Understood. When they had the conference call last fall and annouced the dramatic cut in distributions, they made it clear that they had anticipated "the worst" and would not expect to have to adjust the distributions downward again. HOWEVER no one could have intelligently forecast what transpired ... so reason would suggest they are having to revisit the amount. I spoke to the company maybe 6 weeks ago and came away comfortable that there was coverage. AGAIN that could change. IGR/IIA are meant to be income vehicles so if they do have to cut, they will reinstate as quickly. FWIW ..
REITs have almost always classified a portion of their distributions as ROC in good and bad times. Because of the significant depreciation they take .. and some of the things they can write off and not capitalize ... GATT accounting and their FAD are quite different.
In that IGR holds REITs and has little leverage, they depend upon those distributions from the REITs - which again they can not change the character of - and the income from (mostly) collars to pay their shareholders. So, again, when they say ROC to their shareholders, it is the pass thru not IGR's ROC.
The merger makes sense for both IGR and IIA although IIA shareholders will initially take a bit of a hit with lowered percentage on market price, the joining will save about .5% overall and make them stronger.
When mergered, they will constitute the largest single stock investment for me. So I am very content with their safety, conservative management and have every reason to believe we will see very solid and acceptable share price appreciation accompanied by increases in distributions.
I suspect there will be a lot more turnover in the next 18 months as they reposition themselves. It would be very difficult for an individual investor to duplicate their game plan.
If you own it ... hold it and take a look at adding more units in the future. I will.
BTW ... and I am retired and never was connected with ING ... but they have closed end funds beyond ING Clarion (the real estate focus) that are wonderful investments. I really like IRR.
This is an offshoot of the same presentation they have used for several years. But this is what I find interesting: 1) They own shares of real estate concerns selling below intrinsic value; 2) IGR is selling below NAV; and 3) IGR is owned by other REITs selling below NAV. Therefore, it is possible to get a triple discount on real estate! I'm not certain of the best vehicle to do this in, and if you have done your research before me please give me a few names.