Wealth Preservation

A Strong Defense: Winning With REIT Wealth Preservation Strategies

Don’t lose what took a lifetime to build. Traditionally ‘safe’ investments don’t cut it, so where do sophisticated investors turn to preserve their wealth?

Sometimes you win by playing not to lose. 

Creating wealth is one thing; preserving it is quite another. A key component of ensuring sustainable income and protecting a lasting financial legacy is, of course, wealth preservation.

It’s a simple enough definition—position accumulated assets in a manner that won’t lose value over time, regardless of adverse market conditions. However, execution is more complicated, heightened by the fact that traditionally safe(r) investments in times of turmoil are themselves now struggling to perform. We know that bonds are beaten up, but a recent reminder illustrates how badly.

“Bonds May Be Having Their Worst Year Yet,” a New York Times[1] headline screamed before adding, “This has been the most devastating time for bonds since at least 1926, and maybe in centuries.”

Wealth preservation is essential for high-net-worth individuals approaching retirement, especially in a down market when asset withdrawals combine with poor performance to decimate the portfolio. Financial advisors and their clients are desperately searching for yield, and non-traditional, non-correlated alternative asset classes like real estate investment trusts (REITs) are increasingly it.

The income and diversification properties inherent in REITs are especially appropriate with all that’s happening, including historic inflation, astronomical gas prices, and a war in Europe. Notably, all major REIT sectors have outpaced the S&P 500’s total return performance since 1972.[2]

And they’re increasingly in demand. A recent survey found that “the biggest objective respondents identified for high-net-worth individuals and family offices when investing in real estate was the preservation of wealth …”[3]

It’s all well and good, but investors in the wealth preservation stage hardly have the time (or desire) for direct real estate investment, once again making passive involvement in the pooled and managed REIT structure particularly appropriate.

“REITs are a critically important part of any portfolio with a goal of wealth preservation, specifically for their diversification and non-correlated benefits,” Noyack Managing Principal CJ Follini said. “When REITs are properly invested, they provide stability—stability of growth, income and yes, protection.”

As crucial in preserving wealth is including investment strategies to minimize inflation, a key REIT feature. REITs provide an inflation hedge, a known benefit of real estate assets in general. As inflation rises, rents and leases tend to increase as well, and REIT investors enjoy the higher returns.[4]

It’s a timely portfolio preservation tool, providing reassurance in periods of increased market volatility.

To Protect and Preserve (Wealth)

Noyack Capital is a family-run firm with a revolutionary concept—EVERYBODY should have access to world-class private investments. 

Noyack employs a low-volatility, stable strategy that invests in Commercial Real Estate (CRE) and provides consistent rent with increases compounded over time. Its proven 38-year track record of CRE investing makes it ideally suited to clients looking for asset growth’s upside potential combined with wealth preservation’s downside protection

“My father built something great,” Noyack Managing Principal CJ Follini said. “He never talked about how much money he made. Instead, he said, ‘That person has been with us for 50 years. I put those kids through college, and that family bought a house because of working here.’”

Noyack’s balanced approach of thematically-linked investments is complementary enough to achieve scale yet diversified enough to address risk properly. They include properties that support the supply-chain infrastructure in the delivery of a particular good or service (dry warehouses, cold storage, medical offices, etc.). 

Increasing demand for e-commerce and supply chain infrastructure means the firm’s dividend is expected to grow over time, as is the principal value of its properties. Noyack is an early adopter in this rapidly growing market, which will continue to prove its worth as the infrastructure and logistics landscape evolves.

If wealth protection is a priority, REITs are right for you.

 

[1] “Bonds May Be Having Their Worst Year Yet.” nytimes.com. Sept. 30, 2022

[2] “REITs vs. Stocks: What Does the Data Say?” fool.com. March 24, 2022

[3] “Wealth Preservation Remains a Top Priority.” wealthmanagement.com. March 11, 2021

[4] “REITS and Inflation Protection.” reit.com. 2022