The real estate sector has been one of the biggest winners since the positive COVID-19 vaccine data started to emerge, and this is especially true for retail REITs, hotel REITs, and some of the other REIT subsectors that were hard-hit by the pandemic. In this Nov. 17 Fool Live clip, two experts from The Motley Fool's real estate brand -- Millionacres real estate analyst Matt Frankel, CFP, and Millionacres editor Deidre Woollard -- discuss which REITs are likely to be the biggest beneficiaries as the COVID-19 pandemic starts to wind down in 2021.
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Deidre Woollard: Well, that's a nice pivot for the second half of our hour here which is talking about reopening REITs and we want to have this conversation right now because we're seeing what's happened this week and last week with the impact of hopeful vaccines with Pfizer (NYSE: PFE) and Moderna (NASDAQ: MRNA). All of a sudden it's been really good news for a lot of retail and hotel REITs to have suddenly seen a little bit of hope which has been kind of nice.
Matt Frankel: Yeah. Okay. Can I brag for a minute here?
Deidre Woollard: Please do.
Matt Frankel: I see an excellent comment in the Q& A from Cabot right there. This Empire State (ESRT -0.65%) is now my top holding, thanks to Frankel. My friends rolled the their eyes at me too.
Deidre Woollard: Nice.
Matt Frankel: Up until about 10 days ago, Pinterest (NYSE: PINS) was my top holding because I bought it at the bottom of the pandemic and it tripled. Empire State's now my top holding, after this. It's up 60 percent over the past week and a half. So it changed the dynamics and my portfolio a little bit. But a lot of these stock that I'd been saying are fantastic bargains for a while, everyone was rolling their eyes at me after I hear that, the eighth and ninth month of this pandemic going on. Like, "When is he going to stop talking about this? He's wrong." Let me just run through a couple of these numbers from some of our favorite REITs. I'm sorry, I'm going to make you type more takers into the Internet.
Deidre Woollard: I'm ready.
Matt Frankel: But I mentioned Empire State was up 60 percent since last Monday. That's a little over a week, 60 percent in just a little over a week. The biggest mall operator in the world, Simon Property Group (SPG -1.67%) up 30 percent in the past week. Tanger Outlets (SKT -0.37%) up 34 percent. EPR Properties (EPR -0.66%), the movie theater, heavy REIT that we'll talk about in a little bit, up 37 percent. Deidre, how much do you think Ryman Hospitality Properties (RHP -1.45%) is up since last Monday, if you had to take a guess?
Deidre Woollard: I had to take a guess 15 percent, maybe 20 percent.
Matt Frankel: 48 percent since last Monday. So you're seeing a lot of these REITs really breathe a sigh of relief. Like you said that was a good segue because stocks hate uncertainty. When the vaccine data came out, a lot of uncertainty was lifted. This is still going to take a long time before any of these get back to normal especially the malls. The malls, the inner city offices like Empire State, The Observatory, it's going to be a long time before traffic at the top of the Empire State building looked anything like it did in 2019. But, this added an element of certainty where there really wasn't any going into this. We knew a vaccine was coming. We were hoping it would be 60 percent to 70 percent effective. We saw that it was going to be 90 percent effective. Then we saw that there were two of them. Then we saw that the side effects weren't as bad. So I was hearing horror stories about that it's a two shot vaccine and the second one will put you out of commission for three days. I was hearing horror stories like that. It turns out that really not the case on a widespread basis. So this gave us a lot of certainty to these rumors. It was positive certainty, it was better than expected data. But it's going to take some time to roll-out. There's light at the end of the tunnel. You're seeing the REITs that really have the financial flexibility to wait until everyone's vaccinated. That's where you're seeing the biggest benefit like Empire State has over a billion dollars of liquidity. EPR has a billion dollars of cash sitting on its balance sheet. So the ones that can really wait it out, you're seeing them breathe a big sigh of relief. Liquidity and financial flexibility has been everything in this market and now even more so. Now you're seeing that really pay off now that there's some light at the end of the tunnel.
