Brad Thomas Blog | Tanger Remains A Beautiful SWAN | Talkmarkets
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Brad Thomas has over 25 years of experience in the commercial real estate brokerage, development and investment sectors and the majority of his experience has been research and consulting. Over the years, Thomas has provided nationwide real estate brokerage, construction services, development ... more

Tanger Remains A Beautiful SWAN

Date: Sunday, December 9, 2018 1:36 AM EDT

Summary

  • Although I consider REITs more “buy and hold” driven, it’s important to rebalance portfolios to take advantage of opportunistic mispricing, or, get rid of a few ugly ducklings.
  • "Department stores across the country account for more than 350 million square feet of mall space." Lauren Thomas.
  • Tanger has no department store exposure, access to capital is still a critical differentiator.
  • The selloff (valuation) is unwarranted as Tanger’s business model is perfectly suited for the new paradigm in which “department stores are under attack.
  • This idea was discussed in more depth with members of my private investing community, Rhino Real Estate Advisors. Get started today »

In case you missed it, I recently wrote an article summarizing my 2018 Top SWAN (stands for “sleep well at night”) picks - and the weighted average total return for the basket of REITs (through November 2018) is 10.6%. And in this article today, I will be making a strong case for why I still stand behind Tanger Outlets (SKT).

It’s interesting to revisit this list of high conviction picks to assess the year-end results. As you can imagine, I’m very pleased with these picks, especially home runs like Omega Healthcare (OHI) +46.6% YTD and Store Capital (STOR) +19.6% YTD.

Although I consider REITs more “buy and hold” driven, it’s important to rebalance portfolios to take advantage of opportunistic mispricing, or, get rid of a few ugly ducklings.

Because of selective vetting, it’s rare that I would unload a SWAN, because, as a value investor, I am disciplined in my approach of surveying the list of opportunities. This typically involves considering the company’s history, its moat-worth attributes, and most importantly, how the company is able to maintain its long-term pricing power.

And I’m not surprised to see this collective basket of SWANs out-perform (+10.6% YTD), given the in-depth, almost microscopic, research that we undertake. (i.e. our portfolios returned around 5% on average).

Continue reading on SeekingAlpha.

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