SL Green Realty Corp. (SLG.MX)

Why a focused portfolio is key for real estate stocks

The housing market had a rocky year in 2023, but real estate stocks proved fruitful for some investors. Or did they? Adam Johnson, BullseyeBrief.com Portfolio Manager, joins for another edition of Good Buy or Goodbye. Johnson points towards Alexandria Real Estate Equities (ARE) as a Good Buy. He states that the company has a great focused portfolio, building very purpose-driven properties, developing only for life science companies like Big Pharma. Second, he describes the tenants as "sticky," meaning they tend to stay in those properties for a long time. In addition, because of growth in the life sciences sector and long-lasting tenants, that equates to a stable cash flow. Johnson points out SL Green Realty Corp (SLG) as a Goodbye. He explains that the company's portfolio is too focused on New York City, rather than spread across the country. In addition, the company has an inconsistent portfolio of properties, of which he considers many to be "duds." In fact, 10 of the company's buildings are in the "Alt strategy" category, which according to Johnson means they do not know what to truly do with them. Click here to see more Good Buy or Goodbye or you can watch this full episode of Yahoo Finance Live here. Editor's note: This article was written by Nicholas Jacobino