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Speaker 1: Well, the trillions. I'm Joel Webber and I'm Eric Beltierness. Eric,

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Speaker 1: there's a lot going on in the world, and we're

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Speaker 1: gonna talk about reads. Why are we going to talk

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Speaker 1: about reads? Yeah, because you know, you can just get

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Speaker 1: lost in the news cycle and all the discussions on

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Speaker 1: Twitter and just sometimes you just end up in the

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Speaker 1: Ivory Tower debating these things that are fun to talk about,

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Speaker 1: but I mean maybe aren't practical. And so sometimes you

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Speaker 1: have to just cut away, go into an area, a category,

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Speaker 1: and just roll up your sleeves and dig around and

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Speaker 1: talk about the practicality of a certain area for investors.

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Speaker 1: And so UM I thought reats were an interesting one

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Speaker 1: because a they're at a cross roads, they're changing dramatically.

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Speaker 1: UM And for those who don't know, READS stands for

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Speaker 1: real Estate Investment Trust and it's sort of a way

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Speaker 1: to buy an et F. And then you know, indirectly

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Speaker 1: or directly rather I guess own UM properties and they

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Speaker 1: could be anything from like retail properties, malls, storage, industrial infrastructure, hotels, uh,

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Speaker 1: stuff you wouldn't buy as a regular person typically. And

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Speaker 1: also they yield a lot because they have a certain

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Speaker 1: structure where they have to pass on a lot of

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Speaker 1: their income, and so we have rates rising, which is

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Speaker 1: a threat to them. But then at the same time

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Speaker 1: rates are still low. And so I thought there's a

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Speaker 1: lot of crossroads going on in the Reek category and

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Speaker 1: we could maybe unpack it and talk about, you know,

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Speaker 1: the pros and cons of all of the different products.

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Speaker 1: You basically get to own real estate without really owning

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Speaker 1: real estate. Yeah, I mean, I guess you basically just

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Speaker 1: click a button and it's you're pulled in with a

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Speaker 1: bunch of investors who are common owners of, you know,

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Speaker 1: real estate properties. And one thing I hope to get

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Speaker 1: out today is to get some visual on what exactly

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Speaker 1: you are owning. I mean, I can see the words, Hey,

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Speaker 1: now I own residential and hotel reads, but where are

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Speaker 1: these hotels? What do they do? Um? You know, I

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Speaker 1: think that sometimes is lost, but yeah, you do end

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Speaker 1: up owning these things. And to help us wade through

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Speaker 1: the category, we're gonna be joined by Kevin Kelly at

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Speaker 1: Benchmark invest and David our back at World at Greek Group,

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Speaker 1: this time on Trillians the Red Stuff. David Kevin, welcome

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Speaker 1: to Trillions. Thanks for having us, Thank you for having us. David,

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Speaker 1: I want to start with you, Um, why why should

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Speaker 1: we be talking about reads right now? What are these

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Speaker 1: good for? Well? I can tell you right now that

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Speaker 1: this is not going to be a sexy conversation like

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Speaker 1: tt slaw and bitcoin and buzzy t F. But when

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Speaker 1: you talk about reads, they provide one thing that is

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Speaker 1: common in times of volatility, and that's safety, dividend income stability,

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Speaker 1: high pay at ratio by these companies. You're you're getting

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Speaker 1: almost like an annuity or like a long term bond

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Speaker 1: when you're buying some of these companies. And as Kevin

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Speaker 1: can attest to looking at the long term holdings of

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Speaker 1: some of these companies, you're just going along for the

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Speaker 1: ride and letting these companies do what they do best.

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Speaker 1: Let's just take one second, David, to just bring in

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Speaker 1: somebody who knows almost nothing. Explain what a red is

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Speaker 1: and why the income is high like that structure that

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Speaker 1: I alluded to earlier. Just explain that whole concept. Sure, So,

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Speaker 1: as you said to read is a real estate investment trust.

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Speaker 1: A real estate investment trust is a shell that you

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Speaker 1: would own a property, a portfolio of real estate, and

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Speaker 1: as you mentioned, that's office building's, apartment properties, hotel, self storage.

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Speaker 1: The list goes on and on with the way that

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Speaker 1: a reat is structured of the net income is paid

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Speaker 1: out to shareholders in the term of dividends or in

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Speaker 1: the form of dividends, and so as a result, off

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Speaker 1: the bat, in fact, many of these guys are paying

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Speaker 1: out monthly dividends, and so right off the bat, you're

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Speaker 1: getting a huge income component because the typical average dividend

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Speaker 1: yield right now, according to a reads around four to

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Speaker 1: four and a half percent, and with the tenure, which

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Speaker 1: is its closest benchmark, trading around one point six, let's

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Speaker 1: say right now, you know you still have about three

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Speaker 1: hundred basis points in your pocket that you're being paid

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Speaker 1: by these companies to own this high quality real estate.

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Speaker 1: Taking a step further, another really interesting way to play,

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Speaker 1: that's through the preferred stack. And if you played the

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Speaker 1: red preferreds, then you're looking at yields anywhere from where

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Speaker 1: public starch has the lowest let's say a sub three

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Speaker 1: or excuse me, a sub four. You know, quality names

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Speaker 1: are yielding around five percent and higher yield stuffs going

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Speaker 1: six to seven and higher, so you know it's there's

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Speaker 1: just a huge buffer there for reachs in your favor

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Speaker 1: And David, can you tell us what you do at

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Speaker 1: a world that Grete group? Sure? So I'm lucky. I've

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Speaker 1: extraddle a lot of worlds. I'm an institutional all UH

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Speaker 1: sales trader at World Equity Group. I've been in the

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Speaker 1: red industry for over twenty years. I got my start

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Speaker 1: at a firm called Green Street Advisors now known as

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Speaker 1: Green Street. So for me now World Equity Group, I

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Speaker 1: am trading reads. I am doing corporate access with a partner,

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Speaker 1: working on management relationships. We're doing new share issuance working

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Speaker 1: with some of these reads. Really it kind of spreads

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Speaker 1: expansive globe. I also work on a red newsletter at

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Speaker 1: Daily Newsletter. UM, there's just so much information that's out there,

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Speaker 1: and with you know, a hundred sixty plus publicly traded

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Speaker 1: equity reads, not counting the mortgage side, there's a lot

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Speaker 1: of information to digest on a daily basis and won't

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Speaker 1: get through more than that. As we go through this,

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Speaker 1: and Kevin, I want to bring you into this, UM.

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Speaker 1: You know, I've bumped into you a lot over the past,

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Speaker 1: like I don't know, eight nine years really, especially at

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Speaker 1: the Bloomberg TV studio. You're always in there doing the

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Speaker 1: options segment and whatnot. Before we get into some of

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Speaker 1: the E t s Just what are you up to

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Speaker 1: these days? So today, but I'm really up to is

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Speaker 1: trying to give investors access to specific property types and

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Speaker 1: specific exposure, especially in the real estate market. And so

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Speaker 1: if you look at my what I do on a

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Speaker 1: core level, it's actually look at the real estate universe

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Speaker 1: and then delineate which actual companies are are doing on

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Speaker 1: their property type, tenant type, and uh, you know, revenue type.

