REITs - Real Estate Investment Trusts - Info & Discussion
- Normxxx
- bob90245
- bob90245
- honeyoneohone
- honeyoneohone
- bob90245
- honeyoneohone
- Kirk
- Normxxx
- Normxxx
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» Normxxx - Re: Re: REITs still doing well
In response to message posted by Kirk:Steer clear of office REITs at this time. The time to buy highly cyclical REITs (such as Office Buildings and Apartments is right after a bust-- for OB that would be right at the end of a recession; for Apartments, that would be at the beginning of a RE up cycle). Right now, the best bet is probably strip-malls. they tend to be relatively independent of the economy, and also do not depend heavily on one or two big tenants.
Record fund flows into REIT funds All the more reason to stay out! I suspected my intuition was steering me right on not getting back into REITs right away! These guys are invariably wrong except towards the very end of a cycle, and they all get out together, creating a panic drawdown. That's when you want to get into REITs. Timing can be nothing more than cleaning up after the elephants.
The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.
-- posted by Normxxx
» bob90245 - ICF, RQI and RLF
.Here are some interesting REIT issues. Not necessarily a recommendation from me. Only for information purposes. Do your own due diligence.
URL: http://www.suite101.com/discussion.cfm/i...Author: honeyoneohone
Date: December 4, 2004
In response to Re: Re: Re: Re: Taking Profits posted by Will_L:I couldn't find how much dividend ICF is paying [4%], but if one wants to have the income from dividends, RQI and RLF are winners too. They are Cohen and Steers closed-end funds. They are both paying about 7.75% now.
Holy moonshot Batman! In 2003, RQI and RLF returned 50%!
-- posted by bob90245
» bob90245 - Articles on REITs and interest rates
Here are two articles that examine the affect of interest rates on REITs.
Investors, Know Your REITs is an interview with mutual fund managers of a REIT fund. So take that into consideration.
This pdf file is also written by Real Estate fund managers.
-- posted by bob90245
» honeyoneohone - Re: Articles on REITs and interest rates
In response to Articles on REITs and interest rates posted by bob90245:.
Thank you, Bob...very interesting article. REITs are especially suitable for tax-sheltered accounts.
-- posted by honeyoneohone
» honeyoneohone - REITs Still Outperforming
.8:08am 05/06/05
REITs outperformed broader market in April (RMS) By Greg Morcroft
NEW YORK (MarketWatch) -- Shares of real estate investment trusts (REITs) outperformed the broader market in April, with the Morgan Stanley REIT Index (RMS) rising 5.3% in the month versus a 1.9% decline in the S&P 500, according to Wachovia Capital Markets researchers. The firm's data show that every REIT sector had positive returns in April, with regional mall, health care, and diversified the best performing sectors while manufactured home, hotel, and mixed office-industrial generated the lowest relative total returns.
http://www.marketwatch.com/news/newsfind...
-- posted by honeyoneohone
» bob90245 - Re: REITs Still Outperforming
In response to REITs Still Outperforming posted by honeyoneohone:You're right! REITs and the S&P 500 were neck and neck during Feb-Mar. In April, REITs pulled away from the pack. Still, this horse race isn't over by a long shot. See you at the finish line in December. <img src=http://www.suite101.com/images/emoteicon...>
-- posted by bob90245
» honeyoneohone - REITs: Goldilocks or Not?
.Merrill's valuation call on six REITs
By Mark Cotton, MarketWatch
Last Update: 4:06 PM ET May 24, 2005
NEW YORK (MarketWatch) -- Merrill Lynch downgraded six real estate investment trusts on valuation grounds Tuesday, saying the outlook for the sector is dependent on the pace of economic growth and the future course of long-term interest rates.
"Our biggest concern is that investors are not pricing risk into the REIT sector and assume that the goldilocks environment -- modest gross domestic product growth coupled with low interest rates -- will continue in perpetuity," said analyst Steve Sakwa.
