to-reward, but I like BSR rate a lot and I think that their their concentration on the Texas triangle will likely benefit them on the on the long

48:07

Speaker A

run and potentially to higher returns, potentially also faster upside realization if they get bought out by a larger peer, but it is somewhat riskier and in this environment with comparable discounts rather go with Camden.

48:22

Speaker A

Then Mitch is asking uh thoughts if the higher rates for longer will cause another dividend cut for Clipper and share price will fall back to three.

48:31

Speaker A

Like I think that Clipper should not just cut its dividend. I think it should fully suspend it because look like Clipper it's one problem is its balance sheet. It has too much leverage. It has some assets that are facing issues.

48:46

Speaker A

I will be much more bullish on the name and willing to buy more shares if they just suspended the dividend and retain all this cash flow to gradually work down their debt and perhaps buy back a bit of shares if if they had the the the

48:59

Speaker A

u the ability to do so. Uh but but yes, so I certainly wouldn't buy Clipper for the dividend. Uh I don't think it's sustainable for them, especially if interest rates remain higher. I see it more of a as a you know NAV upside play

49:14

Speaker A

because they trade at a small fraction of their NAV even as most of their assets are doing really well. You know housing is under supplied in New York.

49:21

Speaker A

Rants are growing steadily for this affordable housing. Um and so if interest rates return to lower levels and the market suddenly isn't so concerned anymore about the REIT solvency then we could see a rapid surge in its share price. And that is the

49:37

Speaker A

reason why I hold it. It's a leverage bet on lower interest rates at these levels, but I wouldn't bite for the dividend. Then Mitch is also asking, would I would you agree that most likely interest rates in in Europe will stay

49:50

Speaker A

higher for longer than that in the US? So opportunities in eur in Europe will be even more compelling perhaps in Q1 of 2027 or even in December with tax laws selling.

50:01

Speaker A

Look, I think that unfortunately a lot of people like to think that markets are very simple and just because interest rates are rising, reach will drop further or that just because we approaching tax laws selling companies that have been declining should decline

50:17

Speaker A

further. But the reality is that markets are more complicated than this. If it was so simple to to outperform markets and earn alpha would have a lot more very successful traders out there. But the reality is that markets are know

50:34

Speaker A

about these factors. They know about potential tax loss selling. They know about interest rates. The market's a forward-looking machine. Um and so these things are backed into expectations. Uh you it doesn't mean that they won't decline further, but it's more

50:48

Speaker A

complicated than this. And you know it's no secret to anyone that central banks are expected to keep hiking in the near term. This is I think already reflected quite well in the long term. Treasuries as well in the US as an example would

51:01

Speaker A

have surged a lot more than this 25 basis point hike. Um and so you know I wouldn't necessarily think that just because rates will be hiked further that rates will drop further.

51:12

Speaker A

They could of course I cannot time the market. I cannot predict what it will do in the short term, but I think it's more complicated than this. But I I do agree with you that Europe is more heavily

51:22

Speaker A

impacted. Rates may remain higher for longer in in Europe. Um and uh and so it is quite possible that we have a good window of opportunity to accumulate more shares, but it could just as well close quickly if the war ends. As an example,

51:38

Speaker A

it doesn't seem right now that's going to end anytime soon, but we've had a lot of surprises along the way over the past six months. So we'll see.

51:46

Speaker A

Then Henry Henry is asking about agri realy which we've discussed a few times already but in short you know I bought the deep recently. I'm very bullish on it. All net lease rates have dropped significantly in recent rates weeks

51:59

Speaker A

simply because of interest rate volatility but the long-term outlook for these rates have not changed. Agra realy has preunded a big portion of its equity needs for its new new acquisitions and so it's in a good position. It has a

52:10

Speaker A

strong balance sheet. It's growing steadily and now it's more heavily discounted. Then Demo is asking my shares on on Vin Casino Company. I don't have a strong opinion on it. I'm sorry.

52:22

Speaker A

Um Caesar was really the name that I like because of its heavy real estate holdings. I haven't dug deep into that one. Uh but it could be actually something worth digging into. I'll add it to my list. However, one thing that

52:37

Speaker A

will make me a bit reluctant to invest in it is that right now you can invest in Vichi properties mega cap investment grade rated triple net lease casin at a large discount to its nav. It's a very simple story and so I see less appeal in

52:53

Speaker A

you know going to more complex stories like a cazasino company like this. Drew is asking about MRP by wholesale.

