Real Estate Sector Ideas

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>>> Here’s how to invest in real estate — think Warren Buffett-style, not shopping malls


By Sara Sjolin

June 27, 2017



http://www.marketwatch.com/story/heres-how-to-invest-in-real-estate-think-warren-buffett-style-not-shopping-malls-2017-06-27?siteid=bigcharts&dist=bigcharts


Hang out in data centers, not malls.

So, where to invest for the second half? Well, there’s lots of chatter about real estate investment trusts, aka REITs, after yesterday’s news that Warren Buffett has taken a big stake in Store Capital STOR, -0.26% .

REITs can yield big profits — but only if you know which ones to buy, say Bespoke Investment Group analysts for our call of the day.

“While the shopping mall REITs have been tanking, the REITs that lease out warehouses to tech companies that need space to house all of their servers and cloud data have been surging,” Bespoke’s team says.

“The ten best-performing REITs in 2017 are all in strong uptrends, with the exception of GEO and QCP. If you’re a trend investor, you’ll like these charts,” the analysts add. (They’re referring to Geo Group GEO, -2.96% and Quality Care Properties QCP, -0.72% .)

In other words, tech-exposed and health-care real-estate stocks have had a stellar start to the year and are likely to keep going up. Traditional retail real estate such as malls, however, face “Death by Amazon” as shoppers shift online. That means investors should avoid that type of building, according to Bespoke.

“While there has been lots of brainstorming about what to do with malls that often look like ghost towns these days, we haven’t seen any convincing ideas yet (except maybe turning them into tech data centers!),” the analysts say.

One of Bespoke’s picks also gets praise from Forbes and Seeking Alpha scribe Brad Thomas, who singles out CareTrust CTRE, -0.81% as a “REIT gem” set for relatively speedy earnings growth.

As for Buffett’s REIT pick, that’s along the lines of what Bespoke is backing — less than 20% of Store’s portfolio is in traditional retail.

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