All six stocks, which were cut to neutral from buy ended lower on the day: Kilroy Realty Corp. (KRC: news, chart, profile) was down 0.9% at $46.06; Boston Properties Inc. (BXP: news, chart, profile) fell 2.1% to $66.80; Simon Property Group Inc. (SPG: news, chart, profile) dropped 1.6% to $68.89; General Growth Properties Inc. (GGP: news, chart, profile) was off 2.1% at $39.04; Pan Pacific Retail Properties Inc. (PNP: news, chart, profile) slipped 1.6% to $64.10, and Regency Centers Corp. (REG: news, chart, profile) fell 2.5% to $55.04.
Sakwa said the downgrades reflect, more than any concern over deteriorating company fundamentals, sharp appreciation in the sector's stock prices over the last two months.
The analyst says REITs have become expensive relative to bonds and equities, noting that the Amex Morgan Stanley Reit index (RMS: news, chart, profile) , which tracks the sector, has risen nearly 13% in the last two months while the S&P 500 Index ($SPX: news, chart, profile) has declined 1%.
"The only metric where REITs do not appear expensive is versus the private market, which continues to experience strong trends in pricing on asset sales due to the low interest rate environment," said Sakwa.
Yet it's prospects for the durability of this low rate environment that leads Sakwa to be more cautious on the sector.
He says that the REIT sector could rise a further 2% over the next 12 months if the yield on the benchmark 10-year Treasury note remains at 4.05% but that it could fall as much as 8% if it rises to 4.6% over the next year.
For Sakwa, the sector is caught between a rock and a hard place.
If the recent slowdown in the economy proves to be just temporary, any pick-up in growth will likely send long-term interest rates higher, hitting valuations.
"On the other hand, if economic growth is decelerating then demand for real estate should slow later this year and into 2006," which would put the sector's earnings at risk, said Sakwa.
-- posted by honeyoneohone
» Kirk - VGSIX vs SnP500 YTD
.In response to REITs Still Outperforming posted by honeyoneohone:
REITs Still Outperforming
<img width=452 height=366 src=http://www.marketwatch.com/charts/int-ad... >
Here I’ve added Vanguard International, VGTSX, and the home building sector, HOM, for an interesting perspective.
<img width=452 height=366 src=http://www.marketwatch.com/charts/int-ad... >
-- posted by Kirk
» Normxxx - Re: VGSIX vs SnP500 YTD
In response to VGSIX vs SnP500 YTD posted by Kirk:REITs will track the RE market.
-- posted by Normxxx
» Normxxx - The outlook for REIT ETFs (IYR, RWR, VNQ)
I stand corrected! I guess REITs follow the interest rate/dividend rate curves.
The outlook for REIT ETFs (IYR, RWR, VNQ)
By J.D. Steinhilber | 25 May 2005
Interesting analysis of REITs as an asset class by J.D. Steinhilber, founder of ETF newsletter and investment management firm Agile Investing. The currently available REIT ETFs are IYR, RWR and VNQ. He writes:
The combination of below-average spreads to 10-Year Treasuries and our outlook for rising 10-Year Treasury yields results in a decidedly cautious assessment of REITs. As of the end of Q1, REIT prices have declined approximately 6% from the start of the year; but remain vulnerable to further correction, especially if bond yields move higher as we expect.
REIT Analysis:
Chart A: REIT yields have fallen in parallel with Treasury yields over the past five years. (Click on charts to enlarge size.)
<img src="http://www.etfinvestor.com/images/reit_6...">
Chart B: Although it is moving up from the lows reached in late 2004, the spread between the REIT yield and the 10-year Treasury yield is still well below the longer-term average of 1.6%. The combination of a below average spread to 10-Year Treasuries and our outlook for rising 10-Year Treasury yields results in a decidedly cautious assessment of REITs.
<img src="http://www.etfinvestor.com/images/01reit...">
Chart C: REITs look particularly overvalued relative to the S&P 500 with the yield spread of REITs to the S&P 500 dividend yield near historic lows.
<img src="http://www.etfinvestor.com/images/reit_5...">
The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.
The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.
-- posted by Normxxx
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