53:03

Speaker A

I'm sorry, but I don't have a well-informed opinion on this one specifically for me. It's not something that's interesting simply because it's too complex. Brian is asking any update on Rick. Uh any updates on the can?

53:15

Speaker A

Okay, so let's start with Rick. Look like there is not no major update since we I last discussed it. There's one interesting thing though. I I have been in contact with the investor relations of the company and following the next

53:30

Speaker A

results I'm expected to get a chance to interview the former CEO Eric Langan which is still an adviser to the company to discuss everything that's happening and so that should be very very interesting. uh but you know generally

53:45

Speaker A

speaking obviously Rick is down heavily but if you look at most restaurant stocks whether it's uh uh what would be good examples like really most restaurant stocks they're down very heavily uh down 50 60% in some cases whether it's Chipotle or any of

54:04

Speaker A

them and and Raiki is an even more cyclical it relies heavily on discretionary spending and so and then you add the legal issue that they run into on top of it. So, it's not surprising that it's down. If anything,

54:17

Speaker A

perhaps you would expect it to be down even more given that all these restaurant companies are down so heavily.

54:24

Speaker A

Um but but generally speaking, long-term outlook for me remains very positive. I still believe in the long-term thesis.

54:29

Speaker A

The management is very aggressively buying back shares at these levels. They're trading at four or five times their free cash flow. It's it's very attractive uh valuation and they're creating a lot of value for patient shareholders. Any updates on cannabis

54:42

Speaker A

move to reschedule um cannabis as a less dangerous drug? How it would benefit treat rates like a new lake capital partners and innovative industrial properties.

54:53

Speaker A

Um no major update since we last shared our our update. I hope to interview the CEO of New Lake Capital Partners as well following the next results. Um I've been in touch with him as well. Um generally speaking, you know, it's very positive

55:09

Speaker A

if it gets rescheduled because the main issue that cannabis operators have had is their poor credit. Uh and this has affected the market sentiment of these cannabis rates because there's been a lot of lease delinquencies, tenant defaults. And so if cannabis gets

55:24

Speaker A

rescheduled and this ultimately benefits the credit of these tenants, it gives them better access to capital, lower effective tax rates. this should reduce the risk of cannabis rates and the market sentiment should benefit from it.

55:38

Speaker A

So overall it's positive but the timeline remains uncertain and that's what I would like to discuss with with him.

55:46

Speaker A

Christian is asking which books expect your book will you recommend for someone new to reads? I like investing in rates by Ralph Block. That's perhaps my favorite book on rates if we in your mind which you can access for free um as

56:03

Speaker A

a member of high yield landlord. Mitch is asking um does the preference of innovative industrial properties at $25 per share um uh pure dividend play with no growth. Yeah, like I like them and right now they're actually trading

56:19

Speaker A

at close to $25 per share. So there's a small discount to have but but you know you're getting a 9% yel on them that's very attractive for preferred shares of a company with very low leverage their LTV is only about 10% I believe at the

56:35

Speaker A

moment or it's reason close to 15 20% now but still it's very low conservative for for REIT um and and yet the yield on the preferred is so high simply because yields are high in the cannabis sector it's a higher risk higher reward

56:48

Speaker A

property sector but you know there is lot of margin of safety for the preferred shareholders and so I like it at these levels.

56:55

Speaker A

Then he's not noting as well that Vich is dipping further um and would it be a better holding with its dividend yield now at 8 9% and perhaps some growth and upside and innovative industrial properties. I think that they are we shouldn't perhaps

57:11

Speaker A

compare them directly because they are very different types of investments. Vichi I'm very bullish on it obviously but there are greater risk to it because this is common equity and there are you know scenarios in which you could end up

57:25

Speaker A

with uh real losses here if let's say Caesars runs into greater difficulties and they end up renegotiating their regional lease in a way that's very negative to Vichi which I do not expect but it is a risk that we need to account

57:42

Speaker A

for it's there's no certainty that the the the the rent will get paid and the lease won't get renegotiated in a very negative way and and so that would then suddenly you might have negative growth for some time. So I don't think this is

57:56

Speaker A

happening. I'm bullish on Vichi. The management also just recently hiked the dividend which I think is a pretty positive signal for where they think where they sees things going but it is something to to consider. um and innovative industrial again it has no

58:11

Speaker A

growth but it's a it's sitting higher on the capital stack and there's not much leverage so it's a safer income investment in my opinion ray is asking if interest rates remain higher for longer because of higher debt in

