Private Strategies During Economic Downturns
During volatile market times like these, we are glad our portfolios are not solely reliant on price movements of public securities. Many of our private placements continue to cashflow while we wait for an effective global response to COVID-19.
Just this morning, The Wall Street Journal published an article that referenced rental housing as one of the places of safety during uncertain economic times. The article said that “landlords with longer leases often can count on a more stable cash flow than manufacturers or financial companies.” We’ve seen that scenario play out before and were able to collect rental income while we waited for prices to recover. The article specifically highlighted mobile-home-park investments as a safer place during economic downturns. We feel we timed our purchases of mobile-home-parks well as demand has since increased. In addition to our private real estate investments, we recently started investing in wireless infrastructure. The article said that “Communication networks still function even with people staying home, so owners of cell towers and fiber networks are less likely to be directly affected.” As economic uncertainty prevails, we continue to look for opportunities in the private arena that are better equipped to handle market fluctuations.