TRADE ALERT - Retirement Portfolio February 2025 (New Investment Opportunity)

Dear Landlords,

I want to extend a warm welcome to all our new members! We recommend that you start by reading our Welcome Letter by clicking here. It explains why we invest in real estate through REITs and how to get started.

As a reminder, our most recent "Portfolio Review" was shared with the members of High Yield Landlord on February 4th, 2025, and you can read it by clicking here.

You can also access our three portfolios via Google Sheets by clicking here.

New members can start researching positions marked as Strong Buy and Buy while taking into account the corresponding risk ratings.

If you have any questions or need assistance, please let us know.

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TRADE ALERT - Retirement Portfolio February 2025 (New Investment Opportunity)

Today, we continue to take advantage of the recent dip in REIT preferred shares to initiate a small position in the Series P preferred shares of Gladstone Land (LANDP). This purchase allows us to further diversify our Retirement Portfolio, all which boosting its average dividend yield to now 6%:

(Note that you can also buy LANDP depending on which is the cheapest)

Why invest in LANDP/LANDO?

After trading at near par value just four months ago, the shares have recently sold off and returned to ~$20, which represents a 20% discount to par value.

As a result, its dividend yield has also shot up. It now offers a 7.5% dividend yield and they pay monthly. Moreover, if and when our prediction for lower interest rates materializes, the shares could enjoy an additional ~25% upside as they return to par value. The shares actually traded at a substantial premium to par for most of 2022 when interest rates were ultra-low.

Assuming that it takes about 3 years for the shares to reprice at a $1 discount to par, that would result in ~12-15% average annual total returns going forward.

We think that this is a very attractive expected return coming from a relatively safe REIT with defensive assets, a decent balance sheet, and a trustworthy management team.

Assets

LAND is one of just two farmland REITs. It owns a portfolio of 168 farms worth approximately $1.5 billion portfolio. Its farms grow primarily fruits, vegetables and nuts, which are growing in demand, but limited in supply.

It leases these farms primarily on a triple-net basis, meaning that the tenants are responsible for all property expenses, resulting in highly consistent and predictable cash flow to the landlord.

We believe that such farmland investments are some of the most defensive real estate investments. They provide a basic necessity that is growing in demand and they face low risk of oversupply. On the contrary, every year, large amounts of farmland are converted to suburban uses, reducing its supply:

As a result, farmland has historically enjoyed low volatility and steady growth in rental income surpassing the rate of inflation.

Balance Sheet