Why a Bear Market is the Right Time to Invest in REITs

Hold on tight, we’re in a bear market. The S&P 500 index has dropped a whopping 15% YTD in 2022. In periods of corrections, investors look toward assets with a margin of safety, which often manifests in the form of solid cash flow and conservative leverage. With the U.S. economy showing signs of a potential recession, now could actually be the perfect time to invest in REITs (Real Estate Investment Trusts).

“REITs can benefit from price increases for rents and from higher real estate values during hotter inflationary periods.” wrote Sam Stovall, chief equity strategist at CFRA Research. Investors see inflation everyday when they’re at the market, the gas pump, or buying a car. Holding onto real assets helps mitigate these detrimental effects whenever inflationary bouts occur.

REITs can be a great way to diversify your portfolio and generate income, especially during periods of economic uncertainty. But why invest in REITs when everyone else says “sell“?

1. REITs are required by law to pay out at least 90% of their taxable income to shareholders in the form of dividends. This makes REITs a great source of regular income during times when other investments may be struggling. Since REIT operators collect revenue from tenants through leases, this revenue is often not interrupted in the short term.

2. REITs tend to be less volatile than stocks, making them a more stable investment during economic downturns.

3. REITs are often less affected by recessions than the overall stock market, and can even provide positive returns during periods of economic turmoil. Streitwise’s last dividend was over 8%, for example, which is far higher than public stock market returns.

4. Investing in REITs can help diversify your portfolio and protect against losses in other areas of the market. While virtually every asset class is down this year, non-traded REITs like Streitwise have seen positive returns through the year and have target returns that aim to be far higher than comparative investments.

Regardless of market factors over the rest of the year, we are comfortable operating in the current environment. Why?

We have always invested with downside outcomes at the forefront of our underwriting.
We generate a majority of our revenue from established companies with strong financial wherewithal.
We do not use excessive portfolio leverage.

Read more about how REITs and real estate are a natural inflation hedge.

Alex Wills

Mr. Wills is the Marketing Director for Streitwise and leads investor acquisitions strategies and efforts.

Prior to joining Streitwise, Mr. Wills was Head of Paid Media at Bitcoin IRA and Fortress Gold Group. Previously, Mr. Wills was the Director of Lead Generation at GTMA, a real estate marketing agency, where he created the paid media department that oversaw a large nationwide portfolio of multifamily properties. Mr. Wills holds a Bachelor of Science degree in Marketing from the University of Florida.

SW Manager, LLC (“Manager”) is a wholly-owned subsidiary of and controlled by Tryperion Holdings, LLC (our “Sponsor”). Manager is the external manager and advisor of 1st Streit Office Inc. (“1st Streit Office”) and 1st Streit Office Operating Partnership LP (our “Operating Partnership” and, together with 1st Streit Office, “Our Current Offering”). 1st Streit Office is the sole general partner of our Operating Partnership, through which all of our assets will be owned and substantially all of our operations will be conducted. All references herein to “Streitwise” refer, as applicable, to Manager, 1st Streit Office, the Operating Partnership, or any of their affiliates (collectively, the “Streitwise Entities”). Unless explicitly stated to the contrary, all references to “we,” “us,” and/or “our” shall refer to the Streitwise Entities. By using Streitwise, you accept our Terms of Service and Privacy Policy.

An offering statement regarding this offering has been filed with the SEC. This offering is structured as a non-traded real estate investment trust, or “REIT,” under Regulation A+ of the JOBS Act. The SEC has qualified that offering statement which only means that Streitwise may make sales of the securities described by that offering statement. It does not mean that the SEC has approved, passed upon the merits or passed upon the accuracy or completeness of the information in the offering statement. You should read the Offering Circular before making any investment which is available here: streitwise.com/oc

You may have been referred to Streitwise by a third-party (“Solicitor”). Compensation to any Solicitor may be up to $200 per email registration. A Solicitor may promote and/or may advertise Streitwise’s investment services and may offer independent analysis and reviews of Streitwise’s services. Streitwise and any Solicitor are not under common ownership or otherwise related entities. We cannot ensure the accuracy of the data provided from any Solicitor.

Performance: Past performance is not a guarantee of future results. All historical returns, target returns, or hypothetical projections may not reflect actual future performance.
Risk: This investment involves a certain level of risk and may result in partial or total loss. We cannot guarantee that we will reach our target return for our investors.
Tax: Prospective investors should confer with their tax advisors regarding the tax consequences based on their particular circumstances. Neither Streitwise nor any Solicitor assumes responsibility for the tax consequences for any investor.
Liquidity: Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term should not invest. See Stockholder Redemption Plan in the OC.

¹ Dividends & returns: Current annualized dividend based on the most recent dividend declaration as of the quarter ending 3/31/2024. Dividend return calculations based on NAV at the time of dividend return. 1Q24 dividend payout of $0.11/share equates to a 6.2% dividend based on the current NAV. The REIT has averaged a 7.2% annualized return since 2020 and a 8.3% annualized return since 2017 based on the average NAV for the respective periods. See Quarterly Report for all returns history.
² Source: FTSE NAREIT All Equity REITs vs S&P 500.
³Sponsor Performance: Related to investments by Sponsor, Tryperion Holdings, as part of one of its prior programs, and not of any of the Streitwise Entities. Reflects gross IRR on realized investments in the Sponsor’s investment portfolio since inception. Sponsor performance data as of 4Q23.
⁴Target returns: We will seek to invest in real properties and other real estate-related assets that we believe can produce a strong return through a combination of cash flow and appreciation. We cannot guarantee that we will reach this target return for our investors.

This page may contain forward-looking statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in the Offering Circular. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Company’s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

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