Weekly Series: mREIT And BDC Recommendations (And Price Targets) As Of 5/18/2025
Summary
- Last week we rolled out additional updates to the REIT Forum Dividend Portfolio Tracker. New code allows the tool to bypass most throttling measures in Google Sheets.
- The industrial REITs saw a nice bump last week due to improved tariff situations.
- Most mREIT BVs were relatively unchanged this past week (ARR declined a bit due to the monthly dividend accrual). Agency mREIT BVs slightly underperformed the other 3 sub-sectors.
- All BDC NAVs slightly increased this past week as middle market/high-yield spreads continued to tighten some.
- I'm already projecting a mild recession in 2025 - 2026. That's already reflected in the price targets and modeling. Still, recent updates to tariff/trade policy have remained net positive.
We aim to retain the same layout from week to week. I hope that makes it easier to find the parts that are most relevant to you.
Weekly Notes From Colorado Wealth Management Fund
Positions: 0 trades
Commentary: We posted the Portfolio Update last week.
I also prepared additional updates for our REIT Forum Dividend Portfolio Tracker. Now it can handle even more shares and we’ve found ways to largely bypass most of the throttling issues Google Sheets can create.
Industrial REITs had a nice bump on Monday of last week following the announcements that the United States and China would, at least temporarily (90 days), have a dramatic reduction in the new tariff rates.
Scott’s Ultra-Brief Summary
“Most mREIT BVs were relatively unchanged this past week (ARR declined a bit due to the monthly dividend accrual). Agency mREIT BVs slightly underperformed the other 3 sub-sectors this past week. All BDC NAVs slightly increased this past week as middle market/high-yield spreads continued to tighten some. As a reminder for the BDC recommendation ranges/price targets, I'm already projecting a mild recession in 2025 - 2026. That's already reflected in the price targets and modeling. Still, recent updates to tariff/trade policy have remained net positive in my opinion (not a "best case" scenario but far from a "worst-case" scenario either). I continue to believe just having the possibility of negotiations is positive. This includes the recent UK and China deals/delays. Hope you're having a good weekend.”
Weekly Notes From Scott Kennedy
Positions: 0 trades this past week.
In general, I am being patient regarding selectively deploying capital in attractively-valued mREIT common stocks with a less attractive risk/performance rating. My sector allocation to mREIT common stocks remains high (thus aligning with continuing to hold existing positions and selectively adding for future appreciation over the long-term). Patience remains key as catalysts/events will take time to play out (especially within commercial/multifamily mREITs). I will continue to remain disciplined regarding “picking and choosing” investments and lot sizes.
BDC Weekly Change: High yield/speculative-grade credit spreads slightly - modestly tightened this past week. We have now seen a decent retracement after a very volatile April 2025. This was mainly due to continued optimism regarding tariff negotiations. Thus far, spreads have slightly net widened during calendar Q2 2025 (through 5/16/2025).
BDC Other Comments (Current Week):
Slight tightening occurred during January - most of February 2025 which reversed course and notably net widened during late February - early April 2025. This widening had been correctly anticipated for quite some time now (not a surprise) and reflected in recommendation ranges/price targets. That said, as a direct result of the recently-announced Trump tariffs, spreads widened more-than-anticipated specifically during the weeks of 4/4/2025 - 4/11/2025. I previously assumed high-yield/speculative-grade credit spreads would modestly-notably widen during 2025. However, a good chunk of this projected 2025 widening occurred within merely 3 weeks (late March - early April 2025). However, spreads have modestly tightened during mid April 2025 - mid May 2025.
This will be a trend/metric that needs close monitoring. If spreads widen out above my previously-projected modeling for 2025, sector-wide recommendation range downgrades will likely occur in the future (just a heads up). We are not there yet. With the past month’s spread tightening, there’s “more room to breathe” in this regard. Let us see how things play out.
Calendar Q4 2024 + Q1 2024 + Q2 2025 Recommendation/Target Range + Risk/Performance Upgrades (Downgrades) (Running Tally):
