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TIAA Real Estate Account VA Inflows/Outflows

It took me a while to search where the prior post on it was buried. So, I am posting the update on a new thread as this may take a while to play out.

                       AUM           Price                 %Inflow (+)/%Outflow (-)

                                                                (from prior month)          YTD

12/31/19     27.308 B       440.422

01/31/20     27.289 B       440.389                 -0.062%

02/28/20     27.269 B       440.799                 -0.166%

03/31/20     26.04   B       440.894                 -4.528%

04/30/20     25.24   B       437.856                 -2.400%

05/31/20     24.54   B       435.134                 -2.165%                -9.044%

YBB
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Re: TIAA Real Estate Account VA Inflows/Outflows

Thanks, not bad (outflows).

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Re: TIAA Real Estate Account VA Inflows/Outflows

T-REA has several layers of defenses when there are outflows.

The first layer [cash, cash-equivalents] is gone with the outflows so far.

The second layer is non-RE securities. T-REA is probably selling some of it.

The third layer is LOC [not huge].

The final layer is Liquidity Guarantee.

YBB
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Re: TIAA Real Estate Account VA Inflows/Outflows


@yogibearbull wrote:

T-REA has several layers of defenses when there are outflows.

The first layer [cash, cash-equivalents] is gone with the outflows so far.

The second layer is non-RE securities. T-REA is probably selling some of it.

The third layer is LOC [not huge].

The final layer is Liquidity Guarantee.


It does not happen frequently but selling a property would bring some cash too.

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Explorer ○○

Re: TIAA Real Estate Account VA Inflows/Outflows

Such information as this update from Green Street Advisors certainly does suggest that more may get out of TREA.  Alan

Commercial Property Price Index

JUNE 4, 2020
Property Prices Down 11% YTD

 

The Green Street Commercial Property Price Index declined by 0.7% in May. Prices of lodging properties were lowered another 10%, while those of other property types were largely unchanged from the prior month. The index is down 11% this year.

“It’s too early to be definitive, but at this point, 10%, plus or minus, feels like a good betting line for Covid’s impact on pricing,” said Peter Rothemund, Managing Director at Green Street Advisors. “Of course, there are relative winners and losers. Property types such as industrial, manufactured home parks, and self-storage are experiencing only modest slippages in pricing, while the most impacted sectors — lodging and malls — may see declines at least twice as large as the average by the time the dust settles.”

 

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Re: TIAA Real Estate Account VA Inflows/Outflows

So they're not feeling the loss of the half-of-a-half-of-a-half-of-a-half . . . of a half of a billion that I took out.

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Re: TIAA Real Estate Account VA Inflows/Outflows

Meanwhile, higher end multi-family, as the Wall Street Journal points out, is commanding higher rents and, of course, such low interest rates  put strong real estate investors like TIAA in a favorable position.

This still doesn't look like 2008, and I suspect it won't. I would guess the majority of sellers have been accommodated and some might even be surprised by the modest outflows and even more modest decline in the NAV.

Clearly, mine is the minority view among the majority at this site. 😉

Bob

 

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Re: TIAA Real Estate Account VA Inflows/Outflows

Check out the chart of an ETF, MORT from Yahoo Finance.VanEck Vectors Mortgage REIT In (MORT).png

Sorry that I did not include the y-axis. But, I know that since May 13, the price has gone up from $10/share to $13.60/share.

I did not put any money in that but I have been following this chart since last Friday. So, TREA may get its day soon.

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Re: TIAA Real Estate Account VA Inflows/Outflows

Different sellers might have had different reasons.  This seller's reason to sell in mid-March as I stated then:  TIAA Trad's 3% guarantee looked relatively more attractive than TREA in mid-March.  This reason was good enough for me.  (I did not think about whether or not this time would be like 2008.  To sell TREA, there might be other reasons than thinking that it will be like 2008.)

P.S.  I fully understand that Bob did not write every seller who sold TREA thought it would be like 2008.

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Re: TIAA Real Estate Account VA Inflows/Outflows

Like Bob, I'm not timing TREA.  My TIAA stake in TREA is only 15%, and timing a slow and (probably) relatively shallow decline followed by an equally slow recovery is not tempting to me.

But I do rebalance between CREF Stock and Traditional, and that trade has been amazing this year.  Except for what I've annuitized, my wife and I own R2 shares.   R2 Stock has fallen from $579 down to $377 and ricocheted back to $530.  I have never experienced a time when rebalancing has been so quickly profitable.  This is the shortest time between selling, buying, and selling that I've ever known.  Of course, I buy and sell as the stock moves by certain amounts, so I did not do all my selling and buying at the top and bottom. Nevertheless, it has been gratifying.

Now if we get a second bottom, this year is going to get even better.  Meanwhile I expect to cheerfully watch while TREA dips and recovers.

John

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Re: TIAA Real Estate Account VA Inflows/Outflows

Good show, John.

