The Upside-Down Value of REITs

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.