IIPR - Is It Too Late to Buy These 2 Brilliant Passive Income Stocks?
2023-12-27 08:50:00 ET
The real estate investment trust (REIT) sector swooned in 2023, but it has been coming back to life lately. For some of the biggest and best known REIT stocks, that means the investment opportunity that arose may be very close to over. But there are still some REITs where opportunity remains, like Alexandria REIT (NYSE: ARE) and Innovative Industrial Properties (NYSE: IIPR) . Here's a quick look at each.
Shares of REIT Alexandria are more than 40% below their 2022 high-water mark. One of the big problems is that investors view the REIT as operating in the office sector. Offices have been troubled since the work-from-home trend and social-distancing efforts of the early coronavirus pandemic period. Although social distancing has ended, work from home has managed to linger. Thus offices have been under pressure because they just aren't being used as much, meaning employers need less space.
That's a very real problem for traditional office landlords, but Alexandria owns medical research facilities. These are highly specialized assets that are nothing like a traditional office. And while there is an office aspect to the portfolio, it is generally tied to the market for research and laboratory space. You don't write reports in the highly technical lab area; you write them in the attached office space, so you need both. Occupancy at the end of the third quarter was a fairly solid 93.7%.
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Is It Too Late to Buy These 2 Brilliant Passive Income Stocks?