Bob

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Re: TIAA Real Estate Account VA Inflows/Outflows

@ECEPROF , MORT is mREIT,  not equity REIT, so it may not tell much about T-REA.

YBB
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Re: TIAA Real Estate Account VA Inflows/Outflows


@yogibearbull wrote:

@ECEPROF , MORT is mREIT,  not equity REIT, so it may not tell much about T-REA.


Thanks Yogi for pointing out the difference.

Yes, I know it. The top companies in Mort are

StockWeightAmount
Annaly Capital Management16.67%$24,635,227
Agnc Investment12.71%$18,782,518
Starwood Property Trust8.19%$12,099,321
Hannon Armstrong Sustainable Infrastruc6.45%$9,535,110
Blackstone Mortgage Trust6.20%$9,158,208
New Residential Investment6.17%$9,114,560
Arbor Realty Trust4.62%$6,828,99

I have owned AGNC last year as well as this year. I sold it Monday and bought VTI to remove non-qualified divs out of my taxable account to cut my taxes. I bought an equivalent of GLAD in my ROTH.

In any case, I compared VNQ with MORT a few days ago, and VNQ has done better over a long period on the price. However, I am not sure about the Total Return because MORT has a good dividend distributions just like some CEFs. It is the total return that counts.

 

 

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Re: TIAA Real Estate Account VA Inflows/Outflows

mREITs crash was much worse than equity REITs crash as seen from adjusted-prices at Stockcharts.   https://stockcharts.com/h-perf/ui?s=VNQ&compare=MORT&id=p19797137373

YBB
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Re: TIAA Real Estate Account VA Inflows/Outflows


@yogibearbull wrote:

mREITs crash was much worse than equity REITs crash as seen from adjusted-prices at Stockcharts.   https://stockcharts.com/h-perf/ui?s=VNQ&compare=MORT&id=p19797137373


That is similar to what I saw in the Yahoo chart also. That is why I did not buy it because it seems to be too volatile. I went with GLAD because it was at a discount and I already had it in all our accounts. GLAD is at a premium today. It seems that my taxable account has recovered from the crash. I have reached almost 84% of our ROTH accounts. The drag seems to be PCI but it improving slowly. I am not worried about it because as long as PCI maintains the distributions, and the buyers will be back. KIO has improved better than PCI. It seems that I have made some cash in KIO but I am not going to sell it.

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Re: TIAA Real Estate Account VA Inflows/Outflows

@jjustice  "Timing" the turns of TREA seems easy. That's what makes it a unique investment. For me the hassle of exiting and re-entering is that involves tansfers to and from my other investment company.  It's worth it to me because I have about 50% of my money in TREA and even a "shallow" dip would add to the misery of this period.

My guess, based on the Green Street passage quoted by the OP, and on the current distance of REITs from their February high, is that TREA will bottom about 11% below its 2020 high.

 

 

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Re: TIAA Real Estate Account VA Inflows/Outflows

Hi Nat,

I hold a few hundred shares of KIO that I bought in the $10.60 to $10.90 range not long ago. I tried to sell half the shares today but set my limit about 10 cents too high. I did manage to sell all my TCEHY and a third of my shares of GLOP today for nice gains. Next week if KIO holds up maybe I can sell half.

S

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Re: TIAA Real Estate Account VA Inflows/Outflows

Skipper

I have several thousands shares of KIO and PCI in our ROTH accounts. They distribute in excess of 0.8% per month. Reinvest them back in the same or some equity fund in the same accounts. Look at the growth rate. It doesn't matter what the unit price is. I ain't selling them.

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Re: TIAA Real Estate Account VA Inflows/Outflows


@ECEPROF wrote:

Skipper

I have several thousands shares of KIO and PCI in our ROTH accounts. They distribute in excess of 0.8% per month. Reinvest them back in the same or some equity fund in the same accounts. Look at the growth rate. It doesn't matter what the unit price is. I ain't selling them.


That's nice, but if you plot the total return of the Vanguard junk bond fund, VWEHX, you'll see it handily outpaces those two over most time periods...

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Re: TIAA Real Estate Account VA Inflows/Outflows

Yes and No.

You should buy CEFs under discounts and then check the total return. You can find the difference. Besides, you should reinvest and see the growth rates. KIO was crushed recently, and I think that Skipper has bought them between $10-11. Now, it is $13+. He can sell it or get the cash every month.

As Buffet recently said, if you don't know what you are doing, go with VWEHX. I went from VWEHX to KIO and PCI. But, if you learn what you can do, you can reap the benefits.


@TheWizard wrote:

@ECEPROF wrote:

Skipper

I have several thousands shares of KIO and PCI in our ROTH accounts. They distribute in excess of 0.8% per month. Reinvest them back in the same or some equity fund in the same accounts. Look at the growth rate. It doesn't matter what the unit price is. I ain't selling them.


That's nice, but if you plot the total return of the Vanguard junk bond fund, VWEHX, you'll see it handily outpaces those two over most time periods...


 

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