REITs - Real Estate Investment Trusts - Info & Discussion: Buying opportunity????

» RhyneN - Buying opportunity????

Jen asked, >>Rhyne - if you're around - what say you? Buying op in REITs approaching?.....Jen<<

I wish I had a crystal ball. The most watched REIT index, the Morgan Stanley REIT Index, symbol RMS, closed yesterday at 384.38, down about 9% from the all time high of 421.91 which was set earlier this year. RMS is a total return index and includes both stock appreciation and dividends paid.

I have been buying REIT preferred stocks lately. I am retired and living on income from investments so the bird in the hand is appealing in a downturn. However, I have not sold my REIT common stocks and I have a lot more of them than the REIT preferreds.

Some REIT preferreds that I have bought lately are HRP-A and HRT-A, which are related companies in the office and lodging sectors, respectively. They both have very good balance sheets and are conservatively run. They don't grow as fast as some others, but growth is not as important as dividend safety in a preferred stock. These are yielding over 9.5%. They are first callable in 2006 and 2004.

I bought some HMT-C one day when someone was unloading it and got a very good price and a yield of 13.5% locked in at least until a 3/06 call date. HMT owns Marriott lodging properties. These difficult times present some opportunities.

Another good preferred that I have bought recently is the PSB-D. It also has a 2006 call date and is yeilding in the high nines.

There are some REIT common stocks that are likely good buys now, but I have not been aggressive in buying common stocks. We may still have some drops to go. The apartment REITs dropped a lot yesterday after a statement in a conference by the CEO of EQR, the largest apartment REIT, that earnings would be off in the quarter just ended and the current quarter because of the slowdown and aftermath of the terrorist attacks, and he thought 2002 might also be slow.

Of course, if you own REITs that pay a good dividend, you will be paid well to wait until the next upturn.

-- posted by RhyneN