Monday, June 24, 2013

CRE Show Offers Detailed Primer on Investing in REITs


Michael Bull

 ATLANTA, GA (June 24, 2013) – With the commercial real estate markets beginning to recover, many investors are looking to brighten their financial future by buying shares of real estate investment trusts (REITs).

The most recent episode of the “Commercial Real Estate Show,” hosted by Michael Bull of Bull Realty, provided an enlightening primer on REITs, giving listeners a thorough history of the organizations and detailed tips on investing in them.

 Guests included Brad Case, senior vice president of the National Association of Real Estate Investment Trusts; Keven Lindemann, director of SNL Real Estate; and Brad Thomas, senior vice president of capital markets at Bull Realty. Thomas regularly writes about REITs for Forbes, Seeking Alpha and The Street.

Brad Case
REITs can be publicly traded or privately held and must distribute at least 90 percent of their taxable income to shareholders. Equity REITs own and often manage commercial properties, while mortgage REITs buy mortgages and mortgage-backed securities.

 Historically, REITs have provided investors with strong returns, and those returns have proven to be less volatile than those offered by other stocks, Case said. “Holding REITs really benefits retirement investors because it reduces the volatility of their overall portfolio,” he said.

 Over the last year, the U.S. REIT market has delivered a total return of nearly 19 percent, according to Case.

Keven Lindemann
“If you believe that having exposure to real estate in your investment portfolio is a positive thing – as I think we all do – and you have a reasonably long-term horizon, REITs have always paid off,” Lindemann said.

 When evaluating a REIT, an investor should consider such metrics as the company’s funds from operation and net asset value, as well as the strength of its management team, Thomas said.

 “When you invest in a public REIT today, you are not only investing in the brick and mortar, you’re investing in that management team,” he said. “I think it’s very critical to understand who manages these REITs and what their value proposition is all about.”

Brad Thomas
“What you really want to see is a strong management team that has a good way of identifying what part of the real estate industry they know best and see that they have a good strategy to focus on that part of the industry,” Case said.

 In the case of publicly traded REITs, investors can easily access a wealth of information about the firms, guests noted. The companies are required to make SEC filings every three months, and their quarterly earnings calls can be heard on various websites, such as Seeking Alpha.

 With the commercial real estate markets in various states of recovery, the future for REITs is bright, guests said. “I do expect the economy to continue to strengthen slowly but steadily, and that’s really going to be good news for people who hold REITs in their investment portfolios,” Case said.

 The entire episode on the U.S. REIT market is available for download at www.CREshow.com. The next “Commercial Real Estate Show” will be available on June 27 and will feature interviews from the IMN Special Assets and Workout Conference.

  For a complete copy of the company’s news release, please contact:

The Wilbert Group
Please note new office number: (404) 549-7150
Cell: (404) 405-2354

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