58:22

Speaker A

developed countries uh what sector would offer the best of opportunities well you would want to focus if you expect higher for longer interest rate environment you would want to focus on rates with low leverage assets that are in demand and enjoying

58:36

Speaker A

rent growth and are likely to become under supplied in recent years because again the high rates if rates remain high for long we will have much less supply hitting the market in recent years and so you want to focus on those

58:48

Speaker A

property sectors that are likely to become under supplied perhaps that have been overs supplied so have poor market sentiment because of this but will become o under supplied because of the high rates limiting new supply and I think that apartment communities are a

59:02

Speaker A

great example self storage is another one industrial also Then Elizabeth is asking, "I see a lot of low income apartment and senior and and single family home rentals being developed in North Central Florida, Gainesville, um, San Antonio, Palatka.

59:22

Speaker A

It's hard to imagine how all the supply will be absorbed. Your thoughts?" So, so generally speaking, like obviously like there's still a lot of development projects getting finished, but the new supply under construction that's getting delivered is actually has already

59:37

Speaker A

declined very significantly from the peak levels of 2025. they they're down very significantly and they expected to reach uh historically low levels in 2027 and decline even further in 2028 because with today's interest rates and cost of construction you simply cannot uh build

59:53

Speaker A

profitably in many cases much more complicated business so so and and obviously you you're mentioning these markets these are while there's much more supply in these specific markets these are also higher growth markets and so you have the demand that's coming but

60:10

Speaker A

but Yes, you're right that some specific markets will have will face over supply for longer than others, but overall things are getting a lot better in 2027 and I expected to get even better in 2028.

60:23

Speaker A

Jacob is asking about invitation homes is a good alternative to Camden Property Trust. I think that both are attractive to hold together because they're quite different type of investments despite both focusing on residential properties. The the nice thing that I like about

60:40

Speaker A

invitation homes obviously is that these are single family rentals and this gives them great optionality in how it can sell individual homes. Uh this it's a very liquid market. It can sell the homes, get the cash, buy back shares. It

60:54

Speaker A

has done a ton of that. Uh it has bought I think about 5% of its stock over the past year. Uh it's very active in that.

61:01

Speaker A

I also like that single family rentals enjoy potentially a much stronger demographic tailwind over the coming years because it's estimated that 13,000 people will turn 35 every day over the next 10 years on average. And people as they get into

61:18

Speaker A

their mid30s, it's when they are building families, they want more space. They often move to single family rentals. And given that home ownership is today very unaffordable, I think that a lot of people will choose renting simply by necessity. So it's a better

61:32

Speaker A

better value for your money as well. And this will grow the pool of renters at a rapid pace over the coming years. And this will lead to strong rent growth for single family rentals. Um so it's a bit

61:43

Speaker A

of a different story from Canden and I like it a lot and I like the idea of combining both together for a better risk to reward.

61:50

Speaker A

And I would add that the discount to nav in the case of invitation home is very big as well. They they um on the investor deck I think they have a slide that shows that they estimate the discount to nav to be 36% back when they

62:02

Speaker A

trading at $29 per share and since then it has dropped back down I think to 26.

62:07

Speaker A

So now the discount is close to 40%. Christopher is asking if I have an opinion on Seapport Entertainment Group.

62:15

Speaker A

[clears throat] We recently had um an investor that I respect a lot come on uh high landlord.

62:22

Speaker A

We filmed a video interview with him and this is one of these top holdings. We discussed in great detail [clears throat] and you can you can you can watch that video if since you're a member of high yield landlord. Uh and I

62:35

Speaker A

think he made a very compelling case. Ultimately, the main reason why I have invested in it is because [clears throat] it's a more complex story. Again, given how discounted our blue chip reads that offer consistent income, a high yield,

62:49

Speaker A

and a clear gap to nav, I rather simply focus on these simpler stories today rather than get into these more complex ones. But with that said, I think that the thesis he presented was very attractive and this definitely worth

63:02

Speaker A

considering. Can I share my thoughts on NLOP which is a single U tenant office net lease rate they are in their liquidation phase again too complex in my opinion and I I don't like these type of assets at all

63:20

Speaker A

they've successfully sold a lot of their assets but obviously they managed to sell first the higher quality assets which means they likely now have the lower quality stuff remaining and this is not the type of assets that I like.

63:31

Speaker A

um liquidation stories are typically more complex. There is ex execution risk. Um and again given that you have simpler stories trading at steep discounts, I rather focus on those and for this reason I haven't dug deeper into it.

