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REITs
Old 08-08-2007, 09:04 AM   #1
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REITs

I am not saying now is the time to buy but I have seen several REITs, some well over a billion in market cap, sell off substantially. Some of the yields on these have been pushed up to 5.5-7%. Sustainability of dividends is always the issue but with the bigger ones I tend to think the odds are better.
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Old 08-08-2007, 09:30 AM   #2
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So what you buying?
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Old 08-08-2007, 09:41 AM   #3
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Nothing yet. I would liken my approach with REITs to watching a car crash while sitting in a lawn chair sipping a cold one. LRY was the latest one to plunge towards the 52 week low mark. I have not researched it one bit, but it falls into the category of sell offs -- 7% yield, market cap around 3 bils & at a 52 week low. It just acquired another REIT so that has probably compounded the negative view of it.
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Old 08-08-2007, 10:15 AM   #4
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I own FR, O, NNN, and SNH.

I bought more FR on 6/27.

They did wonders for my portfolio last year, but they're killing me this year

I think REITs are a good place to put some money right now. Avoid anything that owns mortgages, and stick to ones with strong balance sheets, since it may be hard for them to get more capital for awhile. Just collect that 6-7% dividend and ride out the storm.
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Old 08-08-2007, 12:30 PM   #5
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I own KIM, GGP, PLD, VNO, WRE, and have substantially increased my stake in
them over the last month as they became better values (IMO) than my other stocks.
I have been investing in them since 1997, sometimes very heavily.

I cannot say I am a big fan of FR. I have never liked their accounting practices -
specifically how they treat capital gains on their building sales as part of their FFO.
While they are quite upfront about doing this, they are unique among larger REITs
(to my knowledge) for doing this, and you really have to back these gains out to
make their results comparable to other REITs (or correspondingly add them in for
all the other ones).
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Old 08-08-2007, 07:47 PM   #6
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I'm a newbie investor and only has the Vanguard REIT Index. It's dropped quite a bit since I bought it earlier this year. I plan to hold on to it for a few decades. I don't think it has any mortgage companies' stocks. Is it a good fund, in your opinion?
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the way 2 play real estate...imho
Old 08-09-2007, 01:26 AM   #7
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the way 2 play real estate...imho

SRS

BigCharts - Interactive Charting

short it if u wanna play this so-called "we have the sub prime and real estate fiasco behind us" bull.

better be quick to cover & go long tho

trend is up for srs...entry in mid to low 90's would be very nice. $130-170 / share before we see any meaningful turn around in late 2009-2010.

again jmho

good luck tekno
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Old 08-09-2007, 09:49 AM   #8
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I have to admit I bought FR mainly for the yield. I think it was 9% when I first bought it ( 4-5 years ago? My account got sold so I'd have to dig through my paperwork to determine exactly when).

When the yield got down to 5.5% or so, I sold a little, and when it got back above 7% I bought it and a little more back. From what I can tell, the dividend is pretty secure. They have mostly fixed rated debt.

My REITs are pretty much replacements for bonds in my portfolio, so if the dividend never gets cut, I will consider my investment in FR a success.

I love getting that giant dividend tax-free in my Roth IRA

Quote:
Originally Posted by CyclingInvestor View Post
I own KIM, GGP, PLD, VNO, WRE, and have substantially increased my stake in
them over the last month as they became better values (IMO) than my other stocks.
I have been investing in them since 1997, sometimes very heavily.

I cannot say I am a big fan of FR. I have never liked their accounting practices -
specifically how they treat capital gains on their building sales as part of their FFO.
While they are quite upfront about doing this, they are unique among larger REITs
(to my knowledge) for doing this, and you really have to back these gains out to
make their results comparable to other REITs (or correspondingly add them in for
all the other ones).
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Old 08-09-2007, 02:01 PM   #9
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Quote:
Originally Posted by Hamlet View Post
I love getting that giant dividend tax-free in my Roth IRA
Please clarify for me--would a ROTH IRA be the best place to hold individual REIT companies? Aren't their dividends subject to the 15% tax rate (instead of ordinary income tax rate) in a taxable account?

I have a smidge of Vanguard's REIT fund in my ROTH IRA, having sold most earlier this year.

Thanks.
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Old 08-09-2007, 02:57 PM   #10
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Any IRA is a good place for REITs.

My understanding of REITs is that their dividends are taxed at ordinary income rates instead of the 15% tax rate, since the REIT itself is exempt from corporate income tax.

So REITs are kinda like bonds for tax purposes. They should almost always be owned in a retirement account rather than in a taxable account, since there are much more tax efficient vehicles for the taxable account.



Quote:
Originally Posted by flipstress View Post
Please clarify for me--would a ROTH IRA be the best place to hold individual REIT companies? Aren't their dividends subject to the 15% tax rate (instead of ordinary income tax rate) in a taxable account?

I have a smidge of Vanguard's REIT fund in my ROTH IRA, having sold most earlier this year.

Thanks.
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Old 09-20-2007, 03:06 PM   #11
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Quote:
Originally Posted by Hamlet View Post
Any IRA is a good place for REITs.

My understanding of REITs is that their dividends are taxed at ordinary income rates instead of the 15% tax rate, since the REIT itself is exempt from corporate income tax.
It's true that REITs are not taxed at the corporate level; rather, they are taxed at the shareholder level. Some of the REIT dividend is ordinary income, some is capital gain, and some is return of capital. Each REIT must tell its shareholders what the breakdown of its dividend income is each year so that its shareholders can prepare their tax returns (a historical breakdown of REIT dividends in general is available at http://www.investinreits.com/reasons...ionSummary.xls).

I own REITs in my taxable account. I also own the O REIT (Realty Income Company) as a DRIP (dividend reinvestment program) in my Roth IRA. A DRIP significantly compounds a stock's return over a long period of time (multiple decades) and by having the DRIP in an IRA, you don't have to keep track of the basis of each dividend payment. When you are ready to retire, just stop reinvesting the dividends and use them to pay living expenses instead.
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