Subject: Re: REITs, 1970s/80s, stagflation
"Again, that isn't to say that there isn't a time and a place for REIT investing. If the portfolio is to generate income, if nothing else high coupons mean you get less variation in current income even if the total income is ultimately lower."

Jim, I have been very light on real estate the past 10 years and with all the chaos and turmoil in the world, I am doing some rebalancing. Hence my interest in REITs. Your comments caught my attention. I recently started a position in NNN, which is a highly rated US REIT that has been (IMO) oversold. My reasons are basically defensive. I need some diversity. I've exited some US equity positions recently and I want to allocate that capital outside of equities for a little while. I don't do any speculative trading because I am not good at it, so that isn't an option for me (no pun intemded.) A high-quality, attractively priced REIT seems like a good investment right now.

I get that you disfavor REIT's, and especially during stagflationary times, when you predict they will do worse than other kinds of investments. I also understand your point about possibly sacrificing total returns to get current income. My question is whether you disfavor real estate as an investment in general, or do you dislike REITs in particular? How much of that is concern about how they will fare during a prolonged period of elevated or uncertain interest rates (i.e., the macro environment) rather than individual decisions made by REIT managers?

To be more specific, if a REIT made smart decisions in the past few years and locked in long-term, low-interest capital, and they don't need to refinance anything significant for another 10 years, assuming all else being equal (sector, quality of tenants, etc), that would make them safer and more attractive for the next few years, no?

Appreciate any thoughts you have.

abromber