The Bionic REIT Portfolio: 10 Years Since The Great Recession
- The financial markets were in utter turmoil then, with no certainty any REIT would have access to capital.
- There were just a handful of REITs able to grow their dividends during those dark days.
- But over the last 10 years, since the beginning of the recession, REITs have witnessed an evolution… in which they’ve become much stronger, smarter, and durable.
Some readers might remember “The Six Million Dollar Man.”
If you grew up prior to the late 1970s, you’re likely familiar with the science fiction TV series about former astronaut Colonel Steve Austin (portrayed by Lee Majors). If it was before your time, the series centered on Colonel Austin’s superhuman strength – due to his bionic implants.
As the story goes, Colonel Austin was severely injured while working at NASA, and subsequently “rebuilt” at a cost of $6 million ($35 million today). His right arm, both legs and left eye were replaced with “bionic” implants that enhanced his strength, speed and vision far above human norms: he could run at speeds over 60 mph (97 km/h), his eye had a 20:1 zoom lens and infrared capabilities, and his bionic limbs had the equivalent power of a bulldozer.
Watch the show’s intro:
Several loyal readers have asked me to help build a bionic REIT portfolio – one to stand the test of time and not get devastated – like most REIT investors witnessed during the last recession. I’ve taken up the challenge – and will make a case for a highly durable portfolio built from 5 of the best/healthiest/strongest/fastest REITs available.
First, an important and serious history lesson… happily, including a bunch of charts.
As you might know, I began writing on Seeking Alpha in 2010, and in those days, it was hard to get the attention of a REIT investor. Nearly all REITs were punished during the last recession – the “Great Recession,” Dec. 2007 to June 2009, (only paralleled by the Great Depression) – which saw the end of Lehman Brothers and Bear Stearns, and the near collapse of Citigroup (NYSE:C) and AIG.
The financial markets were in utter turmoil then, with no certainty any REIT would have access to capital. There were just a handful of REITs able to grow their dividends during those dark days.
But over the last 10 years, since the beginning of the recession, REITs have witnessed an evolution… in which they’ve become much stronger, smarter, and durable. While nobody knows when the next recession will strike, one thing is certain: REITs are now much better and stronger. As Benjamin Graham explained,
Adversity is bitter, but its uses may be sweet…in the end we could count great compensations.”