Given summer is still chugging along here in Scottsdale, Arizona (107 degrees Fahrenheit yesterday), Issue 9 looks at the vanilla vs. chocolate ice cream debate from a net lease investment perspective.
Additionally, and as promised, coverage includes a review of FrontView REIT’s recent IPO (wow are Form S-11 dense reading…).
In his acclaimed 1987 book The Alchemy of Finance, George Soros devotes a small passage to mortgage REIT - although the premise applies to equity REIT as well - within the theory of ‘Reflexivity in the Stock Market.’ Soros describes:
My best documented encounter with a boom/bust sequence is that of Real Estate Investment Trusts…The true attraction of mortgage trusts lies in their ability to generate capital gains for their shareholders by selling additional shares at a premium over book value…The process is a self-reinforcing one…Investors who participate in the process early enough can enjoy the compound benefits of a high return on equity, a rising book value, and a rising premium over book value.
Soros’ view is crystalized in his direct summary statement:
To understand the ups and downs of technology stocks we must know something about the underlying trends in technology; in the case of conglomerates and REITs, we need to know little else than the theory of reflexivity.
The Net Lease Observer hopes Issue 9 gives you a little something about REITs despites George’s lack of interest…!
Cheers,
Sean Hostert
