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
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
As REITs continue to outperform S&P 500, analysts like them on both a Yield and FFO basis. Multifamily lease turnover rates approaching all time lows. Looking at REITs with good balance sheets, experienced management, and high value assets — with an emphasis on the latter: REITs with high quality real estate assets are expected to perform well.
Lori Marks closed out 2018 observing that “REITs are better positioned today to deal with challenges that may arise in the broader macro environment.” As a senior credit officer for Moody’s, she shares our opinion that fundamentals will strengthen “as long as the REITs are investing in quality assets with strong operators” related to the senior housing space.
