Commercial Real Estate Finance

Posts Tagged ‘REIT investment’

Look on the bright side. Even though the Great Recession led to enormous bankruptcies, high unemployment, depressed asset values, an epidemic of foreclosures, the imminent threat of total financial collapse, and general misery–it  wasn’t all bad.

I could have phrased that better.

What I mean to say is it made things affordable again. If you were looking to buy real estate at a great bargain, 2009 was the time. Of course, no one was spending money in 2009.

After the economy went berserk,  a few people jumped into commercial real estate investment–where there were any opportunities to be found–and profited greatly. Many U.S. CRE markets and asset types have rebounded much faster than other industries, and this success is beginning to make this “alternative” investment sector a top choice for many. Just look at REITs–giant firms becoming even larger thanks to a constant stream of new investment capital.

As certain markets transition from “recovery mode” to “growth mode,” however, the availability of inexpensive opportunities with strong  potential for yield is dwindling. We see this in lowering cap rates (especially for multifamily) and the swelling price of shares in publicly traded REITs. In the U.S, many CRE opportunities are preferable for the risk-averse, those seeking stability over returns.

But where does one go when looking for yield? Michael Hudgins, a strategist for JP Morgan (NYSE: JPM), recommends foreign REIT investment. Mr. Hudgins tells Barron’s, Read the rest of this entry »

As is often the case, this is not my list. I found this ranking in an interesting article on Seeking Alpha, in which Avi Morris names his choices for this year’s Top 8 REITs for Yield Potential, emphasizing the appeal of their tax-advantaged dividends.

(These REITs are ranked in descending order according to their 2011 yields, which means they’re basically in no particular order when it comes to their potential for 2013.)

- Omega Healthcare Investors (NYSE: OHI)

- Senior Housing Properties (SNH)

- EPR, Inc. (NYSE: EPR)

- Sun Communities (NYSE: SUI)

- Campus Crest Communities (NYSE: CCG)

- Highwoods Properties (NYSE: HIW)

- Home Properties (HME)

- HCP (NYSE: HCP)

An interesting list, including several of the less-talked-about REITs. There’s a good mix by asset class, with both diversified and specific-asset REITs making up this ranking: If we break this list down by asset class, we have 3 healthcare/senior living REITs, one trailer park operator (my term, not theirs), one student housing REIT, a couple multifamily REITs, and two diversified REITs (including EPR, a/k/a Entertainment Properties Trust, whose holdings include everything from movie theaters to water parks to charter schools). Read the rest of this entry »