TRADE ALERT - Core Portfolio June 2026
Transaction Summary:
We sold our position in Caesars Entertainment (CZR).
We redeployed the proceeds into SBAC Communications (SBAC), Sun Communities (SUI), International Workplace Group (IWG), and Blue Owl Capital (OWL).
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We are issuing a trade alert today to let you know that we are selling our position in Caesars Entertainment (CZR) and redeploying the proceeds into several of our existing holdings.
Before getting into the details of the trade, I want to take a small victory lap.
This is already our fourth buyout of the year.
First, National Storage REIT (NSA) received a buyout offer.
Then came Whitestone REIT (WSR).
Then Sila Realty Trust (SILA).
And now Caesars Entertainment (CZR).
This is not a coincidence.
We have said for a while that M&A activity would likely accelerate across listed real estate companies because valuations have become far too low relative to private market values. Strategic buyers, private equity firms, and other well-capitalized investors are taking advantage of the public market’s excessive pessimism, and we are benefiting from that.
Time and time again, we have managed to identify potential buyout targets before the deals were announced, and this has now become an important source of value creation for our portfolios.
That said, I also want to be transparent: Caesars was not a huge win for us in absolute terms.
Our average purchase price was $29.15, and with the stock now trading slightly above $30, we are getting out only with a modest gain.
But in context, I still view this as a very good outcome.
Our initial timing was unlucky. We began buying Caesars in 2024, and shortly afterward, cyclical companies, including gaming stocks, sold off heavily. At the lowest point, we were down nearly 50% from our first purchase.
But we remained patient, bought the dips, lowered our cost basis, and are now exiting the position with a small gain.
That is a win.
Why We Are Selling Now
Fertitt has agreed to acquire Caesars for $31 per share in cash.
The deal was announced a little while ago, but we did not sell immediately because the spread to the offer price was still too wide. We felt that the discount provided enough upside to justify holding.
That has now changed.
With the stock now trading above $30, most of the upside has already been captured. Investors who continue holding are essentially waiting for the remaining few percentage points between the current share price and the $31 offer price.
In my view, that is no longer attractive on a risk-adjusted basis.
This deal could take quite some time to close. It is a major transaction in the casino space, and the buyer already owns casinos in several markets. This could create regulatory complexity, potential market overlap issues, and a longer approval process.
Until the deal closes, the stock is likely to become dead money.
And in the unlikely but still possible scenario that the deal fails, Caesars could drop significantly.
So the trade-off is no longer compelling:
We could wait for a few more percentage points of upside, but we would be accepting deal risk, regulatory risk, and opportunity cost.
We would rather take the gain, eliminate the risk, and redeploy the capital into opportunities that we believe offer much better upside from here.
What We Are Buying Instead
We are selling our full position in Caesars and redeploying the proceeds into four of our existing holdings:
1) SBA Communications (SBAC) is one of the positions that we are increasing today. Earlier this year, the stock surged on reports that KKR (KKR) and Brookfield (BAM) had both approached the company to discuss a potential buyout, with a rumored potential price of around $250 per share. In the end, no deal was reached, and the stock has now slid back to roughly where it traded before the rumors emerged, at around $180 per share. We are taking advantage of this weakness to increase the size of our position. In our view, the interest from some of the world’s largest and most sophisticated private equity investors is a strong signal that the public REIT market is undervaluing this platform. SBAC is a massive tower REIT with a $20 billion market cap, and yet private capital still saw enough value to explore a potential transaction. We view that as positive external validation, but we now get to buy the stock again at a much lower price. We also continue to believe that towers should benefit over the long run from the AI revolution, which should increase mobile data consumption and force carriers to keep investing in their networks. SpaceX / Starlink is worth monitoring, but we do not view it as a serious replacement threat to SBAC’s towers. Starlink is best suited for dead zones, rural areas, and backup connectivity. It is not a substitute for tower infrastructure in cities and suburbs because satellite connectivity is slower, more expensive, and capacity-constrained by simple physics: towers are much closer to users and can handle far more data density. Near-term growth has been held back by temporary churn from carrier consolidation and refinancing headwinds, but we expect conditions to improve in 2027 and accelerate further in 2028, potentially returning SBAC to high single-digit annual growth. If that happens, we think the stock will return closer to fair value at $250 per share. We bought 55 shares, increasing our position size by 30%.
