10 INVESTMENTS TO BENEFIT FINANCIALLY IN THE EXODUS OF PEOPLE FROM URBAN CITIES
During the pandemic there was an "exodus" of people leaving major cities like San Francisco, NYC, LA, Chicago. I am trying to gauge how many but the data is a bit mixed. About 360,000 net people left NYC. 90,000 net households left SF. About 110,000 households left Chicago, etc.
The questions are: where did they move and how can we benefit?
First thing to know: WHERE ARE PEOPLE MOVING?
According to data I've gathered they are moving to these states: Florida, Texas, Tennessee, South Carolina, North Carolina, Arizona, Georgia and, to a lesser extent Ohio, Colorado, Utah.
Why?
Tech companies are moving to these states. Taxes are lower than the Northern states, the weather is sunnier, and maybe fewer Covid restrictions play a role.
How do we benefit?
Real Estate Investment Trusts. These are stocks that own property and pay out 95% of their profits as dividends. So you make money in two ways: the dividend, and as the value of the properties go up, which we are already starting to see in many of the states where people from high-cost-of-living cities are moving to.
In the list, I divide it up with residential REITs (REITs that buy houses or apartments), industrial REITS (warehouses), storage REITs (self-storage for when people move), healthcare REITs (as boomers retire), etc.
The questions are: where did they move and how can we benefit?
First thing to know: WHERE ARE PEOPLE MOVING?
According to data I've gathered they are moving to these states: Florida, Texas, Tennessee, South Carolina, North Carolina, Arizona, Georgia and, to a lesser extent Ohio, Colorado, Utah.
Why?
Tech companies are moving to these states. Taxes are lower than the Northern states, the weather is sunnier, and maybe fewer Covid restrictions play a role.
How do we benefit?
Real Estate Investment Trusts. These are stocks that own property and pay out 95% of their profits as dividends. So you make money in two ways: the dividend, and as the value of the properties go up, which we are already starting to see in many of the states where people from high-cost-of-living cities are moving to.
In the list, I divide it up with residential REITs (REITs that buy houses or apartments), industrial REITS (warehouses), storage REITs (self-storage for when people move), healthcare REITs (as boomers retire), etc.
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1. MAA - Mid America Trust
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2. CPT - Camden Property Trust
"The Company's properties are located at Arizona, California, Colorado, Florida, Georgia, North Carolina, Washington District of Columbia (DC) Metro and Texas, among others."
3. IRT - Independence Realty Trust
" owns and operates multifamily apartment properties across non-gateway U.S. markets, including Atlanta, Louisville, Memphis, and Raleigh. IRT's investment strategy is focused on gaining scale within key amenity rich submarkets that offer good school districts, high-quality retail and major employment centers"
4. PLYM Plymouth Industrial REIT
This is not a residential play. Plymouth owns warehouses and distribution centers across the South. As more people move to the South, more warehouses will be filled with goods from Walmart, Amazon, etc
5. MPW - Medical Properties Trust
But hospitals in general are not as affected as office buildings to remote work. Neverthless, I prefer that the hospitals are located in the states that people are moving to. Even in recent news, I can see MWP shifting more demographically. They sold one parcel of real estate based in Massachusett and bought $900mm worth of land in Florida for medical use.
6. CUBE - CubeSmart
CubeSmart owns storage facilities throughout the South and a bit in the North (hey, even if you move from NYC, you might move back, so you store in NY).
7. BX - Blackstone
The conspiracy theorist in me thinks we're heading towards a world where huge companies (Blackstone is the largest fund in the world) own all the land and the people are all renters.
In the third quarter of 2021, for instance, 43% of all home sales in Metro-Atlanta were bought by investors. Most of those "investors" were one investor - Blackstone.
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8. WELL - Welltower
During the pandemic, the percentage of baby boomers that are retired rapidly increased. Not just because they are getting older but because the pandemic forced many businesses to close, causing early-retirement for many that would not have otherwise retired.
9. CSR - Centerspace
10. IRM - Iron Mountain
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