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Speaker 1: And so what we do is we make indexes off

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Speaker 1: of that, and then we license those indexes to e

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Speaker 1: t F issuers. And so what you'll see is that

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Speaker 1: the top two property type E t F that are

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Speaker 1: out there were the index provider to those. You have

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Speaker 1: some new um cutting edge kind of indexes that are

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Speaker 1: tracked by E t F s. So but let's do

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Speaker 1: this in order to again keep this high level at

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Speaker 1: least for now. If you look at the re E

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Speaker 1: t F category, which has seventy two billion, by the way,

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Speaker 1: it is, it's one of the bigger sectors. V n

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Speaker 1: Q has half the assets. That's the Vanguard re E

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Speaker 1: t F. It's one of those rare vanguard ETF that's

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Speaker 1: the biggest in the category and the most traded. Um

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Speaker 1: it's a monster. So, Kevin, why don't you take V

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Speaker 1: n Q explain that one and the general you know,

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Speaker 1: I guess broad re E t F that vn Q

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Speaker 1: kind of represents versus some of the newer stuff. Yeah,

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Speaker 1: So the way you should look at the re D

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Speaker 1: t F market is V and Q is the big behemoth.

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Speaker 1: And what that does is it gives access to investors

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Speaker 1: to own broad based real estate. It owns everything all

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Speaker 1: at once. You're gonna own every publicly traded shopping mall,

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Speaker 1: You're gonna own every publicly traded UH hotel, you're gonna

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Speaker 1: own every publicly traded apartment company. You're gonna own every

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Speaker 1: publicly traded office building in the problem with that is,

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Speaker 1: in my opinion, is that property types trade differently. So

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Speaker 1: an office is going to perform differently than a retail

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Speaker 1: shopping center, than a hotel, than a data center. And

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Speaker 1: so what you're getting is you're getting the broad basis

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Speaker 1: like owning the all World Index when it comes to

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Speaker 1: E t S, right, So you're owning every single country

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Speaker 1: and every single company and so that's what V and

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Speaker 1: Q does, and really what it's meant to do is

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Speaker 1: to give broad based exposure to asset allocators. It's also

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Speaker 1: a passive index. And so if you look at the

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Speaker 1: bigger picture as far as like COVID is an example

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Speaker 1: in the work from home trade versus the return to

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Speaker 1: office trade, Let's say V and Q may even though

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Speaker 1: it's still invested in office and hotels and malls in

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Speaker 1: an active situation, an active red e t F guy

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Speaker 1: would have been out of those sectors in the second

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Speaker 1: quarter of last year and overweight single family rental reads,

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Speaker 1: tower reads, data center reads. The zoom trade basically for

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Speaker 1: reat land. And so now what we're seeing is the

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Speaker 1: reverse where there's two camps, this zoom trade still being

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Speaker 1: on and then returned off his trade, right some of

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Speaker 1: the more aggressive pms that are putting back on the hotels,

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Speaker 1: the offices and the retail trade. Just as just as

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Speaker 1: a point of clarification, well, and to that end, David,

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Speaker 1: what kind of innovation are we actually really seeing in

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Speaker 1: the category if if we've got the V n Q

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Speaker 1: and that's like the big umbrella of everything, like, talk

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Speaker 1: to us about what's been changing and what kind of

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Speaker 1: ETFs are are now at investor's fingertips. Sure absolutely, and frankly,

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Speaker 1: to Kevin's credit, he was one of the first guys

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Speaker 1: that was out there really finding the niche sectors well

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Speaker 1: ahead of the curve of some of the other guys

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Speaker 1: and all let Kevin go more into detail about his two,

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Speaker 1: but a couple of other unique plays. Um, you can

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Speaker 1: play the net lease read the net lease reads that

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Speaker 1: would be the guys like your quick service restaurants, the

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Speaker 1: Burger King's, McDonald's, Starbucks, Jim's drug stores, gas stations, and

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Speaker 1: that is run by some guys from a company called

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Speaker 1: Fundamental Income. The tick of that e t F is

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Speaker 1: any t L Nancy Edward Tom Larry, the two executives

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Speaker 1: that started that came from a company called store Capital,

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Speaker 1: which Warren Buffet and Berkshire Hathaways its largest shareholders. So

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Speaker 1: right off the bat, before we even get into net

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Speaker 1: least reads, when Warren Buffett is the largest shareholder of

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Speaker 1: one of these net least reads, if there's kind of

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Speaker 1: that Berkshire touch to it. Another interesting avenue is a

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Speaker 1: home builder's housing e t F. They housing one hundred

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Speaker 1: the homes h O m Z E t F. This

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Speaker 1: is comprised of residential self storage, lodging, anything home depot lows,

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Speaker 1: anything that has to do with the home owner space.

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Speaker 1: One more I want to touch upon is the newest

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Speaker 1: player and Eric, I think I'd love to get your

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Speaker 1: comments on that as we go through this. But the first,

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Speaker 1: really the one of the first active read e t

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Speaker 1: s has come to market. UM, there's a couple that

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Speaker 1: are out there, but from the g S excuse me,

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Speaker 1: from alps with G S I capitals, the subdvisors the

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Speaker 1: actual ticker r E I t read like I said,

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Speaker 1: which is the act the opposite act of read ets.

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Speaker 1: So there are several different unique rappers to play the

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Speaker 1: E t F space besides I Y R v n Q,

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Speaker 1: the big daddies of the sector. One of the reasons

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Speaker 1: we did want to also talk about this was that

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Speaker 1: um my colleague Morgen Varna back last year, UM at

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Speaker 1: the end of the year, she wrote about s r

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Speaker 1: VR and it was interesting. I actually learned a lot

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Speaker 1: from her note and she just really found that these

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Speaker 1: towers and data centers, which again are not tended not

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Speaker 1: to be in the traditional re E t F s,

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Speaker 1: we're a real source of return at the time. UM

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Speaker 1: and you know sr VR has like thirty in those respectively,

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Speaker 1: whereas v n Q is more like eight and and

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Speaker 1: and again this parallel you see it everywhere. Every category

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Speaker 1: has a couple of ETFs that are just tip of

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Speaker 1: the spear. They're going to these places that you're not

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Speaker 1: getting otherwise. Otherwise, why would the launch an e t

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Speaker 1: F if you can get it in v n Q.

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Speaker 1: So talk about the tower day a center angle here

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Speaker 1: and what that's what's going on. Yeah, So I think

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Speaker 1: it's really important to note that as you know the

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Speaker 1: overall read market has evolved, you've seen new property types.

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Speaker 1: And two of those new property types are data centers

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Speaker 1: and cell phone towers, and so they're non traditional and

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Speaker 1: they're actually growing pretty significantly because, as you see, we're

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Speaker 1: digitizing our daily lives. And so when the pandemic happened,

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Speaker 1: you actually saw two big beneficiaries in the real estate

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Speaker 1: market where you actually had visibility of cash flows, and

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Speaker 1: that was the data centers and cell phone towers. Why

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Speaker 1: because everyone was working from home, everyone was doing school

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Speaker 1: from home, and so these two property types were really, uh,

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Speaker 1: the the frontline defense for everybody in their daily lives. Right,

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Speaker 1: It's like everyone was using the internet more and more

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Speaker 1: and more for personal and professional use. And so when

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Speaker 1: you look at what s r V, the s r

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Speaker 1: VR in DEX does because it gives you pure play

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Speaker 1: access to those property types. And so what we're seeing

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Speaker 1: is a lot of technology investors are using s r

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Speaker 1: VR to complement it with their cybersecurity exposure, with their

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Speaker 1: cloud exposure, with their semiconductors, because it does have the

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Speaker 1: growth of technology, but with the safety and security of

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Speaker 1: real estate. And so that's why you're seeing a lot

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Speaker 1: of adoption with the s r VR index constituents and

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Speaker 1: advisors and investors portfolios. So this brings up an interesting point,

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Speaker 1: which is because I'm looking at s r VR and

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Speaker 1: that's a great pitch for it, and I think, you know,

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Speaker 1: the returns UM show that, but the yield is really

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Speaker 1: small relative to other re et F s. I have

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Speaker 1: one point six percent for a twelve month yield, whereas

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Speaker 1: v n Q is about double that um. Can you

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Speaker 1: talk a little bit about that trade off? And you

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Speaker 1: a lot of free e t P E t F

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Speaker 1: s are used for income you're making. You're like, you're

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Speaker 1: basically trying to make a whole different case, is that right? Yeah,

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Speaker 1: So the reason why you'll see a lower yield on

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Speaker 1: that is because the and it's called s r VR

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Speaker 1: because it's it stands for server because computer servers are

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Speaker 1: rendered useless without the mission critical assets that server index provides.

