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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
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"Third Avenue International Real Estate Value Fund trades at 10 times earnings, half the valuation of U.S. REITs, despite similar earnings growth. The manager added positions in Spanish homebuilder Neinor and Australian industrial REIT Dexus Industria, deepening exposure to chronically undersupplied residential markets and logistics real estate."
The Third Avenue International Real Estate Value Fund returned 2.23% in Q2 2026, slightly underperforming its benchmark but maintaining strong 10-year outperformance of 5.59% annually. The Fund established two new positions during the quarter: Neinor Homes, Spain's largest homebuilder operating in chronically undersupplied residential markets, and Dexus Industria REIT, an Australian industrial platform benefiting from e-commerce and nearshoring trends. These investments deepen the Fund's exposure to its two highest conviction structural themes at attractive discounts to intrinsic value. The manager highlights an unprecedented valuation opportunity, with international real estate trading at approximately 10 times earnings versus 20 times for U.S. REITs despite similar or better earnings growth. The Fund's underlying holdings continue to grow earnings at high-single-digit to low-double-digit rates, driven by structural tailwinds in undersupplied residential markets across Spain, Ireland, and Poland, and industrial real estate demand from e-commerce, nearshoring, and defense spending. The manager views the current valuation gap as unsustainable and expects resolution through public market M&A, market recognition, or capital rotation from concentrated technology holdings toward real assets.
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