the mix of reits that I have are interesting to say the least:
acas- leveraged buyouts
hpt & wxh- hotels
If you noticed, no real industrial property. I did that on purpose as I don't view the long term as very good for industrial or office due to shifts offshore and home offices.
There is a real trend towards companies wishing to lease rather than own. banks are unwilling in most cases to loan money, so the equity market and commercial credit becomes the source. this is also limited to a certain extent.
their is no huge glut, in any of the markets that I own reits in. Hotels are soft right now, but the revenue gets impacted only when their is a default or a bankruptcy. virtually all are triple net leases.
acas is a unique reit lending money and taking equity positions in leveraged buyouts of small companies, or divisions of companies. they are very, very good at this averaging 15% returns over the longer haul. the list of companies include very few tech companies as they are interested in getting paid back, e.g. company must have great cash flow. I have had a 35% annual return over the last 3 years.
I see reit price appreciation slowing, as interest rates level off and the yields stabilize in the 8-10% range. some of the reits have higher yields due to low growth such as wxh. but sss just reported funds from operations up 7% as an example of one growing.
I would only buy reits for the long haul as a source of living income, or if you are conservative in your 401k investments.
That is quite a selection Zorb. Some of the dividend rates on those are impressive. Toss in a touch of capital appreciation and you have a huge winner in this market. However, even at a discount broker the in/out commission can be sortof pricey when in and out of 10 at a time ;-)
Have you thought of Ginne Mae's? You won't see much capital flucuation and the return is a touch less but our tax dollars and Uncle Sam guarantee them. I'm thinking that real estate in the U.S may not hold up in the medium term as well as it has over the last couple of years.
Even Alan G. commented on the surprising constitution of the real estate marked despite the stock market drop, layoffs and economic weakness. Real Estate may be on its last legs (a significant fall would hurt reits).
suggest you put about equal amount in each which gets you a dividend yield a little over 9%.
I expect a long term return of about 12-13% with about 4% from actual growth in funds from operations. however I only plan to 9%, so I am happy with an upside.
Re: debating whether to dump fibercore when they
announce. stock only appears to move at earnings
This stock has held its own through the NDX crash, the fiber crash, the telecom crash and the tech wreck; all on pretty healthy volume. Since you are a long term investor I would seriously think about waiting around until April 2002. Most stocks that are being held down seem to go up before & after earnings. Even DIOD went up after what I consider to be a dismal Q. I don't see anything unique about FBCE, except that they seemed damn confident during their last two CCs and (gasp!) they delivered even better than they forecasted in both cases without balance sheet magic.
I am staying with my reits for my living money for the next 8 to 10 years. I may adjust the list for new ones but fundamentally I have some real problems with the economic outlook, especially for tech.
The average of my reits is a 9.5% dividend. the average growth in funds from operations is about 4% giving an expected yield of 13.5%. what affects reits is overbuilding of commercial space, which is not happening due to tight money.
Reits benefit from declining interest rates and in some cases, from a declining economy. if they have a strong balance sheet, they can get loans, or do a secondary to buy up property at discounted rates. I have about 2 or 3 doing this.
In addition, reits don't require help from international business, which appears to be a major problem again. Japan is a disaster. Europe hasn't figured it out. latin america is having debt problems.
So much rides on china growth now, that a major blip will kill the likes of nokia, ibm, motorola, philips.
The problem with tech is as you say, figuring out who has the technological edge. ditto for drugs and genetic based companies. need an expert. most of my friends are experts on bars, golf and fishing.
another problem is the growth outlook. if you see a fairly safe 13%, does it make sense to chase 20%? I don't think so.
so I have limited my 401k to about half tech, with the emphasis on small caps. nokia and emc are my only large cap holdings right now.
p/e's on most large caps are way out of line with reality. amat is the perfect example.
debating whether to dump fibercore when they announce. stock only appears to move at earnings time. cats is the same way.