Hello,

Below is a link to our year-end investor letter if you’d like to review. Beneath that is some market color on apartment / SFR rents + projections based on what I’m hearing from REITs we follow.

Year-End Letter

We delivered a 9.4% cash flow yield, which exceeded our income goal.

The next ex-dividend deadline is next Monday (1/31/22). Link to letter below:

Evergreen Real Income Fund Updates

Income Fund Update - Q4 2021

Hello Partners, We’re off to a great start. We achieved our primary goal in 2021: high monthly income. The annualized distribution yield for December was 12.1%. The average distribution yield for 2021 was 9.4%. Below are the full Q4 returns for the Income Fund…

Read more

a year ago · Brad Johnson

Market Update

Rents are high and they’re going higher.

The perfect storm for landlords continues. Surging housing prices + low vacancy + rising wages = huge embedded rent growth.

Apartments

• The stage is still set for record apartment NOI growth in '22 (13.5%)

• Apartment REIT occupancy is at 96.5%, above 2019 levels

• Expenses (taxes, insurance, etc.) are also increasing, just not as fast as rents (expenses projected to be up ~5% in 2022)

• New developments are coming but are behind due to supply chain issues

Single Family Rentals

• Occupancy rates have gone vertical (from 93% to 98% in 2 years)

• SFR rents should grow upwards of 11% in 2022 and 7% in 2023

• Sector has more pricing power than it knows what to do with - If SFR owners are smart they should probably sandbag a bit and not overstrain tenant wallets

Inflation - Housing Components

Market data suggest that prices have even further to rise.

Rent increases will continue to flow through to the shelter component of CPI, which is positively correlated with housing prices.

Housing Components of CPI

Like housing costs, wages are also harder / slower to pull back.

Thanks for reading.

Brad Johnson

Evergreen