Joel Beam notes that REITs have outperformed “meaningfully” versus the broader market since April 30. He continues with, “The opportunity to earn consistent, high-single or low double-digit returns from a low volatility asset like real estate, with an important income component as a part of that total return calculus, is very, very attractive for long term investors…” as a potential result from trade tensions.
Brad Thomas, in an interesting article for Forbes, writes about the advantages of Small-Cap REITs as compared to Small-Cap securities, and the sector in general.
https://www.forbes.com/sites/bradthomas/2019/06/10/small-caps-big-reit-profits/#367f51186616
Not all REITs are created equal. All investors should investigate possible risks and ask the tough questions before deploying hard won capital. Some very good advice from Jussi Askola in this article.
https://seekingalpha.com/article/4261138-dark-side-of-reit-investments-revisited
Kelly Erb from Forbes is writing her annual “Taxes from A to Z” article and just arrived at the letter R, which she has dedicated to Real Estate Investment Trust (REIT) issues. Interesting discussion about the Tax Cuts and Jobs Act implications related to REIT operations and investments.
Jussi Askola provides interesting analysis that smaller REITs have three advantages: (1) easier to move the growth needle, (2) less challenging to analyze, and (3) higher average dividend yields.
https://seekingalpha.com/article/4249833-investors-scoop-up-reit-shares-should-you
This is an interesting article by Stephen McBride about how STORE Capital targets a market that is difficult for Amazon to disrupt and how Warren Buffett’s only real estate stock is found in his 10% stake in them. We also have eschewed the conventional wisdom that REITs should focus on a single property type. If diversity is a strength in your stock portfolio, shouldn’t it also be a strength of your real estate portfolio? Our focus on effective new urbanism and multi-use properties reflects our belief in an awakening desire to escape the gridlock of crowded highways and return to a simpler lifestyle.
If you have never paid much attention to the REIT market, I would encourage you to look at the numbers. Rida Morwa notes in this article that in “20 years, REITs have literally crushed the returns of every other sector with annual returns exceeding 12.5%.” Deloitte is reporting that “97 percent of our survey respondents plan to increase their capital commitment to [Commercial Real Estate] over the next 18 months.”
Dane Bowler writes that apartment REITs have systematically outperformed over time, and by a huge margin based on (1) clean industry structure, (2) location and time specificity, and (3) shadow supply reduction. Since 1992, they have achieved a return of 2743% compared to the 1438% return of the general REIT Index. Interesting consideration of the impact of Airbnb related legislation in the space.
https://seekingalpha.com/article/4235941-apartment-reits-fundamental-and-investment-outlook
Beth Mattson-Teig reports on rising investor appetite for real assets and a move away from publicly-traded stocks to private securities as yields have declined. The non-listed REIT sector is also benefitting from growing demand for income investments for retirement accounts from both institutions and individual investors.
https://www.nreionline.com/reits/non-listed-reits-capitalize-fundraising-momentum
Good news for REIT investors, the IRS clarified rules that allow a 20% deduction off the income received via REIT investments from overall taxable income of eligible investors.
https://bic.financial-planning.com/articles/business-owners-get-irs-rules-on-20-tax-break
