Mark Brisley: Tom, great to have you with us. Thanks for being here today.
Tom Dicker: Great to be here, Mark.
Mark: Let's start with why real estate is an essential ingredient for investors seeking income?
Tom: Income generated from real estate has a few attractive features for income-seeking investors. First, the income from real estate is generally contractual in nature, meaning it gets paid in good economic times or bad times, and typically essential for a person or business. Secondly, the yields from real estate tend to be a bit higher than fixed income.
Unlike fixed income, the yield from real estate can grow over time. Inflation can be passed through to tenants in a form of higher rent, which benefits you, the landlord. These attributes have made it an attractive area for investors that require stable and regular cash flows to meet their obligations such as pension funds but need yields higher than what fixed income can provide.
Mark: How can investing in publicly traded real estate companies simplify real estate investing for those seeking income?
Tom: In my experience, investing in public real estate is an excellent solution for those seeking diversified sources of income. Most people would benefit from the stable and growing income that comes from a quality real estate portfolio, but they don't have the money to buy it or the expertise to operate the real estate.
A portfolio publicly listed real estate offers liquid access to some of the best real estate in the world in different asset classes like apartments, and warehouses, self-storage, data centers, and they're run by experienced management teams. Because it's liquid, reducing your public real estate holdings in the event you need to rebalance your portfolio or pay for your retirement is much easier than trying to sell a commercial property or residential building.
Mark: We know that markets go up and markets go down. If the last two years have shown us anything, we now know that it can be for a myriad of reasons, but what happens to real estate income if markets go down?
Tom: Real estate is a broad sector that includes many different property types. They all have their own drivers of cash flow and growth. Depending on the cause of a market downturn, we can adjust our exposures accordingly. For example, the COVID-19 pandemic created winners and losers within the real estate industry.
Some property types like offices or hotels were meaningfully negatively impacted by the pandemic while others like data centers, and warehouses, and self-storage were positively impacted by the changes to the economy and consumer behavior during the pandemic. Investing in public real estate has allowed us to use active management and shift our real estate portfolio fairly quickly into areas we felt had a much better outlook.
Mark: How can investors start including income from real estate and avoid the complexity of trying to do it themselves?
Tom: That's a good question. For investors looking for income generation from real estate, they can invest with us through the Dynamic Global Real Estate Fund to start accessing a high-quality actively managed global real estate portfolio.
Mark: Tom, really timely insights and appreciate you being here sharing them with us today.
Tom: Thanks for having me, Mark.
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