If I Had To Retire Today With 10 REITs - Part 2

Core Insights - The article discusses a strategy to create a diversified 10-stock REIT portfolio aimed at retirement, focusing on REITs trading at a discount across various property sectors [1] Group 1: Selected REITs - The first three REITs highlighted for the portfolio are Sun Communities (SUI), Crown Castle (CCI), and VICI Properties (VICI), which are diversified across manufactured housing, cell towers, and gaming sectors [1] - The next three REITs to be included will focus on industrial, healthcare, and net lease sectors to further enhance diversification and reduce portfolio volatility [1] Group 2: Rexford Industrial (REXR) - REXR owns 422 properties in Southern California, which has the lowest industrial vacancy rate at 3.9% compared to the national average of 6.1% [2] - The diversified portfolio includes warehousing/transportation (31%), wholesale trade (23%), manufacturing (23%), and other sectors [2] - In Q2-24, REXR reported FFO of $0.60 per share, an 11% year-over-year growth, with same-property NOI growth of 9.1% [3] - The company has $229 million of incremental cash NOI growth expected over the next three years [3] - REXR has a net debt to EBITDA ratio of 4.6x and nearly $2 billion in total liquidity [3] - The stock trades at $50.92 with a P/AFFO multiple of 27.7x, and a dividend yield of 3.3% [3] Group 3: Healthpeak Properties (DOC) - DOC specializes in healthcare real estate with a market cap of $15.4 billion, focusing on life science labs, outpatient medical, and continuing care retirement communities [4] - The lab properties segment accounts for 51.3% of adjusted NOI, while outpatient medical makes up 37.6% [4] - In Q2-24, DOC reported FFO of $0.45 per share and increased its FFO guidance range to $1.77-$1.81 [4] - The stock trades at $22.28 with a P/AFFO multiple of 14.4x and a dividend yield of 5.4% [4] Group 4: Realty Income (O) - O is a net lease REIT with over 15,500 properties across the U.S. and Europe, benefiting from scale advantages in M&A and bulk transactions [6][7] - The company has a net debt to annualized Pro Forma Adj EBITDA of 5.3x and a fixed charge coverage ratio of 4.6x [7] - In Q2-24, O reiterated full-year investments at $3 billion and an AFFO per share guidance of $4.15 to $4.21 [7] - The stock trades at $62.11 with a P/AFFO multiple of 15.1x and a dividend yield of 5.1% [7] Group 5: Summary of REITs - A summary table of the six REITs includes their price, P/AFFO, normal P/AFFO, variance, and dividend yield, indicating that all selected REITs are trading below their normal P/AFFO ranges [8] - The average P/AFFO across the selected REITs is 18.2, with an average dividend yield of 4.5% [8]