I'm sitting on several thousand shares @ $12 and change. Never thought share value would go this low. That said, I'm thinking that once the market digests all the bad news, well run REITS will quickly come back in favor. I'm going to stick it out for the next 6 months, unless IGR reveals more failing investments. I may even buy more share if market sentiment for REITS switches to positive.
It will take more than 6 months for anything to come back. The deleveraging is maybe 60% over. Since so much funny money was propping up equities the forward P/E rations have to drop for a long time, perhaps to single digits. Real estate is not doing well, and may not for some time. Surely at some point everything will bottom, but it doesn't mean it is going higher anytime soon.
I just finished listening to the end of the conference call following the divvy cut to .045/month = to 0.54/annual if it lasts. We are paying the price of leverage risk that boosts earnings a bit when times are good but kills you when times are bad, and that is the long and the short end of the stick for it ... or just say : polish it behind the door 3x fast. Seriously, the company moguls claim they have the leverage under reasonable control and those who want to buy more at these prices and can afford the risk of losing all may come out ahead over time. I'm leery for now and will hold my hand until I feel better about the economy.
I'd sit on it longer than that. As rental lease agreements get renegotiated, generally at no less than one year in length, the underlying assets are going to suffer this hit for some time. I do feel very comfortable long-term, as anyone with the luxury of not needing the money should. Don't make the mistake of bailing out now. It's a recipe for failure.
For those with only a small position, I would add to your position here. For the rest of us, patience will reward us. I actually added a small amount today.
You make a good point. I will say that my past business experience has show me that most commercial leases have a duration of 2 or more years. Equally important is these same leases typically have a renewal clause at the same rate or 3 - 5 percent higher. What I don't know is when the bulk of the leases where initiated or what the vacancy rates are for the properties involved. Keep in mind that for a business to move to a facility with a lower lease rate is, at best, an expensive and disruptive proposition.
I'm thinking we'll know how this plays out in the next 6 months to a year.
I also am down much on a couple thousand shares and must HOLD and hope we can get some back in the future. The dividend cut really made it painful though. I thought as long as the dividend remained untouched it would eventually come back. Now I don't know.
I too find the dividen cut hard to take. However, if they are doing it for positive reasons and future planning for a more normal commercial realestate market... okay then.
FYI - the parent company reported its first quarterly loss EVER. Goes to show how chaotic the market has become. I hope their historical record, being smart managers/investors, plays to our favor.
The amount I'm down on IGR is staggering. The dividend cut just puts the knife in deeper. With the world in a recession, real estate may be a questionable investment for some time. But, who knows?
IGR becomes even more risky as it has about 35% leverage--just increases the down side. Of course, if there is ever an upside it would increase that too, I guess.
I'm a retiree and had planned on IGR being one of the steady monthly income vehicles for me. Now, I just don't know.