Recent Sale: Financials Reevaluation Cost of Capital After SVB Collapse.
We sold several financials and REITs last week as the collapse of Silicon Valley Bank was unfolding.
Financials: US Bankcorp (USB), Citigroup (C). Both have taken on fixed income losses with interest rate increases. Thus, the tangible book value has taken a hit causing us to reconsider our valuation.
REITs: Brandywine Realty Trust (BDN), Chicago Atlantic Realty Trust (REFI), AFC Gamma (AFCG). The cost of capital is increasing and will shrink distributable funds from operations which could result in distribution cuts. Stocks could react negatively to these events even though they look inexpensive.