Put REITs In Retirement

Core Insights - The article discusses the investment potential of Americold Realty Trust (COLD) and Essential Properties Realty Trust (EPRT), highlighting their unique market positions and financial performance. Company Overview - Americold Realty Trust is a global leader in temperature-controlled logistics real estate, owning and operating 241 temperature-controlled warehouses with approximately 1.5 billion refrigerated cubic feet of storage across multiple regions [12][34]. - Essential Properties Realty Trust focuses on properties leased to various tenants, including restaurants and automotive services, and has a diversified portfolio [40]. Financial Performance - COLD generated approximately $104.9 million in AFFO for Q1-24, equating to $0.37 per share, marking a year-over-year increase of over 28% [36]. - COLD raised its full-year 2024 AFFO per share guidance to a range of $1.38 to $1.46, reflecting a 12% increase from 2023 and a 28% increase from 2022 [37]. - EPRT's AFFO per share guidance for 2024 is refined to a range of $1.72 to $1.75, indicating over 5% growth at the midpoint [53]. Market Position and Competitive Advantage - COLD's facilities are considered "mission-critical" within the supply chain, providing a wide moat advantage due to strategic locations and technology integration [6][12]. - EPRT maintains a strong unit-level rent coverage of 3.9x, with 99% of tenants providing unit-level financial reporting, enhancing transparency and stability [49]. Growth Projections - Analysts forecast a growth rate of 13% for COLD in 2025 and 12% in 2026 [20]. - EPRT has averaged around 15% annual growth in AFFO per share since 2020, with analysts estimating a 7% growth rate moving forward [51]. Valuation Metrics - COLD is currently trading at $25.35 with a P/AFFO multiple of 18.7x, compared to a normal multiple of 26.7x, indicating potential for price appreciation [39]. - EPRT shares trade at $26.85 with a P/AFFO multiple of 15.9x, below the normal of 18.5x, suggesting an attractive valuation [47].