Steve Johnson, CIO of Intelligent Investor Funds, says that he is investing in the theme of US commercial property trusts, which are trading well below fair...

Steve Johnson, CIO of Intelligent Investor Funds, says that he is investing in the theme of US commercial property trusts, which are trading well below fair value and could be potential takeover targets. They listed in the REIT bubble leading up to the GFC and have been left stranded in Australia. No-one's interested in them. We own one called RNY Property Trust (ASX: RNY), it's a bunch of commercial property around Manhattan. These things trade at 8.5% Cap-rates. So you can borrow money in the US at 3% and you can buy yourself an office property that yields you 8% on an 80% occupancy rate. Now if the economy improves, that occupancy goes up. We think there's a 20-30% improvement at a gross asset level and we're buying it at a massive discount to its NTA here in Australia. Johnson says this theme has a way to run.