Summary
- The REIT sectors benefitting from today’s structural tailwinds include cell towers, data centers, life science, and single-family residential.
- We need to use caution to properly adapt to the changes around us.
- I’m not sure when I’ll get back to the “Big Apple.” But though I may not be there in body, I am in spirit.
- This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »
- To return to the office or not to return to the office.
- I’d make a joke about that being “the question,” except it really is. And employers and employees alike are taking it seriously.
On the one hand, many businesses and their workers are concerned about safety on multiple levels. The chances of a healthy person in the United States catching and then dying of COVID-19 are very low right now. But the fear is still very much there, as is the business concern of being sued.
Therefore, when the majority of office workers will return to their respective buildings remains up in the air.
Some individuals are happy about that, of course, and not just because of the fear factor. There are plenty of people who aren’t too fond of their supervisors, for one. If there’s a way they can avoid their bosses breathing down their necks in person…
You’d better believe they’re going to take it with a smile.
Others might be perfectly fine with their supervisors but not their coworkers. Or their commutes. Or the lack of proper coffee machines.
As real coffee drinkers understand, Keurig and its equivalents do not compare.
But Christina Chiu, CFO of Empire State Realty Trust (ESRT) says those aren’t the only considerations to take into account. And I very much agree.
Nobody Likes New York City Anymore?
Last week, I interviewed Chiu about her company’s big picture of their Big Apple bet.
Before 2020, it was automatically assumed that a landlord – commercial or otherwise – in that enormously important metro would have to be exceptionally foolish or exceptionally unlucky to lose money.
It was New York City, after all! The city of Seinfeld. Broadway. Wall Street!
There was something there for everyone, whether they go there for business or sight-seeing. Which meant that hotels, apartment buildings, and shop spaces alike were doing very well.
Tenants knew they had to pay a pretty premium for space there. It was the landlords’ way or the literal highway, which equated to a commuting nightmare.
But then the pandemic hit, and the shutdowns began. Now we’re seeing headlines like this one from Yahoo! News: “New York Real Estate Market Loses $1.4B in 2020: Report.”
