2 Blue-Chip REITs That Offer 8% Yield And Strong Upside Potential

Seeking AlphaREITs2 Blue-Chip REITs That Offer 8% Yield And Strong Upside PotentialOct. 27, 2020 8:15 AM ET|| Includes: LADR, MAC, SPG, SPG.PJ, VNQby: Jussi AskolaJussi Askola High Yield LandlordBecome a “Passive Landlord” with our 8% Yielding Real Estate Portfolio.SummaryWe believe that the REIT market currently offers generational buying opportunities with high yield and significant upside potential.
Mortgage REITs and mall REITs have rarely been so opportunistic. Many are priced at less than half of fair value.
We highlight two blue chips that we have been buying lately.
The recent crisis has created generational buying opportunities in the REIT market. Prices are low, yields are high, and the future upside potential is significant in a recovery.
The last time REITs were so cheap it was in the aftermath of the great financial crisis, and they nearly tripled in the following two years:

It may seem too good to be true, but we expect similarly strong results in the coming years. This time, the broader REIT (VNQ) market is not as discounted as it was in 2008-2009, but some specific names in hated sub-sectors are just as cheap, if not even cheaper.
Mortgage REITs and mall REITs in particular are now offered at extreme discounts to long-term estimates of fair value.
The market believes that this crisis has permanently impaired their businesses. But as we explain below, we don’t buy it. We think that this is a severe but temporary crisis with minimal long-term implications for most REITs.
It's crucial to have enough liquidity, a strong management, and good assets to get through the crisis. If you do, you are very likely to survive and eventually see much higher valuations as the panic fades away.
Below we highlight two >8% yielding blue-chip REITs that we have been buying lately.
Ladder Capital: Blue-Chip Mortgage REIT
Ladder Capital (LADR) is a commercial mortgage REIT that invests in loans and securities, but also... Read more