Boardwalk Reit BEI-UN

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Curious as to thoughts on this REIT, has done exceptionally well over the years, seems to be hitting some resistance at ~$71.00, the same level as in 2014. But is certainly hasn’t been hit as hard as other REITS with the current interest rate environment.

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Asked on December 19, 2023 3:20 pm
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Hey there,

On of the reasons for Boardwalk's outperformance relative to many other REITs, is due to the fact it is an speciality housing REIT. Most of its revenue is driven by short-term rentals, which in this market where we have high immigration and low housing availability, the company is ideally situated. It is also strategically located in many of the bigger centers where demand for residential properties sin't falling anytime soon.

This is likely the main reason why BEI has done better than most. In fact, it is mainly residential REITs that are sitting on positive gains for the year while many other industries have struggled. The other thing to note, REIT's yield is very low compared to the others which means that investors aren't necessarily just buying it for the yield. This is important because when interest rates rise and you can get fixed income at 5%, high yield companies become less attractive because they carry additional risk. So you see a sell off of those high yielders in favour of fixed income. A company like BEI is less likely to be impacted because it had a smaller yield to begin with.

Mat

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Posted by Mathieu Litalien
Answered on December 22, 2023 5:20 am
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Thanks Mat, yes it certainly is capitalizing on residential rentals, which I see is not going to improve for probably the next decade which is probably good for REITS like Boardwalk. Good point on the yields, I see it more as a growth stock, but I think it may be hitting some resistance at it's current price. Should have bought it years ago....
(bpl521@outlook.com at December 22, 2023 10:53 am)