This article should be read in conjunction with other articles Part 1 to 6 on evaluation of REITs.For those unfamiliar, append below are some key drivers which can impact the capital appreciation of a REIT :- Interest rates regime Acquisition trails of a Reit to generates profit growth Professionalism of the REITs Managers Changes in [...]

Recently, NAREIT asked Ibbotson Associates – a leading authority on asset allocation – to examine the historical investment performance of REITs. Ibbotson found that: REITs offer an attractive risk/reward tradeoff The correlation of REIT returns with other asset classes has declined over the past 30 years REITs may boost return or reduce risk when added [...]

We have mentioned many factors in the earlier parts when evaluating a REIT. Another critical facor is to review its track record namely its proven acquisition track record, and whats are in the acquisition pipeline

Refer earlier to article on Net Asset Value (NAV) of a REIT. This valuation metric attempts to capture the income-generating power of a REIT after deducting all its expected expenses and liabilities. Usually, the REIT’s stock price should trade not more than 15% to 20% above or below the market’s estimate of its net asset [...]

As investors, we need to ensure that REIT’s growth and sustainability of dividend payouts is of key concern. One way is to look at its AFFO payout ratio which measures the percentages of its free cash flow a REIT needs to use to pay its common stock dividend. Normally th AFFO payout ratio is around [...]

This is a series of articles on the evaluation of  Real Estate Investment Trust (REIT). No matter of what type of REITS, one of the key criteria of a successful management is to evaluate the quality of management. Understandly, the founders of many REITS are still in management positions and still own large stakes in [...]

Besides the points I advised you to look at earlier when reviewing REITS, you should also watch out for the NET ASSET VALUE of the REIT. Firstly, what really is Net Asset Value (NAV)? Net asset value of a REIT is determined by deducting the value of all the fund’s liabilities from the value of [...]