Green Street

 

 

New York Times: REITs Promise Shelter in a Stormy Market

According to the NY Times: Investors, shaken by the sell-off in the broader market, are frantically seeking refuge in companies offering buybacks, high dividend yields — anything that can stop the bleeding in their portfolios. And certain real estate investment trusts are quickly becoming an attractive option.

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REITs currently trade at a 15 to 20 percent discount on average to the value of their underlying properties, according to Michael Knott, a managing director at Green Street Advisors, a REIT research and advisory firm in Newport Beach, Calif.

“That’s one of the widest discounts we’ve seen over the last 25 years,” Mr. Knott said.

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Then there is the risk from rising interest rates. “REITs are perceived as interest rate sensitive,” Mr. Knott said. Investors dumped REIT shares over the last few quarters over concerns about when — and by how much — the Federal Reserve will raise rates. REIT total returns, which include dividends, are off 6.3 percent through the end of September 2015.

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To view the full article from the New York Times, click here.