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| 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.
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| 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.
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| 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.”
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| 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
E-mail: sursery@thewilbertgroup.com
Please note new office number: (404) 549-7150
Cell: (404) 405-2354
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