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Speaker 1: So the whole idea here is when you look at this,

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Speaker 1: what are you trying to gain from this exposure? And

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Speaker 1: that's growth. You're not trying to get income. And so

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Speaker 1: that's what really differentiates it from a V and Q

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Speaker 1: because if you look at what the actual management teams

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Speaker 1: are doing on the data center and cell phone tower side,

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Speaker 1: they're developing right so they're building as much as they

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Speaker 1: can right now, and so they're using a lot of

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Speaker 1: their cash and assets to develop and build. So you're

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Speaker 1: going to get a lower yield, but you're going to

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Speaker 1: get higher growth. And that's the nice aspect. If you

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Speaker 1: want income, go get income else where. If you want growth,

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Speaker 1: your your you you you've got it. You've got a

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Speaker 1: perfect portfolio here where you can get that aspect. So

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Speaker 1: David as a watch of this space, and you know

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Speaker 1: someone who gives Kevin a lot of credit for what

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Speaker 1: he's done, and especially with s r VR. What perspective

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Speaker 1: do you have on on what what he's been sort

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Speaker 1: of accomplishing there and and the stuff to watch in

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Speaker 1: that space. Kevin mentioned about the tower reachs and data

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Speaker 1: center reaches a growth play, and a couple of my

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Speaker 1: favorite statistics goes back to a conference from a couple

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Speaker 1: of years ago. The former CEO of American Tower, his

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Speaker 1: name was Jim Tassel, he left to go to the

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Speaker 1: CEO of Lockheed Martin. He made a great data point

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Speaker 1: and it's really resonated with me. Knowing that the state

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Speaker 1: of points about two years old, just in the back

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Speaker 1: of your mind, know that it's gone up. And the

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Speaker 1: point was, did you know, wait for the dramatic plause,

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Speaker 1: that there's only four hours of video posted to YouTube

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Speaker 1: every minute. That's as of a couple of years ago.

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Speaker 1: So think about how that number has only increased. As

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Speaker 1: Kevinist stated, we're digesting this content on our phones, are tablets,

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Speaker 1: every single way that we can more and more. We're

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Speaker 1: doing this conversation by way of a zoom. There's that

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Speaker 1: demand for bandwidth. If you go read the Tower and

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Speaker 1: Data Center transcripts. One more thing to add is their

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Speaker 1: growth is not here domestically, Their growth is overseas. These

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Speaker 1: guys are making a huge push in the Indias and

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Speaker 1: Africa's and Europe's that some of these countries aren't even

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Speaker 1: on three G technology yet in the same breath, these

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Speaker 1: companies are working on the next six G evolution. What

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Speaker 1: does that mean? As far as does that mean it's

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Speaker 1: gonna be real time while I'm watching this movie, it's

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Speaker 1: almost like I'm watching a live event. I don't know,

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Speaker 1: but our content is only going up and up that

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Speaker 1: we're using this and so again, the datas and towers

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Speaker 1: is an income play. Necessarily, it is a growing sector.

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Speaker 1: And you know, you ask anybody in the industry, I

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Speaker 1: don't know the answer to this. But if you say,

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Speaker 1: what what ending of development are we in and the

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Speaker 1: towers and datas, my gut tells me a lot of God,

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Speaker 1: I'm gonna tell you we're still in the early ending

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Speaker 1: stages of the tower and data center, please not the

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Speaker 1: not the later innings. Yeah, And I think that case

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Speaker 1: is made pretty effectively. Um and that that would be

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Speaker 1: It's almost like Kevin, You're you're almost making a pitch

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Speaker 1: for a theme etf for a new industry. Whereas I

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Speaker 1: want to bring it back real quick to just general

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Speaker 1: read E t f s that are a little more traditional,

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Speaker 1: like van Q and the Schwab and I shares um

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Speaker 1: read E t f s David, How sensitive are they too? Rates?

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Speaker 1: The tenure is rising? Um? Is this? What about timing wise?

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Speaker 1: Would you wait for the rates to rise a little

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Speaker 1: more um as an entry point? How do you work

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Speaker 1: in rates to your decision on investing in reads traditional

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Speaker 1: ones traditionally, I honestly don't know if it's that much

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Speaker 1: of an event against some of these reads, the big

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Speaker 1: the big cap guys, the SMP five names, They've been

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Speaker 1: around for so long and have dealt with so much

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Speaker 1: volatility and interest rates, and I don't think it impacts

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Speaker 1: them so much. Eric, to be quite honest, you know

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Speaker 1: one point six tenuere environment. You know, if they went

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Speaker 1: to three percent, yeah we got some problems and we're

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Speaker 1: gonna be freaking out. But if you remember back last

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Speaker 1: year when everybody was talking about the tend to yield

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Speaker 1: curve and version and everybody was all freaking out about that.

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Speaker 1: Obviously again with COVID all the other hiccups that are

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Speaker 1: in the market, but you know, really what happens is

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Speaker 1: reads bounced back pretty quickly. That trade, the COVID trade

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Speaker 1: for the reach sector disappeared in about a month. Looking

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Speaker 1: at the prefers and everything that that windows shrunk in

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Speaker 1: about a month. So really, I think in the grand

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Speaker 1: scheme of things right now, I think the reads are

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Speaker 1: shaking off the interest rate concerns in the grand scheme

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Speaker 1: of things. I have a couple of thoughts on that,

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Speaker 1: and I think there's there's stats that people should really

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Speaker 1: be aware of. And the first one comes from nay

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Speaker 1: Read and they've actually looked at a rising interest rate

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Speaker 1: environment and how did broad based reats perform And according

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Speaker 1: to the research, fifty four percent of the time when

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Speaker 1: rates are rising, reats outperformed the SMP five hundred and

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Speaker 1: so I think that's pretty significant. And the question you

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Speaker 1: need to ask is why, And it's because rents rose

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Speaker 1: faster than rates, and so you want to focus on

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Speaker 1: rising rents, not rising rates, and that's the most important thing.

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Speaker 1: So if the economy is getting better, you're gonna see

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Speaker 1: rents go up faster than rates do and that is

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Speaker 1: a huge tail win for for reats in general. Okay,

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Speaker 1: so let's keep talking about that. Because here we are,

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Speaker 1: vaccination is happening, at least in the US at a

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Speaker 1: pretty rapid clip. We could we could actually be uh

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Speaker 1: in a version of of normal again before long. So

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Speaker 1: what does the read industry look like post COVID, especially

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Speaker 1: like in regards to things like malls, now that we've

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Speaker 1: we've all transitioned to this this world where everything can

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Speaker 1: kind of go remote, Like, what roll could the read

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Speaker 1: industry kind of look like post COVID? I think the

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Speaker 1: read industry is going to do exceptionally well post COVID

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Speaker 1: for several reasons. One is their actual structure. So we

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Speaker 1: taught touch base on it before. But what they're gonna

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Speaker 1: do is come out of this pandemic leaner and meaner. Right,

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Speaker 1: So they're gonna have stronger balance sheets. Uh they've done,

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Speaker 1: They've basically right sized uh their entire portfolios. There's been

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Speaker 1: a lot of asset dispositions. They can work with state,

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Speaker 1: local municipalities to do some redevelopment. And so what I

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Speaker 1: think is going to happen is post pandemic, what you

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Speaker 1: will see is you will see a lot of reads

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Speaker 1: be opportunistic because they have most of them are investment grade.

