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Alright, folks, it's time to finish updating the Big Five REITs. A couple of weeks ago, we covered the first three. Now, we're going to wrap up the final two and take a look at where we stand in the world, the markets, and the economy.

There's a lot of noise out there—tariffs, tax policy, interest rates, layoffs, you name it—but that just means opportunity if you know where to look. So, let's dive in.

The Market Check-In

The S&P 500 and Dow are up as I’m writing this, while the Nasdaq is lagging. NVIDIA had a monster beat on earnings—80% year-over-year revenue growth—but in classic Wall Street fashion, it wasn’t enough. The Magnificent Seven trade has been a loser so far in 2025, underperforming the broader market. It was overdue.

The market isn’t in free fall, but we’re teetering on short-term trend violations. REITs had a pullback in December when the market realized rate cuts weren’t coming anytime soon. Now, they've recovered and are in an uptrend.

The 10-year Treasury yield, which correlates closely with REIT performance, is solidly in a short-to-intermediate-term uptrend.

Bonds and stocks have been diverging, and historically, that has to resolve one way or the other. If stocks correct to meet bonds, it’s not going to be pretty.

Economic Noise: Tariffs, Taxes, and Shutdowns—Oh My!

Everyone’s got an opinion on what happens next—Wall Street, Congress, the talking heads on TV. But the truth?

Nobody knows.

Tariffs are historically inflationary, and if we slap 25% tariffs on Mexico, Canada, Europe, and China, prices are going up. But Trump hasn’t imposed most of the tariffs he’s threatened.

Will he?

Who knows? If he does, we could see inflation.

We could also see a manufacturing boom as companies relocate production to the U.S.

On taxes, the GOP is fighting to make tax cuts permanent. Will it happen?

Maybe.

Maybe not.

The government could shut down in March. Will it? Again, who knows? This is why you ignore the noise and focus on the facts.

Ignore the Forecasts—They’re Useless

The average economist forecast is about as reliable as a Florida weatherman predicting sunshine in the middle of a hurricane.

Wall Street has a bullish bias.

They always expect GDP growth, falling interest rates, and rising markets. The reality? There are storms brewing.

We watch a handful of economists—Torsten Slok, Henry McVey, Nancy Lazar—because they actually get things right.

The rest? Not worth your time.

The REIT Strategy: Buy Fear, Sell Greed, and Otherwise Do Nothing

REITs have outperformed stocks over time. That’s why I laugh when allocators say to put 5-10% of your portfolio in REITs. Five percent? Really?

Short-term, we watch sentiment indicators like CNN’s Fear & Greed Index.

When fear is extreme, we buy. When greed is extreme, we hold or trim.

The big one to watch is the high-yield credit spread. When it blows out, you back up the truck. History tells us that buying REITs when spreads hit 7.5%+ over Treasuries leads to huge gains. We’re in a complacent environment now, so there’s no rush to deploy cash aggressively.

Sector Breakdown: What to Buy When the Market Drops

• Industrial REITs: They recover fast. E-commerce is still booming. Supply chains are still shifting. This sector will keep winning.

• Data Centers: No long-term data, but they’re critical for cloud computing, AI, and quantum computing. Big upside.

• Self-Storage: Recession-proof, flexible pricing, and a great long-term play on land appreciation.

• Residential REITs: Apartments are in demand. Housing is unaffordable. New apartment supply is tightening. Rent increases are coming.

• Retail REITs: Open-air shopping centers recover first. Malls take longer. Class A retail still works.

• Office REITs: Class A properties are fine. B and C properties? Hard pass.

• Hotel REITs: Slow recovery. Economy-dependent.

• Healthcare REITs: Medical offices and life sciences are the winners. Senior housing? Not yet.

The Final Two of the Big Five

Simon Property Group (SPG)

• Largest mall owner in the U.S. (outlets, open-air centers, premium malls).

• 4.6% dividend yield.

• 96.5% occupancy.

• 62% FFO payout ratio—plenty of room for dividend growth.

• Average debt maturity: 7 years. Interest rate: 3.86%.

• Verdict: Great long-term hold. Buy on a pullback.

Prologis (PLD)

• One of the two largest industrial REITs in the world (the other is Blackstone).

• 3.3% dividend yield.

• Owns critical distribution and logistics infrastructure.

• Expanding into data centers, solar, and energy storage.

• 41 billion in land bank. 1.2 billion square feet across four continents.

• Debt-to-market cap: 23%. Fixed-rate debt locked in at 3.1% for nine years.

• Verdict: Buy the dips. Critical infrastructure for global commerce.

The Big Five: Own These and Own the U.S. Real Estate Market

Between the Big Five REITs, you get exposure to the entire real estate spectrum:

• Industrial (Prologis): Warehouses, logistics, and e-commerce.

• Retail (Simon Property Group): Class A malls and outlets.

• Residential (Equity Residential): High-end apartments in top cities.

• Office (Boston Properties): Premium office space in the best markets.

• Data Centers (Digital Realty): AI, cloud computing, and tech infrastructure.

Together, they form the core of a strong REIT portfolio that throws off cash, protects against inflation, and has long-term appreciation potential.

Final Thoughts

There’s a lot of noise out there—tariffs, taxes, inflation fears, rate speculation—but that’s always the case. The key is to ignore the nonsense and focus on buying quality assets at good prices. REITs have a history of outperforming stocks, especially in inflationary periods. We’ve built a portfolio of deeply undervalued, high-quality real estate that throws off reliable cash flow and should keep growing over time.

If you’re not already in, consider joining the premium service for deeper insights into high-yielding, undervalued REITs, preferred stocks, and asset-backed income plays. For now, sit tight, wait for opportunities, and when fear spikes, be ready to pounce.