REITs - Real Estate Investment Trusts - Info & Discussion
- mdorsey
- JenL_2
- shallam
- mdorsey
- mdorsey
- RhyneN
- CyclingInvestor
- RhyneN
- JenL_2
- RhyneN
This archived discussion is "read only".
For the corresponding "live" discussions, post in the active topic forum here.
« Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next »
» JenL_2 - New IRS ruling on REITs
This little clip is from the 8/29 WSJ Tax Report:ARE REITS ON THE RISE for land-owning companies?
Maybe so, thanks to the IRS's recent Revenue Ruling 2001-29. Robert Willens, a managing director at Lehman Brothers, says the ruling should open the door for companies with substantial real-estate holdings to spin off those properties tax-efficiently into real-estate investment trusts. Historically, the IRS determined that REITs, because of their structure, couldn't engage in an active trade or business -- a prerequisite for a tax-free spinoff.
That view changed with the recent ruling, in which the IRS now agrees that REITs could be engaged in an active trade or business. Mr. Willens says the ruling "is a very attractive restructuring opportunity for companies; we've had an awful lot of interest." Others aren't so optimistic, saying that added requirements for a spinoff aren't easily met when a REIT is involved.
Subscribe to WSJ Online @ http://www.wsj.com
......Jen
-- posted by JenL_2
» RhyneN - Re: REITS vs bonds
In response to message posted by shallam:
The principal advantage of REIT common stock over bonds, IMO, is that the dividend from the REIT has the potential to increase instead of remaining the same amount.
For example, here are the quarterly dividends paid by several well know REITs. I am showing the "steps" up (or down), not the number of quarters each amount was paid. I am beginning with the first dividend paid in 1998 and continuing thru the last dividend paid in 2001.
AVB 0.51 0.52 0.56 0.64
ASN 0.34 0.35 0.37 0.38 0.41
EQR 0.67 .071 0.76 0.81
BXP 0.41 0.43 0.45 0.53 0.58
EOP 0.30 0.32 0.37 0.33 0.37 .042 .045
AMB 0.34 0.35 0.37 0.40
DRE 0.30 0.34 0.39 0.43 .045
KIM 0.48 0.57 0.60 0.66 0.72
FR 0.53 0.60 0.62 0.66
VNO 0.40 0.44 0.48 0.53 0.60
WRE 0.27 0.28 0.29 0.31 0.33
Note that most of the REITs I show have increased steadily - some at a much higher percentage than others.
Also note, sometimes there is a backstep, for example EOP, the largest office REIT stepped back from 0.37 to 0.33, and then continued up.
I did not show any, but there have been REITs that have passed the dividend when they got in trouble. Meditrust (MT, now LQI) is a recent example of this. There have been others that have made a substantial cut in the level of the dividend when they got in trouble. It is important to buy REITs with good management and to diversify in the REIT group.
-- posted by RhyneN
» CyclingInvestor - EOP dividends
Actually, EOP has never dropped their dividend.The 0.37 to 0.33 drop which shows up in Yahoo is
an error that has crept in to their db - EOP's
10K for 1999 shows their 98/99 dividends were
(32 32 37 37) (37 37 42 42). These errors are not
that uncommon, so whenever something looks a bit
screwy, it is best to check it out.
-- posted by CyclingInvestor
» JenL_2 - Barron's Interview with Susan Byrne
9/3 Barron's has the latest in a string of interviews with value and fixed income fund investors. They all seem to like REITs:In this market, says a money manager, look for stocks that provide high total returns
by Sandra Ward
(excerpts)
An Interview With Susan Byrne ~.... After lowering her forecast for corporate profits this year and with expectations of modest growth next year, Byrne is keeping sharply focused on "total return" investments -- companies delivering solid earnings growth, paying sustainable dividends, and offering higher returns than what are available from other asset classes. Cyclicals are in her mix, as are real-estate investment trusts and, yes, energy companies..... Her approach, honed in 30 years of investment experience, is simply to buy stocks at a discount to their growth rate in industries that are best positioned according to her macroeconomic outlook.....
Q: What does this mean for portfolios?
A: Beyond cyclicals, people should look for companies that could be considered solid total-return candidates.
Q: Companies that pay dividends?
A: Yes, and companies with the ability to grow the dividend, not just pay it. If we are talking about an environment of slow growth, low interest rates and low inflation, the big competition for your money is 2½%-3% on a money-market fund and 4½% in bonds. For some, there will be high-yield instruments, but that is not my milieu. In that kind of environment, a barbell approach that includes the best cyclical recoverers with the best fundamental valuations -- and that may or may not include technology, depending on your risk tolerance -- as well as good moderate growers with good yields should provide a rate of return modestly above the historical 8%-10% returns of the equity market.
Q: What are some of these total-return stocks?
A:...... And then there are REITs [real-estate investment trusts], which make up a big part of the new-high list. The new-high list is populated with preferreds, convertible preferreds, electric utilities and REITs.
Q: Anything with a yield.
A: Exactly. So rather than trying to come up with some idea and fit it to the market, why don't we just look at the market and see what it is telling us. You can put a package of REITs together, REITs with modest growth prospects but very nice yields and yields that are sustainable. Some companies we have in our portfolio include Vornado and Kimco. We've been adding to Equity Office Properties. Boston Properties is brand new for us. It's a developer of business properties, and the market has been very, very concerned about that because they have exposure not only in Boston but also in San Francisco. We think the concerns may be overdone. Each of the names I've given you has a yield of 6% or more and outlooks for growth in the 10%-plus range. They are all selling beneath net asset value.
Subscribe to WSJ & Barron's Online @ http://www.wsj.com
.....Jen
-- posted by JenL_2
» RhyneN - Re: Barron's Interview with Susan Byrne
In response to message posted by JenL_2:Barry Vinocur sent a Realty Stock Review e-mail today mentioning Barron's interview. He said that out of curiosity he decided to run a 10 year comparison of the annualized total return of Varnado and Kimco against the S&P500 and Berkshire Hathaway (since Buffett got so much publicity about REITs in the Wall Street Journal last week).
He couldn't do 10 years since Kimco was listed 11/29/91. The result of his total return analysis from 11/29/91 through 8/31/01 is:
Varnado 24.7%
Berkshire Hathaway 24.2%
Kimco 20.7%
S&P500 14.3%
The better REITs have performed well in recent years, except for the 98 and 99 drop.
-- posted by RhyneN
« Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next »
Please follow the guidelines set forth in the Suite101 Posting Etiquette when adding to the discussion.