While not quite as profound as the Shakespearean original, it is still quite a tricky one for real estate investors to grapple with. Until fairly recently, it is one that has been avoided by the majority of real estate investors due to their heavy home bias. But the increasing global nature of the asset class, combined with rising currency volatility, means the question is becoming increasingly difficult to avoid. Click here to download full article (Source: MSCI.com)
For many people, an early window into the world of real estate investing comes through the board game Monopoly, played somewhat reluctantly at family gatherings. Amid the inevitable tears, tantrums, and arguments about rules, kids and adults learn the value of real estate as an income-generating investment and the imporatnce of properly managing cashflow.
Summary - Assessing REIT management is crucial in determining which stocks are opportunistic. - We go over some red and green flags that can hint at management's trustworthiness. - Misconceptions about certain management teams can create sizable mispricing and we think there is presently a clear dislocation. REITs are often looked at as asset or yield plays, but they are operating businesses. Management and the business strategy can matter as much as the NAV and bad management can cause tremendous amounts of damage. Click here to download full article (Source: Seeking Alpha)
The commonly held beliefs of which factors contribute to generating returns from REITs have typically been attributed to High Yields, Medium levels of Leverage, and Mid – to High Cap Rates. In our current environment, the changing demographics brought on by an aging population has heightened the focus on post retirement income generation. However, a decline in capital generation is a by-product of a fixation on yield and ultimately a deterioration in the ability to generate income of any consequence.