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Speaker 1: They've got great balance sheets, so they're gonna be able

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Speaker 1: to buy a lot of the distressed assets. Why, because

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Speaker 1: of their financial flexibility, they can issue read preferred airs,

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Speaker 1: they can actually issue shares into the secondary market and

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Speaker 1: raise money. And so what's nice about it is they

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Speaker 1: are known entities. The management teams are are very well known.

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Speaker 1: They've been around for a long time, so they have

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Speaker 1: a huge advantage to take uh to to to be

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Speaker 1: opportunistic going forward. And same question to you, David, like,

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Speaker 1: what what do you think post COVID reats are gonna

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Speaker 1: look like? Yeah, I echo a lot of what Kevin said,

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Speaker 1: you know, going back to the housing crisis or the

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Speaker 1: financial crisis wo nine, twelve thirteen. For some of these guys,

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Speaker 1: reachs traditionally learn from historical events. So from the O

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Speaker 1: Way oh nine financial crisis, a lot of the reds

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Speaker 1: decided to go less leverage equals the better position. They

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Speaker 1: diversified their tenant base, they just became stronger and stronger

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Speaker 1: to combat the you know, financial pitfalls that were thrown

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Speaker 1: at them. So to answer your question post COVID, I

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Speaker 1: think a lot of folks are going to continue to leaner.

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Speaker 1: Meter if you were having troubles before COVID, You're probably

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Speaker 1: not going to survive after COVID. A lot of these

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Speaker 1: guys could go back and read their transcripts. They had said,

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Speaker 1: we've spent this period developing, improving, managing our relationships, growing

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Speaker 1: our tenant base. They're trying to get, you know, stronger

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Speaker 1: relationships with their existing tenants. You know, traditionally you think about,

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Speaker 1: let's use a net least read as an example. If

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Speaker 1: they do a deal with the Dollar general, it's not

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Speaker 1: just one property that they're talking about. You're talking net

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Speaker 1: least properties so that they're dealing with. So I think

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Speaker 1: it's just going to improve relationships across the specter um.

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Speaker 1: But then you're also going to see newer plays come out,

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Speaker 1: like as we're seeing with the growth of cannabis as

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Speaker 1: an example, there's several cannabis replays that are out there.

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Speaker 1: Um are ready to see a whole slew of new

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Speaker 1: red et s come to market. I don't know. I

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Speaker 1: leave that to my my friendly Bloomberg read e t

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Speaker 1: F analysts, My Bloomberg ETF analysts answer that question. But

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Speaker 1: I think that the reefs, you know, there's an expression

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Speaker 1: and trading volatility equals opportunity. And I think that really

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Speaker 1: holds true for the read guys right now that they're

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Speaker 1: you know, look at Simon Property Group is a prime example.

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Speaker 1: Simon Property Group has been extremely active during COVID. They

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Speaker 1: acquired authentic brands, Lucky Jeans, Brooke Brothers, Oh, and they

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Speaker 1: bought another mall, Rate and Tommins Centers and so where

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Speaker 1: people said, oh, the mall is dead, the mall is dead.

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Speaker 1: David Simon and the team are like, no, it's not.

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Speaker 1: Look what we're doing here. Let me come in here

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Speaker 1: with this idea and bring it back to the beginning.

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Speaker 1: We talked about everybody likes investing in real estate. I

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Speaker 1: think you know, they got their house, they like to

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Speaker 1: see it go up minus like the late two thousand's

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Speaker 1: which I bought a condo in two thousand six. Remember

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Speaker 1: the mortgage agent was like, oh, yeah, this will double,

430
00:23:44,640 --> 00:23:47,200
Speaker 1: like it was that normal that your property would double

431
00:23:47,240 --> 00:23:50,879
Speaker 1: in every year. Um, and it's I sold it for

432
00:23:50,920 --> 00:23:54,960
Speaker 1: the same price like fifteen years later because I bought

433
00:23:54,960 --> 00:23:58,840
Speaker 1: it right anyway, that win, didn't you. Yeah, I mean

434
00:23:59,320 --> 00:24:00,919
Speaker 1: my wife just wanted to get rid of it. I

435
00:24:00,920 --> 00:24:02,679
Speaker 1: was like, it's it might still go up, and we

436
00:24:02,720 --> 00:24:05,520
Speaker 1: just we cut the dead weight. But anyway, my story aside,

437
00:24:05,560 --> 00:24:08,760
Speaker 1: I do like real estate, like owning something physical. This

438
00:24:09,400 --> 00:24:11,960
Speaker 1: just trying to explain to me, you know, and institutions

439
00:24:12,000 --> 00:24:14,800
Speaker 1: are known for implying the Yale model, which is about

440
00:24:14,840 --> 00:24:18,040
Speaker 1: buying less liquid assets, which could be actual real estate

441
00:24:18,400 --> 00:24:21,000
Speaker 1: where they go in on a land deal or farmland

442
00:24:21,080 --> 00:24:25,600
Speaker 1: or something. These are equities. How much of that thing

443
00:24:25,680 --> 00:24:30,520
Speaker 1: where you own physical property is water water down as

444
00:24:30,560 --> 00:24:33,719
Speaker 1: you go through the equity, the public equity system, and

445
00:24:33,760 --> 00:24:36,439
Speaker 1: now I own it through a reat. Just can you

446
00:24:36,480 --> 00:24:40,000
Speaker 1: explain that difference between owning it in a public equity

447
00:24:40,119 --> 00:24:42,920
Speaker 1: versus like the real deal. Sure, I'm going to push

448
00:24:42,920 --> 00:24:45,720
Speaker 1: back at you a little bit because to use the

449
00:24:45,800 --> 00:24:49,639
Speaker 1: single family rentals as an example. You know, several of

450
00:24:49,640 --> 00:24:53,240
Speaker 1: the big saw side firms, the JP Morgan's of the world,

451
00:24:53,240 --> 00:24:55,720
Speaker 1: the Goldman Sachses of the World, Bank of America all

452
00:24:55,800 --> 00:25:01,040
Speaker 1: last year announcing single family rental um partner ships that

453
00:25:01,080 --> 00:25:04,120
Speaker 1: they're launching their own single family rental platforms to compete

454
00:25:04,160 --> 00:25:06,720
Speaker 1: against the invitation homes in the American homes for rent,

455
00:25:06,720 --> 00:25:08,400
Speaker 1: the public and trade of reads that are out there.

456
00:25:08,720 --> 00:25:11,359
Speaker 1: So there are guys that are sinking direct money into

457
00:25:11,480 --> 00:25:14,280
Speaker 1: real estate away from the reach structure. But when I

458
00:25:14,440 --> 00:25:19,200
Speaker 1: buy a share of Boston properties, you're buying a share

459
00:25:19,280 --> 00:25:23,000
Speaker 1: of high quality real estate across New York, San Francisco,

460
00:25:23,040 --> 00:25:26,920
Speaker 1: across the country. Do I necessarily can I walk into

461
00:25:27,880 --> 00:25:30,399
Speaker 1: the GM building and say, I'm a shareholder, let me

462
00:25:30,480 --> 00:25:34,159
Speaker 1: up to this top four? No, But in the same breath,

463
00:25:34,560 --> 00:25:37,080
Speaker 1: you know your own. There's only one New York City,

464
00:25:37,200 --> 00:25:40,080
Speaker 1: there's only one, you know, GM building. They're not going

465
00:25:40,119 --> 00:25:42,480
Speaker 1: to tear it down anytime soon. The last time I recall,

466
00:25:42,600 --> 00:25:47,080
Speaker 1: that building is worth a couple billion with a B dollars.

