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The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.
Time and time again, real estate continues to prove itself as a strong possible choice as an investment class. Real estate investing can yield high returns, cash flow generation, and portfolio diversification. It’s renowned as a hedge against volatility and doesn’t typically correlate with stocks or bonds.
Unfortunately, high barriers of entry often prevent everyday investors from accessing the full benefits of this asset class — especially when it comes to commercial real estate. Although commercial properties offer great potential for rewards, they can be out-of-reach for the average investor.
This is where real estate investment trusts (REITs) come in. They can help make real estate investing more accessible by offering investors shares of companies that own and operate a portfolio of investment properties. REITs collect revenue from tenants and distribute those funds to shareholders in the form of dividends.
REITs can be a great way to add commercial real estate investments to your portfolio with the ease and advantages of owning publicly traded stock. But not all commercial REITs are created equally.
When it comes to selecting the best commercial REIT for your portfolio, diversification and return potential are essential. But it’s also critical to look deeper and consider a REIT's competitive advantage.
The Commercial REIT Creating Local Connections
While other commercial REITs focus on retail or office property deals on a one-off basis, Whitestone REIT (NYSE: WSR) takes a community-focused approach. Whitestone specializes in open-air essential lifestyle centers that offer a wide range of goods and services catered to the surrounding communities’ consumer needs.
Whitestone gains a competitive advantage by leveraging local expertise to service local needs. The result is more than just income-generating retail properties — when you invest in Whitestone, you’re investing in lifestyle communities filled with entrepreneurial tenants.
Whitestone curates its tenants to provide a diverse mix of experience opportunities and convenience, resulting in 18-hour customer traffic.
This approach can create ongoing demand for Whitestone’s retail locations and consistent, attractive returns for investors. Even during a global pandemic, Whitestone was able to outperform its peers as a result of this unique strategy. It’s also been able to pay monthly dividends, whereas most REITs like W.P. Carey (NYSE: WPC) and Healthcare Trust Of America Inc (NYSE: HTA) pay only quarterly.
Whitestone uses a contrarian business model to structure resiliency and robustness during both economically stable and challenging times. The contrarian model has investors go against prevailing market trends — selling when most investors are buying and buying when investors are selling.
Whitestone acquires under-served properties with value-added opportunities and redevelops them to their full potential. These high-quality properties then attract entrepreneurial tenants and serve as a consumer center for local communities.
Whitestone’s Open-Air Essential Lifestyle Centers
Whitestone’s properties are strategically located within high-income neighborhoods of some of the fastest-growing and most desirable relocation markets in the U.S. --Texas and Arizona -- with potential future expansion in new markets such as Colorado, Florida, Tennessee, North Carolina, and Georgia.
The average retail space in its properties is approximately 3,000 square feet. Its lease terms are shorter than the industry average — approximately 3 to 5 years annually adjusted for the cost of inflation plus triple-net terms. Most of Whitestone’s properties are grocery- or pharmacy-anchored or located near a grocery or pharmacy, which helps to attract neighboring consumers and increase foot traffic to tenants’ businesses.
Most importantly, Whitestone is serious about creating local connections. Its properties serve as a community retail focal point. It also works closely with tenants, championing them with business tools and development opportunities to help them grow their business.
In the words of Whitestone Chairman and CEO Jim Mastandrea, “Community is everything to us. Our centers are where entrepreneurs can succeed in creating their own version of the American dream.”
This approach has helped Whitestone succeed in nurturing long-term relationships with tenants. Many operate numerous locations across multiple Whitestone properties, occasionally under different names. They also frequently renew their lease terms, encouraging stability and dependable cash flow for investors.
According to some, Whitestone REIT has been trading at a discount — and investors are taking notice. Learn more about Whitestone REIT here.
The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.
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