Third Ave.: Florida to Ground Zero
03/28/2003 12:00 am EST
”For my own accounts this quarter, I am focusing exclusively on real estate; my goal is to gradually get the real estate component of my total portfolio up to 15% to 20%. As for my personal portfolio, my current mix is 30%-40% fixed income and 40% to 55% in equities. I believe real estate is now a good counterbalance to this portfolio mix, because it tends to move independently of stocks and bonds.
“I love Third Avenue Real Estate Value (TAREX). It is not a large fund, with assets only a little above $300 million. Aside from myself, I don’t know of many other analysts who follow this fund. Overall, I like its REIT mix, which includes Public Storage and Vornado, both of which are independently on my master buy list. Timber is also a good portfolio component, and Third Avenue holds stakes in Deltic Timber and Plum Creek Timber.
”Further, Third Avenue holds big positions in both Forest City and St. Joe, two publicly traded stocks that I particularly like. The Ratner family does a great job with Cleveland-based Forest City. Meanwhile, I have a powerful and long-standing interest in St. Joe, which owns 3% of the land in Florida, including a lot of mega-valuable coastline property.
“The fund also owns a big position in Brookfield Properties. You may not be familiar with the name, but Brookfield owns nearly all the adjacent property to the World Trade Center. Brookfield is lower Manhattan’s largest commercial property owner, and the company will certainly benefit from the rebuilding of Ground Zero.
”Overall, by purchasing Third Avenue Real Estate Value, you are getting a very nice mix of real estate investment trusts and real estate operating companies. I am emphasizing this fund within my own current buying, as should you. Don’t forget, when you invest in this fund your investment is backed by a proprietary, finite resource. Begin now to make this sector a 15% to 20% component of your overall investment portfolio.”