467
00:25:47,400 --> 00:25:50,639
Speaker 1: And so therefore I can say I have a tangible stake.

468
00:25:50,880 --> 00:25:55,199
Speaker 1: Granted's one share of the GM building. Um so I

469
00:25:55,240 --> 00:25:58,600
Speaker 1: think that they're you know, there's that name association. A

470
00:25:58,640 --> 00:26:02,399
Speaker 1: great other examples the Empire State Building, Empire State Realty Trust.

471
00:26:02,440 --> 00:26:04,920
Speaker 1: If I own Empire State Realty Trust, I own the

472
00:26:04,920 --> 00:26:08,280
Speaker 1: Empire State Building. That's a historical landmark. There's only one

473
00:26:08,359 --> 00:26:10,960
Speaker 1: Empire State Building. You're not going to tear it down

474
00:26:11,000 --> 00:26:13,399
Speaker 1: and rebuild it. And they always say they're not growing

475
00:26:13,400 --> 00:26:16,120
Speaker 1: more land. One other interesting play eric one other name

476
00:26:16,160 --> 00:26:18,560
Speaker 1: to mention too is a company called Safehold and the

477
00:26:18,560 --> 00:26:21,280
Speaker 1: ticker of that is s a FE. The only reason

478
00:26:21,359 --> 00:26:24,280
Speaker 1: why I mentioned that is they are a ground lease

479
00:26:24,440 --> 00:26:27,080
Speaker 1: rate that they're selling points a little bit about what

480
00:26:27,119 --> 00:26:30,160
Speaker 1: you're talking about, that you're owning a ninety nine year

481
00:26:30,320 --> 00:26:33,880
Speaker 1: ground lease of let's say the GM building as an example,

482
00:26:33,880 --> 00:26:35,840
Speaker 1: they're just going to go in and buy the underlying

483
00:26:36,000 --> 00:26:38,920
Speaker 1: land of the property and let the building owner focus

484
00:26:39,040 --> 00:26:41,679
Speaker 1: on owning the building. So there's a couple of unique

485
00:26:41,680 --> 00:26:46,960
Speaker 1: ways to actually play the actual property structure. Eric, if

486
00:26:47,000 --> 00:26:49,320
Speaker 1: I could, I want to answer your question you were taught.

487
00:26:49,480 --> 00:26:51,840
Speaker 1: I think at the core of your question was how

488
00:26:51,920 --> 00:26:56,119
Speaker 1: much dilution is there from actually owning a property versus

489
00:26:56,160 --> 00:26:59,400
Speaker 1: owning a reet and so where's the dilution in that?

490
00:26:59,560 --> 00:27:04,159
Speaker 1: And the answer is reates are exactly what they sound like.

491
00:27:04,240 --> 00:27:07,560
Speaker 1: It's a real estate investment trust. So it's an accumulation

492
00:27:07,640 --> 00:27:10,359
Speaker 1: of properties. It's just like an e t F so

493
00:27:10,520 --> 00:27:13,800
Speaker 1: E t F S is an accumulation of securities and

494
00:27:13,840 --> 00:27:16,560
Speaker 1: then it trades sort of at its net asset value.

495
00:27:16,880 --> 00:27:20,119
Speaker 1: The same thing holds true for real estate investment trust.

496
00:27:20,440 --> 00:27:24,000
Speaker 1: It's just an accumulation of properties and then what those

497
00:27:24,000 --> 00:27:27,560
Speaker 1: properties are valued at on the exchange and so you know,

498
00:27:27,640 --> 00:27:30,439
Speaker 1: obviously they do have some debt that's associated with it

499
00:27:30,520 --> 00:27:33,520
Speaker 1: on their balance sheets, but you're an actual shareholder in

500
00:27:33,600 --> 00:27:36,360
Speaker 1: every single one of those properties that they own, So

501
00:27:36,800 --> 00:27:40,400
Speaker 1: you're owning equity in those actual buildings that they own.

502
00:27:40,480 --> 00:27:44,320
Speaker 1: So it is a portfolio of real estate that you own,

503
00:27:44,520 --> 00:27:48,399
Speaker 1: and so there really isn't much dilution. UH. You just

504
00:27:48,440 --> 00:27:51,360
Speaker 1: have hired these management teams to run, own and operate

505
00:27:51,440 --> 00:28:01,920
Speaker 1: these buildings or properties that that that are in the reade.

506
00:28:02,040 --> 00:28:03,879
Speaker 1: One thing that I find really interesting here is like

507
00:28:04,920 --> 00:28:07,760
Speaker 1: because of what you've been able to do and others

508
00:28:07,760 --> 00:28:10,000
Speaker 1: in this space, it's like you can be you know,

509
00:28:10,080 --> 00:28:12,919
Speaker 1: we talked about thematic ETFs a lot, Like basically it

510
00:28:12,960 --> 00:28:17,439
Speaker 1: sounds like there's like hyper focus focused UH strategies that

511
00:28:17,520 --> 00:28:20,199
Speaker 1: you can basically get into as an investor. So so

512
00:28:20,359 --> 00:28:22,960
Speaker 1: because the space has not only that, but then you

513
00:28:23,000 --> 00:28:24,800
Speaker 1: know the V and Q s that have a little

514
00:28:24,800 --> 00:28:27,560
Speaker 1: bit of everything in it. Like as like a as

515
00:28:27,600 --> 00:28:29,719
Speaker 1: an investor who does might not know this space, Like

516
00:28:30,080 --> 00:28:32,159
Speaker 1: what are the questions that you need to be asking

517
00:28:32,200 --> 00:28:35,160
Speaker 1: when you when you get into this stuff. Yeah, so

518
00:28:35,880 --> 00:28:38,240
Speaker 1: I think the most important thing to know is what

519
00:28:38,440 --> 00:28:41,200
Speaker 1: is what are the drivers of the Z T F

520
00:28:41,280 --> 00:28:43,880
Speaker 1: S right, and so we talked about s R v R.

521
00:28:44,080 --> 00:28:46,720
Speaker 1: That's a play on you know, every device being connected

522
00:28:46,720 --> 00:28:49,320
Speaker 1: to the internet. When I look at the other uh,

523
00:28:49,760 --> 00:28:52,120
Speaker 1: the other one, which is I N D S, it's

524
00:28:52,120 --> 00:28:55,440
Speaker 1: industrial real estate. Well, well, what is the driver of that?

