Details

The Intelligent REIT Investor


The Intelligent REIT Investor

How to Build Wealth with Real Estate Investment Trusts
1. Aufl.

von: Stephanie Krewson-Kelly, R. Brad Thomas

19,99 €

Verlag: Wiley
Format: PDF
Veröffentl.: 10.08.2016
ISBN/EAN: 9781119252740
Sprache: englisch
Anzahl Seiten: 240

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Beschreibungen

The go-to guide for smart REIT investing The Intelligent REIT Investor is the definitive guide to real estate investment trusts, providing a clear, concise resource for individual investors, financial planners, and analysts—anyone who prioritizes dividend income and risk management as major components to wealth-building. The REIT industry experienced a watershed event when Standard & Poors created a new Global Industry Classification Standard (GICS) sector called Real Estate. Publicly traded equity REITs have been removed from Financials, where they have been classified since their creation in 1960, and have begun trading as their own S&P Sector. This separation from banks and financial institutions has attracted new investors, but REITs require an industry-specific knowledge that is neither intuitive nor readily accessible to newcomers—until now. Using straightforward language and simple example to illustrate important concepts, this book will enable any reader to quickly learn and understand the lexicon and valuation techniques used in REIT investing, providing a wealth of practical resources that streamline the learning process. The discussion explains terminology, metrics, and other key points, while examples illustrate the calculations used to evaluate opportunities. A comprehensive list of publicly-traded REITs provides key reference, giving you access to an important resource most investors and stockbrokers lack. REITs are companies that own or finance commercial rental properties, such as malls and apartment buildings. Despite historically high total returns relative to other investments, such as the Nasdaq or S&P 500 index, most investors are unfamiliar with the REIT industry, and wary of investing without adequate background. This book gets you up to speed on the essentials of REIT investing so you can make more informed—and profitable—decisions. Understand REITs processes, mechanisms, and industry Calculate key metrics to identify suitable companies Access historical performance tables and industry-specific terminology Identify publicly-traded REITs quickly and easily REITs have consistently outperformed many more widely known investments. Over the past 15-year period, for example, REITs returned an average of 11% per year, better than all other asset classes. Since 2009, REITs have enjoyed positive returns; large cap stocks and cash are the only other classes that paralleled that record. Even in 2015, a 'year of fear' related to rising rates, REITs returned 2.4%, beating most all other asset classes. REITs have a long history (over fifty years) of performance, and have entered the big leagues. If you feel like you've been missing out, don't keep missing out. Prepare yourself, and your portfolio, to benefit from the demand for REITs that have followed the creation of a Real Estate GICS sector. The Intelligent REIT Investor gives you the information you need to invest wisely and manage your real estate risk effectively. By maintaining a tactical exposure in the brick and mortar asset class, investors should benefit from the information contained in The Intelligent REIT Investor. Join the REIT world and look forward to owning stocks that will help you to sleep well at night.
Foreword xi Preface xv Acknowledgments xix About the Author xxi Part I An Introduction to REITs 1 Chapter 1 What Is a REIT? 3 Size of the REIT Industry 4 Categories of REITs 4 Equity REITs 4 Mortgage REITs 6 Classification by Property Type 7 Size and Index Inclusion 7 Geographic Focus 9 Growth Strategy 12 Where to Find Information on REITs 15 FTSE NAREIT All REITs Index 15 Company-Specific Websites 15 Indexes for Tracking REIT Performance 15 Exchange-Traded Funds for Investing in REITs 17 Chapter 2 Why Invest in REITs? 