The Intelligent REIT Investor Guide

CHAPTER 8Specialized REITs

“Unusually rapid growth cannot keep up forever; when a company has already registered a brilliant expansion, its very increase in size makes a repetition of its achievement more difficult.”

—Benjamin Graham

The U.S. REIT market has expanded significantly over the past decade, as we've already somewhat discussed. What we haven't discussed yet are the many new, specialized REITs that now provide investors with unique diversification benefits. These subsectors include billboards, farms, prisons, and timber. And while there are no publicly traded parking garage, amusement park, stadium, or airport REITs at this time, they might not be that far off.

Two interesting (already existent) new REIT classes we discuss in this chapter are gaming and cannabis. Both of these subsectors have recently entered REIT‐dom and have performed extraordinarily well so far, with good reason to expect more positive results from here.

Gaming

The last 40 years have seen lots of legalizations when it comes to commercial casinos. Recognizing the tax gold mines they'd been previously prohibiting, states are now increasingly open to businesses that had originally been sequestered in Las Vegas, Atlantic City, and Native American reservations.

Just one example is Pennsylvania, where gaming now represents close to a quarter of its state tax revenue. And New York, Nevada, and New Jersey, among others, have similar stories. Twenty‐five states have “gone to the dark side” at last check ...