Displaying items by tag: reits

Financial markets are extremely volatile as of late and that's putting it lightly, but REITs might be perfectly insulated at this moment and a great option. One of the largest sources of volatility is Russia and Ukraine but real estate is a local business and a solid option for those looking to alternatives. Another source of market risk is inflation however, real estate generally benefits from inflation. House prices outpace it and fixed-rate financing means debtors pay back less over time. Real estate also has leased on a long-term basis and insulted to most short-term shocks, and is a safe haven from typical equity volatility. Finally, if more turmoil suppresses interest rates then this will increase demand for real estate moving forward.

Finsum: We see the huge outperformance potential for real estate because of how uncorrelated the rate of return is with the rest of the markets right now.

The pandemic affected the economy in a variety of different ways, but combinations of unemployment and work from strategies caused a mass exodus from major American cities and New York has been no exception. However, UBS Group AG says that is about to change. They are recommending investments into REITs, e-commerce ETFs, and fintech/smart mobility in order to be a part of the comeback. A combination of higher vaccination rates and more tolerance for state and local governments to avoid shutdowns will help spur New York's comeback. They particularly cite Manhattan’s REITs for having a fruitful future.

FINSUM: More jobs than ever have moved fully remote and it's questionable whether the city lifestyle will be as appealing if it's not necessarily a requirement.

Everyone and their dog is searching for viable alternatives because omicron has the stock market skittish and there’s absolutely no yield in bond markets. This has many investors turning to REITs, but how do you find the outperformers. There are six key metrics to look out for: a high fund from operations, total cash from operations growth, high liquidity ratios, accelerated dividend growth rates, a good-sized market cap, and finally price gain. These are the most important factors when evaluating REITs. Some of the best examples in these leading categories are Prologis, Essential Properties, Innovative Industrial Properties, and Life Storage Inc.

FINSUM: Alternatives could have their most promising year yet with all the outflows from the bond market coming in.

(New York)

Income investors and many wealthy clients have struggled to find the outlet post-pandemic for relatively safe capital accumulation, but real estate investment trusts are that release valve. Reflation trade, stimulus-driven output in the economy, is driving a boom in commercial and residential properties. Reopening of the parts of the economy is driving REITs like EPR Properties, which hold movie theaters, ski resorts, water parks, indoor skydiving. It’s not limited to just adventure opportunities, data centers, cannabis cultivation, and crypto mining facilities are all burgeoning opportunities in REITs. David Auerbach of World Equity Group says that capital raising is ‘in vogue in the REIT sector because they proxy traditional capital appreciation vehicles. Ground leases in particular are one of the best investments in this sector. Along with additional measures that can be taken for a tax advantage, ground leases offer the upside of equity with maturity risks and capital structure to bonds.

FINSUM: The flight to safe assets is driving a groundswell of opportunities in REITs. With the economy reopening, and stimulus pumping through it, REITs are an opportunity to hit the safe return of bonds with the equity upside. 

(New York)

Two of the biggest problems facing many investors are how to handle potential inflation and taxes but…see the full story on Magnifi’s site