19 Double-Digit Total Returns 19 Dividends 20 Liquidity 20 Portfolio Diversification 21 Hedge Against Inflation 23 Transparent Corporate Structures 25 Chapter 3 REIT Dividends 27 Rockland REIT 27 REIT Yields 27 Are REIT Yields Safe? 30 Quantifying Dividend Safety 31 Dividend/FFO Payout Ratio 31 Debt Ultimately Determines Dividend Safety 32 Debt-to–Total Market Capitalization Ratio 32 Debt-to–Gross Book Value Ratio 32 Legal Standing of Leases Supports Dividend Safety 33 REIT Dividends and Taxation 34 REITs Do Not Pay Out All of Their Cash in Dividends 35 The Components of a REIT’s Common Dividend 36 REIT Dividends and the Bush Tax Cuts 39 Preferred Stock Dividends 40 Preferred Stock Basics 40 Risks to Owning Preferred Shares 40 Conclusion 42 Chapter 4 Leases 43 Lease Terminology 44 The Four Major Types of Leases 48 Leases and Tenant Bankruptcy 51 FASB and the New Standard for Accounting for Leases 52 Lease Duration and REIT Stock Price Performance 52 Chapter 5 REITs by Property Type 55 Diversified and Specialized REITs 55 REITs that use Triple-Net-Leases 56 Risks and Rewards of REITs That Use Triple-Net Leases 59 Health-Care REITs 59 Risks and Rewards of Health-care REITs 61 Industrial REITs 62 Risks and Rewards of Industrial REITs 63 Lease Terms 63 Lodging/Resort REITs 63 Hotel Revenue 64 Hotel Expenses 64 Technical Aspects Specific to Hotel REITs 64 Risks and Rewards of Hotel REITs 66 Mortgage REITs 66 Risks and Rewards of Mortgage REITs 69 Office REITs 70 Lease Terms 72 Risks and Rewards of Office REITs 72 Residential REITs 73 Apartment REITs 73 Manufactured Housing REITs 75 Single-Family-Home REITs 76 Retail REITs 77 Shopping Center REITs 77 Mall REITs 79 Freestanding Retail REITs 80 Risks and Rewards of Retail REITs 81 Self-Storage REITs 82 Risks and Rewards of Self-Storage REITs 82 Conclusion 83 Part II Investing in REITs 85 Chapter 6 Getting Technical 87 REIT Structures 87 UPREITs 88 OP Units 89 OP Units and Estate Planning 90 DownREITs 91 Publicly Traded, Public Nonlisted, and Private REITs 92 Volatility versus Liquidity 92 Transparency and Corporate Governance 92 Costs and Fees 95 Externally Advised and Externally Managed REITs 95 Qualifying as a REIT 96 REITs Are Not Limited Partnerships 98 Chapter 7 REIT Performance 99 Historical Total Returns 99 Factors Influencing Demand for REIT Shares 101 Events That Increased Demand for REIT Shares 102 REITs versus the Attractiveness of Other Investments (Lessons from History) 108 Growth Stocks versus REITs, 1998–1999 108 Treasury Yield versus REITs, 2004–2006 109 Safety and Yield, and the Big League of Benchmarks, 2000–2006 110 REITs During the Financial Crisis of 2007–2008 111 Company Attributes That Affect Performance 113 Real Estate Fundamentals and REIT Performance 113 Performance by Property Type 116 How Lease Length and Structure Affect REIT Returns 122 Weighted Average Cost of Capital and REIT Performance 127 Debt as a Four-Letter Word 127 Competitive Advantage or Disadvantage—Why Cost of Capital Matters 127 REIT Performance in a Rising Interest Rate Environment 129 Conclusion 131 Chapter 8 Analyzing REITs 133 Operating Metrics 134 Net Operating Income (NOI) 134 Same-Store (Organic) Earnings 134 ‘Earnings Growth‘ for REITs Is ‘FFO Growth‘ 135 Management’s Track Record as a Screening Tool 136 Profitability Metrics 137 Funds from Operation 137 Adjusted Funds from Operations (AFFO) 139 Cash Available for Distribution (CAD) 140 Balance Sheet Metrics and Analysis 140 Leverage 140 Debt-to–Total Market Capitalization Ratio 141 Debt-to–Gross Book Value Ratio 142 Debt-to-EBITDA Ratio 142 Weighted Average Cost of Capital (WACC) 143 Valuation Metrics 145 Price/Earnings Multiple 145 PEG Ratios 145 Dividend Yield 146 Dividend Safety 147 Dividend Coverage, or Payout Ratios 147 Dividend Discount Model 148 Net Asset Valuation (NAV) 149 Implied Capitalization Rate 158 Conclusion 161 Appendix A REITs Listed Alphabetically by Company Name 167 Appendix B REITs Listed Alphabetically by Ticker Symbol 175 Appendix C REITs by Sector 182 Appendix D REITs with Credit Ratings 193 Glossary 199 Index 209
Stephanie Krewson-Kelly analyzed REITs for top Wall Street firms from 1994 through 2009 and, today, heads the Investor Relations department for a publicly traded REIT. Her prior publications include REIT Roadmap: An Insider's Guide to Successful Investing in Real Estate Investment Trusts (2nd edition, 2012). R. Brad Thomas is an acknowledged expert in commercial real estate investing and REITs. He is editor of the Forbes Real Estate Investor newsletter and writes for Forbes and Seeking Alpha.
