Honest question for REIT investors: Is there anyone who can provide me with an argument against buying SPG that is not COVID related? I am a 24 year old investor and have a 5+ year time horizon. SPG owns the most valuable retail real estate in the world and their tenants were growing sales at 5% last year, so I don’t buy that e-commerce is a serious long term threat. Yes, out of date retailers will go under, but will be replaced by more modern tenants. SPG is transitioning their properties to mixed use to incorporate hotels, offices, and apartments to drive foot traffic. So yes, traditional malls are a thing of the past, but well located mixed use entertainment and retail destinations are the future. Unless you are a retiree desperate for income, I don’t see why a dividend cut should be worrisome. It’s really the financially responsible thing to do in this environment. The cut will be by 50% at the most, which stills offers a 6% yield. I have read all the bearish sentiment on SPG. And yet, I have not heard one good reason why SPG wouldn’t be back at pre-pandemic levels of $140 / share within two years. That’s honestly at a minimum, I think you could argue fair value is even higher than that. So buying here gives me a good chance at doubling my principle investment, plus at worst a 6% yield which I will reinvest until the price meaningfully recovers. I expect the dividend will recover to pre pandemic levels within two or three quarters as well, which would put the yield closer to 12% if bought at current prices. I already have a small position at the low $50 level and am thinking about adding heavily. Help me out, what am I missing?
Submitted June 23, 2020 at 09:13PM by monsieurmonaybags https://ift.tt/3fSxRq6