63:46

Speaker A

Okay, we're getting to the last question from Yonas. Um is what is safe for dividend RITM or New Lake Capital Partners? I think it's New Lake Capital Partners. They've hiked their dividend most years since going public. Their dividend still well covered. It's in

64:01

Speaker A

their targeted range of 80 to 90%. The management is very shareholder friendly. Uh they have no leverage. The netcast posit positive. So and with the outlook improving I think that they obviously there's no 12% dividend yield that's perfectly safe like we don't need to lie

64:17

Speaker A

to oursel but I think that for 12% yield is one of the safer one you can find in the market. Okay last one. Damu is asking I already shared my thoughts on Alexandria real estate but can you also

64:31

Speaker A

share more on the risk balance sheet liquidity do you think has more margin of safety now well Alexandria obviously is not without its risks it's focusing on a more on life science properties which can be quite cyclical because well

64:44

Speaker A

the cyclicality is not just on the supply side but also on the demand side and they really had the perfect storm following the pandemic because initially following the pandemic we had an enormous demand for life science space and so ranch work really rapidly but

64:58

Speaker A

this then obviously got caught the attention of developers who started building all over the place expecting this pandemic era conditions to last but they didn't the world normalized and then the supply hit the market even as the demand had cooled off and so we end

65:12

Speaker A

up having more over supply than we've had in decades and then at the same time we had a lot of chaos regarding uh you know the biotech the life science sector in US on the policy front regulations threats of tariffs

65:29

Speaker A

and various things which then depressed demand even further even as the property sector was already over supplied and so this then led to declining rents, declining occupancy rates and obviously if you if you think that this this will

65:42

Speaker A

continue for a long time to come and rents will keep crashing down will come a point where Alexandria's balance sheet will get dangerously overleveraged and they'll have to cut their dividend further.

65:53

Speaker A

I think that we already now have a bit of some positive signals uh on on on the funding increasing for biotech companies, the demand recovering somewhat. Um and I think that um this uh this is unlikely to pay play out like

66:10

Speaker A

that. They've already faced a lot of pain, but ultimately they still have a tripleB uh investment grade rating. The debt maturities are some of the longest in the REIT sector. They have good good amount of liquidity. they've proven that

66:22

Speaker A

their assets also can be transacted at cap rates that are quite quite uh you know reasonable um and so so I don't think that um they they are facing any distress and the credit agencies do not either but uh it's not impossible that

66:39

Speaker A

they have to cut the dividend if you go into a more negative scenario I think they'll manage to sustain it but but um it's not risk-f free obviously okay Jacob still has one question. What which has the most potential? Kite Realy

66:56

Speaker A

Group or Kimco Realy in the retail space? I'm about equally bullish on both at these levels. Uh I think that Kimo has dropped a bit more has not had has not enjoyed as much upside as Kite this this year. And so because of that, I'm

67:11

Speaker A

about equally bullish on both at the at the moment. If you had asked me before this upside, I would have said kite realy probably and that is why we hold it in our core portfolio which which seems to maximize total returns.

67:25

Speaker A

Okay, that's all the questions we had on the chat and the hour is now over so I'll close this webinar but thank you very much to all of you who who put all those questions on the chat. A lot of

67:39

Speaker A

very good ones. Um and we'll do this again at the latest uh in in a few months from now uh end of this year. Um like you again I'm quite frustrated obviously by this latest setback with interest rates surging and this causing

67:57

Speaker A

another sell off in rates but I don't think that this changes the long-term outlook for inflation and interest rates. I still think that eventually interest rates will come back down aggressively and this will push rates to to new highs and that could lead to

68:11

Speaker A

significant upside given that these discounts you never so big. In the meantime, we earn a good dividend yield.

68:17

Speaker A

Management teams are buying back shares in many cases to take advantage of these discounts. Rent growth will accelerate as the result of the lack of new supply which is caused partially because of the high interest rates. So I remain

68:30

Speaker A

optimistic. Uh I'm going to share a portfolio review over the coming days. There will be more thoughts on all of this for you to digest and otherwise we'll keep just following our strategy gradually buying the dips week after

68:41

Speaker A

week small additions because we cannot time the market. Uh but we know that valuation is attractive from a long-term perspective. So I'll just keep identifying the latest best dips to buy and gradually build larger positions in our rates. Thank you very much again and

68:58

Speaker A

and see you at Hayed Landlord. Bye-bye.

Topics: REITs interest rates inflation Realty Income Essential Properties Realty Trust rent growth investment strategy Jussi Askola Q3 2026 webinar real estate investing

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