525
00:28:55,560 --> 00:28:59,120
Speaker 1: It's e commerce? Right. The Amazon CFO said himself he

526
00:28:59,160 --> 00:29:01,760
Speaker 1: needs fifty percent more real estate than he has today

527
00:29:01,840 --> 00:29:04,360
Speaker 1: just to meet current demand. So it owns all the

528
00:29:04,400 --> 00:29:06,840
Speaker 1: distribution centers that get you your package in a day

529
00:29:06,920 --> 00:29:10,080
Speaker 1: or less. So say David was to buy something from

530
00:29:10,160 --> 00:29:13,240
Speaker 1: Lows and it gets delivered to him in two hours, right,

531
00:29:13,240 --> 00:29:16,280
Speaker 1: it's coming from the distribution center. So so so e

532
00:29:16,360 --> 00:29:19,480
Speaker 1: commerce is driving that. If you look at another one,

533
00:29:19,520 --> 00:29:23,360
Speaker 1: homes we mentioned earlier, it's the consumer that's driving it

534
00:29:23,400 --> 00:29:27,720
Speaker 1: because it's based off of you know, um, the consumer

535
00:29:27,800 --> 00:29:32,120
Speaker 1: owning homes. So it's home builders and owns some some

536
00:29:32,720 --> 00:29:35,520
Speaker 1: residential reads. And so you have to look at the

537
00:29:35,600 --> 00:29:38,680
Speaker 1: drivers behind it. Right, So broad based real estate will

538
00:29:38,720 --> 00:29:41,320
Speaker 1: be sort of a play on the economy. That's why

539
00:29:41,360 --> 00:29:44,959
Speaker 1: when you saw in the first quarter of you know,

540
00:29:46,120 --> 00:29:48,680
Speaker 1: broad based real estate I think was down some twenty

541
00:29:48,720 --> 00:29:51,760
Speaker 1: one cent right, So it's sold often sentiment with the

542
00:29:51,800 --> 00:29:54,480
Speaker 1: market because it was a reflection of the economy. So

543
00:29:54,600 --> 00:29:56,520
Speaker 1: that's what you really need to look at. Where are

544
00:29:56,520 --> 00:29:59,480
Speaker 1: the drivers of this going forward? So you know, I

545
00:29:59,600 --> 00:30:02,240
Speaker 1: anice to pay, there's gonna be a hotel et F

546
00:30:02,440 --> 00:30:04,600
Speaker 1: coming out within the next month. What it's going to

547
00:30:04,680 --> 00:30:07,080
Speaker 1: be the drivers of that. It's gonna be the reopening.

548
00:30:07,400 --> 00:30:09,640
Speaker 1: That's that's really what's gonna drive it, right, It's not

549
00:30:09,680 --> 00:30:11,880
Speaker 1: gonna it's you know, initially it's going to be that,

550
00:30:11,960 --> 00:30:14,880
Speaker 1: but then it's also going to be focused on businesses

551
00:30:15,000 --> 00:30:18,840
Speaker 1: going back to conventions and consumers actually going out and

552
00:30:18,880 --> 00:30:25,200
Speaker 1: do doing leisure vacations. So it's it's the fundamental underpinnings

553
00:30:25,240 --> 00:30:27,320
Speaker 1: of that that you need to look at the drivers.

554
00:30:27,320 --> 00:30:30,440
Speaker 1: And that's how you play these quote unquote themes within

555
00:30:30,560 --> 00:30:34,280
Speaker 1: real estate. Um, real quick, you know, you just sort

556
00:30:34,280 --> 00:30:36,120
Speaker 1: of hinted at a at a new filing and I

557
00:30:36,160 --> 00:30:39,080
Speaker 1: think in generally you have a lot of liberty and

558
00:30:39,160 --> 00:30:41,160
Speaker 1: being able to talk about the e t f s

559
00:30:41,240 --> 00:30:44,880
Speaker 1: that your index is track. Um, you're kind of like

560
00:30:45,000 --> 00:30:48,160
Speaker 1: Dave Portnoy of the Reeds, and you bring up a

561
00:30:48,160 --> 00:30:52,440
Speaker 1: good point because Portnoy is the from the index company

562
00:30:52,480 --> 00:30:55,120
Speaker 1: of the new buzzy TF and there was a lot

563
00:30:55,120 --> 00:30:58,600
Speaker 1: of people questioning how he could be so dramatically bold

564
00:30:58,680 --> 00:31:02,240
Speaker 1: with marketing the E T s because all either other

565
00:31:02,280 --> 00:31:04,160
Speaker 1: E T fishers were like, I could never say that,

566
00:31:04,240 --> 00:31:07,239
Speaker 1: compliance would hammer me. And he found this kind of

567
00:31:07,520 --> 00:31:09,040
Speaker 1: not a loophole, but it's just the way it is.

568
00:31:09,080 --> 00:31:12,800
Speaker 1: The index maker can say a lot more. And that's

569
00:31:12,800 --> 00:31:14,840
Speaker 1: what you are. You just talked about that difference between

570
00:31:14,840 --> 00:31:17,120
Speaker 1: the index maker and the e T f person. Yeah,

571
00:31:17,160 --> 00:31:19,120
Speaker 1: I think it's a great point to bring up, because

572
00:31:19,440 --> 00:31:21,960
Speaker 1: the important thing to note is you cannot directly invest

573
00:31:22,000 --> 00:31:24,760
Speaker 1: in an index. And so that's that's the caveat that

574
00:31:24,800 --> 00:31:27,360
Speaker 1: every index maker comes out there with and saying, hey,

575
00:31:27,400 --> 00:31:29,680
Speaker 1: this is a this is a portfolio. You actually can

576
00:31:29,800 --> 00:31:31,800
Speaker 1: invest in this. You would need to invest in a

577
00:31:31,800 --> 00:31:35,320
Speaker 1: product that seeks to track the performance of this index.

578
00:31:35,560 --> 00:31:38,240
Speaker 1: And so that's what he's really, uh, you know, hinging

579
00:31:38,400 --> 00:31:40,720
Speaker 1: his hat on is is saying, hey, listen, I'm talking

580
00:31:40,720 --> 00:31:43,160
Speaker 1: about this portfolio. You can invest in it. There is

581
00:31:43,200 --> 00:31:46,240
Speaker 1: a product that does track it, but you know, it's

582
00:31:46,320 --> 00:31:48,960
Speaker 1: up to those guys. And so the important thing to

583
00:31:49,040 --> 00:31:52,080
Speaker 1: note is that there are hundreds of thousands of millions

584
00:31:52,080 --> 00:31:55,000
Speaker 1: of billions of indexes out there. Bloomberg's got tons of them.

585
00:31:55,040 --> 00:31:57,160
Speaker 1: They don't have products that track them. You can go

586
00:31:57,240 --> 00:32:00,320
Speaker 1: out there, Eric and talk your heart's content and hype up,

587
00:32:00,360 --> 00:32:02,160
Speaker 1: but no one can invest in him because the product

588
00:32:02,160 --> 00:32:05,320
Speaker 1: doesn't track it. So I kind of laid the groundwork

589
00:32:05,360 --> 00:32:09,040
Speaker 1: for Dave Portoy, which is great because now he's testing

590
00:32:09,080 --> 00:32:12,680
Speaker 1: the thesis of of sort of what we can and

591
00:32:12,720 --> 00:32:16,680
Speaker 1: cannot say, and so I'll let him be the trail

592
00:32:16,720 --> 00:32:20,000
Speaker 1: blazer on that front. But you know, my my position

593
00:32:20,120 --> 00:32:23,720
Speaker 1: is I'm trying to provide investment intelligence to people out there.

594
00:32:23,760 --> 00:32:26,680
Speaker 1: I'm trying to get let them know about, you know,

595
00:32:26,920 --> 00:32:30,240
Speaker 1: different ways to think about investing and and and how

596
00:32:30,280 --> 00:32:31,600
Speaker 1: they can do it. A lot of times they talk

597
00:32:31,680 --> 00:32:35,680
Speaker 1: about the constituents within the portfolios. So hey, I say, hey,

598
00:32:35,720 --> 00:32:38,680
Speaker 1: here's here's the difference between American Tower and Crown Castle

599
00:32:38,720 --> 00:32:42,000
Speaker 1: and Server. Here's the difference between pro Logists and Duke Realty.

