When does the stock market give you great clues to investing in REAL ESTATE? When a stock chart looks as beautiful as this newly-public real estate company’s chart looks. I’m Bryan Ellis. I’ll identify the company and extract some valuable investment intel for YOU, right now in episode #308.
Hello, Self-Directed Investor Nation all across the fruited plane! Welcome to today’s special edition of the SHOW OF RECORD for savvy self-directed investors like you.
Let’s jump right in, shall we?
Back in January of 2018, an Atlanta-based company began went public on the New York Stock Exchange. There wasn’t a huge pop on the IPO day. In fact, the share price started at $16 never got higher than about $18 bucks and change for nearly 3 full months. Then that company’s stock went on a tear that continues to this day. Now trading in the low $30’s range – nearly twice it’s IPO level of just 18 months ago – this stock is turning some heads.
Now if you’re asking, “why, oh why, Bryan, do you fill my ears with tales from Wall Street when you know I am focused on real estate or other alternative assets?”… Well, dear listeners, I shall endeavor to answer you plainly now.
So what is the company to which I refer? This isn’t just any company, it is a real estate investment trust, also known as an REIT or REIT for short.
For those of you not familiar, a REIT is a special type of entity that can trade on public markets and which is designed for businesses whose income is almost entirely generated from the ownership and monetization of REAL ESTATE. Ah yes, so now the relevance to you and me begins to peek through, does it not?
But there are many publicly-traded REITs. Why is this one different or unusual?
Well, my friends, it’s because of the KIND of real estate upon which they focus. This company is called AmeriCold Realty Trust, and as you might guess from the name, their specialty is COLD STORAGE warehousing… the kind of commercial space required primary by food delivery companies.
I learned about this on an unusual source. Every now and again – and with decreasing frequency, frankly – the people over at CNBC push past their political agenda and cover actual financial news. This is one of those days, as there’s an interesting article on their website about the very topic of our discussion.
So the rationale being given for a glowing analysis of this sector is simple: There’s not a lot of cold storage warehousing available, and the demand for it is skyrocketing because of food delivery companies like Peapod, Blue Apron and of course Amazon Fresh.
Well, to me that sounds like enough of a reason to look into cold storage as a way to invest one’s portfolio. And should you deem the business of frigid commercial space to be worthy of your investment capital – and in particular your retirement savings – what are you to do?
One alternative – likely the simplest – is to direct your stock broker to buy shares of AmeriCold. I’m not recommending for or against that. What we know is that so far the stock has done very well, and that’s positive.
But investing via publicly-traded assets, while very simple, represents a different risk: The risk of the lack of choice and control.
So a second alternative is to find a syndication or partnership that focuses on cold storage into which you can invest. This will allow you to use the resources and expertise of the investment partner to run the investment so you can passively provide the capital.
Your final alternative sacrifices the simplicity of investing in either publicly-traded stocks or privately-held syndications, but what you get in return is absolute control and absolute choice. That is, of course, to invest directly into the acquisition or construction of a cold storage facility of your own. This is a big commitment, of course… but is a very legitimate option which should not be ignored.
What’s best for you? That’s a decision only you can make, with appropriate input from your advisors, of course. But here’s the bigger point relevant to you no matter whether you care anything about Cold Storage or not:
If you happen to be investing your RETIREMENT funds, chances are very good that only ONE of those three options is available to you. Unless you have already transferred some of your retirement savings into a self-directed IRA or 401(k), your retirement portfolio will be handcuffed to Wall Street, wholly denying you the opportunity to work with an expert partner through a syndication and denying you the alternative to acquire or construct a cold storage warehouse of your own.
You must ALWAYS be ready to make investments – whether in cold storage facilities or anything else – by having your capital in an accessible situation, because all too often, opportunity requires quick movement. So to the extent that your portfolio is held within retirement accounts such as IRA’s or 401(k)’s, don’t delay in moving your money into a self-directed retirement account. Do it today. The days or weeks required to make that transition may just mean you’re too late.
And by the way, yes, it is a big and important choice to use the right kind of account and to use the right self-directed IRA or 401(k) provider. If you need some unbiased help getting to those answers, drop me a note to [email protected]. I’ll be happy to help you.
My friends, invest wisely today and live well forever!