Between 2001 and 2015, real estate investment trusts (REITs) delivered average annual total returns of 11 percent—significantly outperforming the five percent average annual total returns achieved by the S&P 500 and NASDAQ indexes. In September 2016, 'Real Estate' will become the eleventh investment sector tracked by Standard & Poor's—a watershed event that is already attracting new investors and greater fund flows into REITs. Investors need to learn how to invest wisely in this unique, new investment class. The Intelligent REIT Investor is the ultimate, clear, and concise guide for achieving investment success. Using easy-to-understand language and simple examples to illustrate industry-specific concepts, The Intelligent REIT Investor enables even novice investors to quickly gain fluency in REIT industry terminology and valuation techniques. Moreover, because it focuses on the most pertinent risks and rewards of REIT investing, The Intelligent REIT Investor can be read cover-to-cover in a few hours. Whether a reader's goal is to intelligently discuss adding REITs to a well-diversified portfolio or to offer expertise in REIT strategies to clients, this brilliantly constructed resource contains all the information and tools required. The Intelligent REIT Investor is the go-to primer and practical road map to understanding essential aspects of REIT investing, including how to: Apply easy-to-use equations to assess the strength of a REIT's balance sheet and dividend safety Understand research reports and public information on REITs across the spectrum of different commercial property types Weigh the risks and benefits of each property type to optimally balance investment portfolios with specific goals Filled with illustrative charts, useful summary tables, and historical anecdotes that explain how different property types have performed in various market conditions, no other resource on the market more fully prepares readers for making informed, successful REIT investments than The Intelligent REIT Investor.
Praise for The Intelligent REIT Investor "Together, Brad Thomas and Stephanie Krewson-Kelly form the perfect 'Dynamic Duo' to write the 'Bible' for investing in REITs. Brad's years of writing on REITs in numerous publications, along with Stephanie's background as both a current REIT executive and former sell-side REIT analyst, provide a wonderful background to lead readers through the basics and intricacies of public real estate securities. Well done!"—Tom A. Lewis, retired Chief Executive Officer, Realty Income (NYSE: O) "Whether you are new to the world of REITs or a more sophisticated investor looking to gain a greater understanding of REIT investment strategy, The Intelligent REIT Investor is an indispensable resource. Brad and Stephanie's combined experience spans all aspects of the REIT sector, commercial real estate, and securities investing, and that valuable knowledge is imparted to the reader thoroughly, yet in an easily digestible manner."—Dave Henry, former Vice Chairman and Chief Executive Officer, Kimco Realty Corporation; Board Member of four public REITs: Columbia Property Trust; HCP, Inc.; Tanger Factory Outlet Centers, Inc.; and VEREIT, Inc. "The Intelligent REIT Investor not only helps investors understand the top- level benefits of REIT investing—strong long-term wealth creation, portfolio diversification, steady current dividend income, liquidity, and the like—but also gives them a carefully structured approach for identifying which property segments, and even which individual REITs, would make the best additions to their own investment portfolios."—Brad Case, PhD, CFA, CAIA, Senior Vice President, Research & Industry Information, National Association of Real Estate Investment Trusts "The Intelligent REIT Investor is a comprehensive go-to resource for Real Estate Investment Trusts. The authors share their tremendous knowledge of the REIT industry and provide an in-depth guide to investing in REITs during all economic times."—Drew Alexander, CEO, Weingarten Realty

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