600
00:32:42,240 --> 00:32:43,720
Speaker 1: And so I can go out there and talk about

601
00:32:43,720 --> 00:32:47,400
Speaker 1: individual constituents and how they how they how how they

602
00:32:47,400 --> 00:32:50,960
Speaker 1: actually differentiate from each other, and why they serve a

603
00:32:51,040 --> 00:32:54,880
Speaker 1: purpose within the overall index itself. So, you know, I

604
00:32:54,920 --> 00:32:59,240
Speaker 1: think eventually the sec will come around and come up

605
00:32:59,280 --> 00:33:02,240
Speaker 1: with rules due to the fact that I think people

606
00:33:02,240 --> 00:33:05,360
Speaker 1: are going it's all. It always just takes a couple

607
00:33:05,360 --> 00:33:09,200
Speaker 1: of people to ruin it for everybody else, uh, in

608
00:33:09,320 --> 00:33:13,360
Speaker 1: certain things, so well, you know, to be honest, I

609
00:33:13,400 --> 00:33:15,440
Speaker 1: think the e t F fishers aren't allowed to like

610
00:33:15,440 --> 00:33:17,320
Speaker 1: they should be allowed to say more. I think somehow

611
00:33:17,320 --> 00:33:19,960
Speaker 1: there's a happy medium there. I hope it doesn't get

612
00:33:20,000 --> 00:33:22,720
Speaker 1: overly ruined. I do think though, you're going to see

613
00:33:22,720 --> 00:33:25,920
Speaker 1: more job postings from index issues or index companies for

614
00:33:26,480 --> 00:33:30,880
Speaker 1: communications people. Well, you know, the important thing is that

615
00:33:31,080 --> 00:33:33,840
Speaker 1: index providers are kind it's kind of you kind of

616
00:33:33,880 --> 00:33:37,040
Speaker 1: have these reverse roles in that E t f issuers

617
00:33:37,040 --> 00:33:39,280
Speaker 1: tend to be the ones at the forefront, forward thinking

618
00:33:39,280 --> 00:33:41,720
Speaker 1: and they've got they they they are the ones that

619
00:33:41,720 --> 00:33:43,760
Speaker 1: that would be able to push and say great things

620
00:33:43,800 --> 00:33:46,080
Speaker 1: and and do a lot of quote unquote hype as

621
00:33:46,120 --> 00:33:49,160
Speaker 1: Portnoy does. But the index providers are kind of slow

622
00:33:49,240 --> 00:33:52,440
Speaker 1: and steady. They're kind of archaic people, right, They're coming

623
00:33:52,480 --> 00:33:54,280
Speaker 1: up with no they're like the lab. Yeah, they're coming

624
00:33:54,360 --> 00:33:57,560
Speaker 1: up with classifics like the science lab. Yeah. Absolutely, that's

625
00:33:57,560 --> 00:34:00,440
Speaker 1: what I'm saying. I could see them hiring even see

626
00:34:00,440 --> 00:34:02,320
Speaker 1: the E t F fishure. We're saying, hey, let's take

627
00:34:02,400 --> 00:34:05,120
Speaker 1: this person here, like our Kevin Kelly, and we'll just

628
00:34:05,160 --> 00:34:09,319
Speaker 1: send them over to sele Active. Yeah yeah, and they'll

629
00:34:09,360 --> 00:34:11,160
Speaker 1: just and they'll just be able to say everything we

630
00:34:11,239 --> 00:34:13,399
Speaker 1: can't there you go. Yeah, I've had I've had other

631
00:34:13,400 --> 00:34:15,399
Speaker 1: issuers come to me and say, hey, can we hire you?

632
00:34:15,520 --> 00:34:18,880
Speaker 1: And you know, we'll do this index together. And but

633
00:34:18,960 --> 00:34:22,240
Speaker 1: you can go around with our wholesalers and talk about

634
00:34:22,280 --> 00:34:23,759
Speaker 1: it and do the whole thing. And so you talk

635
00:34:23,800 --> 00:34:26,640
Speaker 1: about the index, our wholesaler talks about this and and

636
00:34:26,640 --> 00:34:28,680
Speaker 1: and it'll be great. So you're actually kind of seeing

637
00:34:29,000 --> 00:34:33,040
Speaker 1: seeing requests from issuers to have an index sales person

638
00:34:33,280 --> 00:34:36,880
Speaker 1: with So I think that's that's where you're going. And

639
00:34:36,880 --> 00:34:40,120
Speaker 1: you're absolutely right. But but the but the big you

640
00:34:40,160 --> 00:34:42,680
Speaker 1: have to think about it. I am the drop in

641
00:34:42,719 --> 00:34:45,960
Speaker 1: an ocean. Where are all the indexes at there at

642
00:34:46,080 --> 00:34:49,160
Speaker 1: you know smp M, s c I and you know

643
00:34:49,320 --> 00:34:52,600
Speaker 1: NASDAC and all the big ones. So they don't really

644
00:34:52,680 --> 00:34:56,120
Speaker 1: specialize in that, so they may they may move towards that,

645
00:34:56,320 --> 00:34:57,920
Speaker 1: or what I think you will see happen is the

646
00:34:57,920 --> 00:35:00,719
Speaker 1: big E T F companies will actually move away from

647
00:35:00,760 --> 00:35:03,040
Speaker 1: those guys and come up with their their own index

648
00:35:03,080 --> 00:35:07,440
Speaker 1: provider or use different providers like myself. Hey David, as

649
00:35:07,480 --> 00:35:09,000
Speaker 1: we start to wrap here, I want to bring it

650
00:35:09,040 --> 00:35:12,960
Speaker 1: back to you and investors, um, since you know you're

651
00:35:12,960 --> 00:35:16,240
Speaker 1: talking to institutional investors a lot, how are we supposed

652
00:35:16,280 --> 00:35:19,640
Speaker 1: to think about how reats fit into the portfolio of

653
00:35:19,680 --> 00:35:22,040
Speaker 1: the future. You know, there's a ton of talk about

654
00:35:22,400 --> 00:35:25,160
Speaker 1: sixty forty and sort of the forty not being what

655
00:35:25,200 --> 00:35:27,359
Speaker 1: it used to be. Like, talk to us about how

656
00:35:27,840 --> 00:35:31,160
Speaker 1: institutional investors and maybe what retail investors can learn from

657
00:35:31,200 --> 00:35:33,160
Speaker 1: them in terms of how we should think about how

658
00:35:33,200 --> 00:35:36,640
Speaker 1: reats fit into portfolios going forward. Certainly, and and so

659
00:35:36,680 --> 00:35:40,359
Speaker 1: obviously you know there's the rededicated community to dedicated institutional

660
00:35:40,360 --> 00:35:43,560
Speaker 1: re investors, the Cone and Steers as of the world Brookfield.

661
00:35:43,960 --> 00:35:48,160
Speaker 1: You know, they have obviously huge, huge stakes their portfolios

662
00:35:48,160 --> 00:35:51,719
Speaker 1: tied up in real estate. From an average retail investor,

663
00:35:51,840 --> 00:35:54,880
Speaker 1: let's say the typical advisors recommend anywhere from five to

664
00:35:54,960 --> 00:35:57,920
Speaker 1: fifteen percent of your portfolio should be involved in reach

665
00:35:58,120 --> 00:36:01,400
Speaker 1: real estate. And that's for that did and income and safety.

