First of all, there are many factors that can determine how any particular real estate investment trust (REIT) performs, and most don't have anything to do with who is residing in the White House. With that in mind, there are certainly some REITs that could do better with a particular president.
One big area where the two candidates differ is their plans for handling the COVID-19 pandemic. I don't want to get too political here, but the general reality is that Democratic presidential nominee Joe Biden takes a more conservative approach to the virus, encouraging things like a nationwide mask mandate and a more cautious approach to reopening. On the other hand, President Trump generally wants to reopen the economy and keep it that way, even if virus cases spike before a vaccine is widely available.
So, it's fair to say that REITs that depend on the economy staying open and social distancing measures gradually relaxing could stand to benefit the most if President Trump is elected to a second term. Here are three in particular that could stand to benefit in such a scenario.
Relaxed restrictions are this hotel operator's best friend
There aren't any hotel REITs that are doing great right now, but some are making a comeback quicker than others. For example, leisure travel is coming back quite strong (as opposed to business travel or group events), so hotel REITs focused on leisure travel are mostly seeing occupancy rebound nicely.
On the other hand, hotels focused on group events like conferences, conventions, and large meetings are still largely doing no business. And that's why Ryman Hospitality Properties (NYSE: RHP) could be a big beneficiary of a second Trump term. Not only does Ryman own five large-scale group-focused hotels under its Gaylord brand, but it also has a portfolio of entertainment venues such as the Grand Ole Opry in Nashville.
Group events just aren't a thing right now. And to be fair, the demand is there -- Ryman's rebooking numbers for cancelled events have been very strong -- it's just a question of when it can get back to business. With top-notch management, a strong balance sheet, and iconic assets, Ryman will likely do well long-term no matter what, but a more reopening-friendly administration could certainly be a positive catalyst.
Movie theaters could possibly get back to business quicker under a Trump administration
EPR Properties (NYSE: EPR) is an "experiential" REIT, with a portfolio of properties that includes water parks, ski resorts, golf attractions (TopGolf is a major tenant), and much more. But it's the roughly 45% of rental income that comes from movie theaters that is the big question mark.
It's no secret that the movie business has been performing terribly. Studios continue to push back the releases of the most anticipated movies, and one major operator (Regal) has decided to largely shut down its operations. While I'm convinced the demand will be there for going to the movies after the pandemic-era restrictions are lifted, it's a question of whether it will happen before the major movie theater operators run out of money.
Back to school means profits for this REIT
American Campus Communities (NYSE: ACC) is the only REIT that is exclusively focused on student housing.
Obviously, colleges being forced to close due to the pandemic is bad for this company. In the third quarter of 2020, when many colleges remained either closed or limited in terms of in-person instruction, American Campus Communities' same-store net operating income was 14% lower than in the same quarter last year.
Some colleges are planning to increase the availability of in-person instruction and other activities for the Spring 2021 semester, which could help fill the roughly 10% of vacant units in the company's properties. Of course, if COVID-19 cases were to rise significantly, these schools could be forced to reverse course, and that could be even more likely if the White House changes hands.
Just one factor
As a final thought, it's important to reiterate that the outcome of the presidential election is just one factor that could influence the performance of these REITs. So don't buy them just because you think Trump is going to win. Get to know the underlying businesses and decide whether they're a good fit for your investment strategy over the long run, no matter who is in power.