Kanye West isn’t exactly a trusted source of financial advice, but he has done very well for himself and is a very effective communicator. He recently tweeted this:
Mr. West brings up an interesting point. Like almost every other asset class, real estate investments have been hit hard by the COVID-19 pandemic. In fact, in a June survey of more than 340 real estate investors conducted by MyHouseDeals, more than 40% had a negative outlook on the market in the next year.
But as legendary value investor John Templeton once said, “The time of maximum pessimism is the best time to buy.” The aforementioned rapper might be onto something in recommending real estate investments during such a dark period for the industry.
Where can real estate investors find value during a strange time like this? Let’s take a look at some real estate investment trusts (REITs) that could actually benefit from the current situation…
The self-storage industry had been on a tear before the COVID-19 pandemic; construction spending in the sector increased by more than 500% in the last five years according to the U.S. Census Bureau.
Plus, the industry appears to be shrugging off the virus — perhaps even profiting from it. Self-storage has been classified as an essential business by even the most strictly quarantined jurisdictions, and there’s lots of demand for it.
According to a recent survey of 2,000 young adults by TD Ameritrade, a whopping 39% of adults aged 24 to 29 are either already living with their parents because of COVID-19 or plan to move back home because of it, and all of their stuff has to go somewhere.
These factors explain why storage rents have actually increased in select markets like Pittsburgh, Charleston, and Columbus over the summer months, while most kinds of rents are in freefall.
Storage REITs like Public Storage (NYSE: PSA) and Extra Space Storage (NYSE: EXR) provide exposure to this red-hot industry.
Data Center REITs
As we all know, one consequence of COVID-19 is that work has moved online for many people. I, for example, am writing this article from my apartment and not from Angel Publishing’s offices.
That’s bad news for the office segment of the real estate sector but good news for the data center segment. After all, the huge surge in remote work has led to a significant strain on the servers that host popular websites and web services.
According to network intelligence firm ThousandEyes, the weekly number of network outages around the world broke records in February and March — a sign that many sites and services are reaching their physical capacity and will need to buy or build more server space to keep up with demand.
Fortunately, there’s a special kind of REIT that invests specifically in server warehouses. Digital Realty Trust (NYSE: DLR) and CyrusOne (NYSE: CONE) both give investors exposure to the extremely in-demand properties that house the equipment powering the burgeoning work-from-home internet.
E-commerce is another major winner of the economic disruption caused by COVID-19. According to e-commerce services firm Signifyd, online sales surged by 40% in the last five days of May when compared to the last five days of February.
And in its most recent quarter, Amazon’s revenue surged 40% year over year — the strongest quarter of revenue growth since 2018. Some analysts think it could hit $100 billion in sales next quarter.
Once again, this is bad news for certain parts of the real estate market — like retail space — but good news for others, like warehouse space.
Luckily, you can buy REITs that specifically invest in the warehouses used for e-commerce fulfillment. Stag Industrial (NYSE: STAG) and Prologis (NYSE: PLD) both count Amazon among their largest tenants. Full story at Wealth Daily
Early AirBnB Investors to Cash Out 799,900% Profile
I don’t know if you heard, but Airbnb just filed for its IPO. Sources say it’s likely to be valued above $20 BILLION!
But it was only worth $2.5 million when early investors first funded the company. Now they stand to rake in a staggering 799,900% profit on their early investments!
That means every $1,000 invested will be worth $8 million or more!
Investors who plunked down $10,000 in the first round will cash out with at least $80 million. And big spenders who had the foresight to invest $50,000 will walk away with no less than $400 million!
Just imagine. Even a $100 investment in Airbnb’s earliest rounds would have gotten you an $800,000 exit! Think what you could do with an extra $800,000… and all for just $100 up front.
Obviously, it’s too late for you to cash in on Airbnb’s private rise to fame.
But it’s not too late for you to invest in the next Airbnb… or Uber… or Instagram… all before they go public or get a multibillion-dollar buyout offer.
Thanks to a recent landmark act of Congress, the private market that’s minted countless multimillionaires and billionaires is open to the rest of us.
For years, you had to be super wealthy just to participate in private deals like this. But now, today, you too can get in on the most profitable market in history.
Ex-Wall Street investment banker Jason Williams has decided to open his network of entrepreneurs, angel investors, and startup founders to you.
Click here to learn how to join him and his elite investors as they get the early shares to ensure the biggest profits upon exit.
Start today with as little as $100…
Leave a Comment