Image Source: Pixabay

After two years in the turbulent COVID-19 economy, we’ve seen all manner of fiscal absurdity, from labor shortages to lumber scarcities, business closures to banking volatility. Even after the dust settled from the prohibitions of the pandemic itself, our economy is still reeling from the effects of inflation brought on by the stimulus and spending stagnation early in the era of COVID-19.

While some blame the government, Russia, President Biden, or cost-push occurrences, the jury is still out on just what has kept our economy reeling from inflation. I’m not as concerned with the “why” in this case as I am with the “when.” As in, “When can I get a gallon of gas for under $4?” Or, “When can I buy groceries without going insane?”

Well, there may be some good news for all of us chasing the light at the end of this tumultuous tunnel. Recently, Deutsche Bank Wealth Management CIO for the Americas Deepak Puri put forth a theory that prices are currently at their peak, and inflation will ease as the year moves forward.

From Yahoo! Finance:

"I think the narrative seems to be that the March, April numbers that we’re going to see, especially on the CPI and PPI side, might be the high-water mark,” Puri told Yahoo Finance Live. “…There were some green shoots in the last CPI number. It was the slowest month-over-month over the last five months increase that we saw."

To back up this hunch, he cited the price decrease of some products, such as used cars, in the March inflation report released by the Bureau of Labor Statistics.

Inflation hit another record high at 8.5% in March, a level we haven’t witnessed since 1981. Prices rose 1.2% in February following a 0.8% monthly rise during that month. Food, shelter, and oil were the highest contributors to the spike in prices.

The Consumer Price Index (CPI) covering the month of April is scheduled for May 11, so we shall wait with bated breath as the era of inflation could soon be a thing of the past. Let’s hope so.

Other Non-REIT News to Know About - Tesla Annihilates Earning Estimates

Tesla’s record quarterly earnings report received wide praise from the Wall Street scene: The stock leapt more than 7% recently, with analysts announcing just a few concerns about the rally ahead for the automaker’s newest factory openings.

Elon’s EV venture reported killer first-quarter results that annihilated expectations, pushing towards $19 billion even after the factory fallout from China’s ongoing supply chain chaos.

Talk about a killer week from our South African super entrepreneur. And to top it all off, he even got to celebrate his favorite holiday on Wednesday. Kudos to you, Mr. Musk.

The World According to REITs

In chapter 5 of my book, The Intelligent REIT Investor Guide, I speak to the resilience of retail REITs. In an economy like ours, you can never bet against the strength of storefronts or the buoyancy of good, old brick and mortar establishments.

Even after the chaos of COVID-19, our retail sector returned full speed, rallying in the face of shutdowns, mandates, and more. Here, we’ll celebrate the strength of this sector with a quick look at a couple of killer retail REITs.

Simon Property Group (SPG)

Simon Property Group, Inc. invests in malls, outlets, and community centers. Headquartered in Indianapolis, it’s the largest owner of shopping malls in the U.S. Despite 2020’s chaotic climate for physical retail, shares of Simon Property Group actually jumped over 18% from last year. And given its vast portfolio of Class A properties, it’s a more solid bet for those looking to enter the retail space.

I mean, check out this recovery charted here:

It’s safe to say that in the world of retail REITs, SPG has real staying power despite the pandemic.

Realty Income Corporation (O)

This retail REIT develops most of its annualized retail revenues from tenants with a service, non-discretionary, and/or a low price point component to their business. Such businesses are less open to economic downturns like inflation or competition from the internet. This increases the strength of rental revenues and produces predictable cash flows.

Not counting a merger with VEREIT, in 2021, Realty Income invested $6.41 billion in 911 established and developing properties, including $2.57 billion in Europe. Realty Income expects a full-year 2022 acquisition volume of more than $5.0 billion. The purchases of well-located commercial properties add to the company’s scale, offering a competitive edge to its net lease industry.