666
00:36:01,440 --> 00:36:03,279
Speaker 1: It's the you know, call it the counter hedge and

667
00:36:03,320 --> 00:36:07,160
Speaker 1: the tech and volatility. Traditionally, reads are a safe haven

668
00:36:07,280 --> 00:36:10,520
Speaker 1: during times of volatility. So really it's anywhere from I

669
00:36:10,560 --> 00:36:13,600
Speaker 1: would say five or fiftcent from an institutional perspective, again

670
00:36:13,600 --> 00:36:15,279
Speaker 1: because of a hedge from the law of the other

671
00:36:15,760 --> 00:36:18,919
Speaker 1: crazy volatility names. You know, it's definitely it definitely needs

672
00:36:18,920 --> 00:36:21,640
Speaker 1: to have a presence that's there. But think about it. Obviously,

673
00:36:21,680 --> 00:36:24,680
Speaker 1: you know, Reads faced a real tough time during COVID.

674
00:36:25,040 --> 00:36:26,960
Speaker 1: A lot of the guys did cut their dividends. They

675
00:36:27,000 --> 00:36:29,000
Speaker 1: have come back, a lot of the guys are trying

676
00:36:29,000 --> 00:36:31,400
Speaker 1: to get back to higher dividend structure. Remember, they have

677
00:36:31,520 --> 00:36:34,200
Speaker 1: to pay out their net income in the form of dividends.

678
00:36:34,239 --> 00:36:36,920
Speaker 1: So think about it. Most of these management teams, if

679
00:36:36,960 --> 00:36:40,520
Speaker 1: not all, these management teams have executives that own huge

680
00:36:40,680 --> 00:36:43,960
Speaker 1: steaks directly in their companies because they're getting paid so

681
00:36:44,000 --> 00:36:46,799
Speaker 1: much dividend income on the backside of it that they

682
00:36:47,080 --> 00:36:48,840
Speaker 1: have what they call skin in the game, and so

683
00:36:48,880 --> 00:36:51,360
Speaker 1: they want to make sure that as a company continues

684
00:36:51,440 --> 00:36:54,360
Speaker 1: to perform, they continue to perform and play along with

685
00:36:54,400 --> 00:36:56,880
Speaker 1: those returns as well. So I feel like it's just

686
00:36:56,920 --> 00:37:00,319
Speaker 1: going to continue to grow and grow. Um, you know,

687
00:37:00,400 --> 00:37:04,120
Speaker 1: it's it's again, a momentum player is it's not necessarily

688
00:37:04,200 --> 00:37:06,520
Speaker 1: geared towards a momentum guy. It's where a long term

689
00:37:06,600 --> 00:37:11,719
Speaker 1: holding type of growth play. Okay, come to that point

690
00:37:11,760 --> 00:37:14,400
Speaker 1: in the program where I have to ask you both

691
00:37:14,760 --> 00:37:17,640
Speaker 1: for your favorite ticker. And it can't be one that

692
00:37:17,760 --> 00:37:23,240
Speaker 1: you have yourself. Can't be s r VR so Kevin favorite.

693
00:37:23,280 --> 00:37:26,000
Speaker 1: I know you're in you're an index marketing mode, but

694
00:37:26,160 --> 00:37:29,359
Speaker 1: let's just take that hat off and just be an

695
00:37:29,360 --> 00:37:32,880
Speaker 1: E t F industry favorite TAT guy favorite et F

696
00:37:32,880 --> 00:37:36,399
Speaker 1: ticker that is not your own, you know what, so

697
00:37:37,239 --> 00:37:40,680
Speaker 1: and and this is outside of of reeds obviously, so,

698
00:37:41,239 --> 00:37:44,839
Speaker 1: uh my favorite, I actually hate to say it. It's

699
00:37:44,920 --> 00:37:48,040
Speaker 1: got to be Hack. I love that ticker. I just

700
00:37:48,320 --> 00:37:52,160
Speaker 1: love It's just it's so raw, like if you think

701
00:37:52,200 --> 00:37:56,040
Speaker 1: about it like hack, like it's got like a negative connotation,

702
00:37:56,400 --> 00:37:59,319
Speaker 1: but it crushed it when it launched. So you've got

703
00:37:59,440 --> 00:38:03,400
Speaker 1: to you've got to you've got a word that you

704
00:38:03,440 --> 00:38:06,240
Speaker 1: know exactly what that means, right, and you tell anybody

705
00:38:06,480 --> 00:38:11,840
Speaker 1: it's also it's a verb and it now and the

706
00:38:11,880 --> 00:38:14,640
Speaker 1: E t F is trying to stop what the word is.

707
00:38:14,680 --> 00:38:17,800
Speaker 1: The whole thing is, it's just it's very multidimensional. I agree,

708
00:38:18,040 --> 00:38:22,719
Speaker 1: amazing ticker. It's my favorite one of Let me preface

709
00:38:22,920 --> 00:38:25,280
Speaker 1: that for those that don't know. One of my favorite

710
00:38:25,280 --> 00:38:27,600
Speaker 1: pastimes and I can't wait to get back out there

711
00:38:27,680 --> 00:38:30,880
Speaker 1: is going to see the rock band Fish and so

712
00:38:31,920 --> 00:38:35,680
Speaker 1: to med favor, I'm gonna go Toke is probably my

713
00:38:35,760 --> 00:38:39,640
Speaker 1: favorite E T F ticker that's out there. That's also

714
00:38:39,760 --> 00:38:42,240
Speaker 1: a good one. Also a verb. I'm telling you verbs

715
00:38:42,680 --> 00:38:46,040
Speaker 1: are the way to go and and and out on

716
00:38:46,160 --> 00:38:50,040
Speaker 1: that one. So we got a two for both. Yeah,

717
00:38:50,239 --> 00:38:53,640
Speaker 1: to be selfish, I do want to say the fact

718
00:38:53,680 --> 00:38:58,319
Speaker 1: that the R E I T ticker was available and yeah,

719
00:38:58,400 --> 00:39:02,319
Speaker 1: that's weird. That's amazing to me. That is amazing because

720
00:39:02,320 --> 00:39:07,000
Speaker 1: it's probably what the launched or et F launched. What

721
00:39:07,080 --> 00:39:09,240
Speaker 1: were people thinking? Why were they? Was it too obvious?

722
00:39:09,360 --> 00:39:13,319
Speaker 1: I've gotten more foam various folks asking me how did

723
00:39:13,520 --> 00:39:16,160
Speaker 1: how did they get this ticker? How is that possible?

724
00:39:16,600 --> 00:39:18,760
Speaker 1: And my answers, I don't know. But it's the steel

725
00:39:18,760 --> 00:39:21,840
Speaker 1: of the century that they finally release the REET ticker.

726
00:39:22,200 --> 00:39:24,920
Speaker 1: All right, Kevin David, thank you so so much for

727
00:39:25,000 --> 00:39:35,280
Speaker 1: joining us on Trillions. Thanks, thank you, thanks for listening

728
00:39:35,280 --> 00:39:37,520
Speaker 1: to Trillions. Until next time, You can find us on

729
00:39:37,560 --> 00:39:41,759
Speaker 1: the Bloomberg terminal, Bloomberg dot com, Apple Podcast, Spotify, and

730
00:39:41,800 --> 00:39:44,000
Speaker 1: wherever else you like to listen. We'd love to hear

731
00:39:44,040 --> 00:39:46,680
Speaker 1: from you. We're on Twitter, I'm at Joel Webber Show,

732
00:39:47,000 --> 00:39:50,719
Speaker 1: He's at Eric Faltunas, and you can find David at

733
00:39:51,280 --> 00:39:55,600
Speaker 1: Daily Beat, and you can find Kevin at Kevin R.

734
00:39:55,760 --> 00:39:59,960
Speaker 1: Kelly Underscore. This episode of Trillions was produced by Magnus Hendrickson.

735
00:40:00,400 --> 00:40:03,720
Speaker 1: Francesca Levy is the head of Bloomberg Podcast. Bye