How would you like to own Caesars Palace in Las Vegas?
Well, now you can.
Thanks to a 1960 law, ordinary investors can own a part of specific buildings.
So you can own casinos, hospitals, defense contractors, warehouses, cell towers, and data centers…
And the kind of buildings you want to own are the ones that are “mission critical.” Meaning they’re crucial to a business or modern life – things people will need and want regardless of what’s going on in the world.
Take Caesars Palace for example.
If you buy shares in a company called VICI Properties (VICI), you will be a partial owner of this iconic casino and 49 more trophies just like Caesars located in the U.S. and Canada.
Caesars Palace is a mission critical building for the gaming real estate sector in Las Vegas. And the thought of Caesars Palace going dark on the Las Vegas Strip… is hard to imagine.
Even during the pandemic, it collected 100% of its rent.
At Wide Moat Research, our goal is to help you find the best income-generating plays. And thanks to this law, you can become an owner of some of the finest real estate income opportunities on the planet.
Today, I’ll walk you through how to identify mission critical real estate… And more importantly, how you can profit from it.
Mission Critical Mindset
As a real estate developer for over 25 years, I know a thing or two about finding irreplaceable real estate.
It was part of my job to scout out 50-yard line sites for companies like McDonald’s, Wal-Mart, Advance Auto Parts, Blockbuster Video, and Walgreens.
I have to admit: I became pretty darn good at spotting high-traffic sites. This typically included a corner with easy entry to build and leaseback to these corporate brands.
Most of the time, the site selection process was correlated to the success of the business.
But over the years I learned that it wasn’t just the real estate that was important to the value creation process.
The key to profiting from any piece of real estate long term was to identify a mission critical building that was a part of a mission critical business.
Take, for example, Blockbuster Video.
I built and leased back around a dozen stores to the video franchise.
But regardless of how good the real estate was, Netflix eventually forced Blockbuster to surrender, and the buildings became empty.
I identified and developed mission critical buildings for Blockbuster, but it didn’t matter because the company itself lost its status as a mission critical business over time.
Once I understood this and adjusted my focus, my real estate empire grew. I began to scout out not only the best locations but also screen for the best tenants… The ones with lasting models of repeatability.
Blockbuster was a great learning experience for the “young Brad Thomas” as I began to recognize that the key to creating wealth in this market was not only to adhere to the adage of “location, location, location…” But to also find sustainable tenants with mission critical business models.
In other words, I needed to find tenants in which the real estate I provided was essential to the business they operated.
Whenever I found a customer like that, I knew they would pay me an arm and a leg to occupy the space. And they would rent for a long, long time.
Become a Mission Critical Landlord
Going back to Netflix… It upended Blockbuster’s model and has become the largest video streaming service in the country.
What buildings do you think are mission critical to Netflix’s business model?
The answer: Data centers.
Technology has become an essential element for most every real estate subsector. And data centers are at the heart of the digital ecosystem, providing critical infrastructure.
Every time you make a purchase on your smartphone or computer, it sets a sequence in motion that travels through a network of communications including data centers.
They’re very specialized real estate facilities that house computer servers and network equipment within a highly secure environment. Some of the equipment they house includes mechanical cooling, electrical power systems, and network connections.
Typically, these landlords own the building, the power and cooling infrastructures, and exchanges and cross-connections. Then their customers provide their own servers, storage, and networking equipment.
These large data center landlords cater to hyperscale operators like Meta, Google, and Microsoft, making the real estate 100% mission critical.
And thanks to the law I told you about above, you can profit from that.
Right now, I am recommending a unique investment strategy that specifically targets Amazon’s mission critical data centers for our members of our Intelligent Income Investor service.
Amazon delivers over 1.6 million packages to front porches across the country every single day. And by owning the critical assets that Amazon needs to stay in business… Amazon will essentially pay you for the rights to use it.
To hear more about this opportunity and cash in on this strategy, click here to watch a presentation I just put together to explain everything.
Learn from my mistake. Make sure you invest in mission critical real estate for mission critical businesses.
This is the key to growing your portfolio through all kinds of markets.
Happy SWAN (sleep well at night) investing,
Brad Thomas
Editor, Intelligent Income Daily