Offices, office REITs?

In general, we love REITs. It is a very convenient way of owning real estate without the hassle of dealing with tenants. However, not all of them are the same. Here you have an old list of high dividend REITs.

With the rise of on-line shopping, we tried to avoid mall REITs. We felt many malls were built and only a few became successful. Besides malls, the Covid era has accentuated another global trend: working from home. This new reality we feel is likely to linger on.

When the pandemic wanes, do you think employees are going to return to the office?

Some financial firms are requesting their workers to return to the office as soon as possible. However, others such as Twitter, Spotity, Square... are going to let telework forever. We still don’t have enough data to value the effectiveness of the employees doing their job from home. We don’t even know if the intermediate managers are well prepared to assign specific tasks with adequate duration estimates. Probably, all of us have an opinion on the matter based on our own experiences.

That been said, the most probable outcome is going to be a hybrid model. Many big corporations (Microsoft, Maersk, etc...) have publicly announced they are willing to let employees combine work at home and at the office. There are even some office models with distributed workstations all over the cities. 

In any case, office space is going to suffer the consequences of more people zooming. There are REITs that only invest in offices. We never liked them. However most of the big REITs invest a big part of their capital in offices. It is up to you to decide if it is worth it.

Remember: before buying a REIT check the portfolio they own to have a clear idea of what you are buying.