Following through on a potential trade I foreshadowed previously.
It came up in the “Portfolio update”:
It came up again in “AAIC Baby Bond Delisting, Dividend Cuts, Scott's Latest Trade, & Foreshadowing a Potential Trade”:
This trade is based primarily on the difference in recent relative performance between two of our equity REITs.
We tend to trade equity REITs less than we trade our other positions.
We aim to follow a primarily buy-and-hold strategy.
Many of our equity REIT positions are in taxable accounts, and taxes are not fun.
Those two points are related. We run the active trading in preferred shares and mortgage REITs through the tax-advantaged accounts.
We generated a tax shield when we swapped part of our position in Crown Castle International (CCI) for more SBA Communications (SBAC). That’s the nicest phrasing for eating a loss in a taxable account.
This is not tax advice. I’m just sharing my trade in the member area.
These trades are both industrial REITs. We expect the sector to perform well over the long term as increased demand drives rents higher.
We’re reducing one position (with a significant gain) and using the proceeds to buy more shares in the other REIT.