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re: REIT's
Posted on 2/1/11 at 9:02 pm to Chad504boy
Posted on 2/1/11 at 9:02 pm to Chad504boy
quote:Nice way to proportionately size real estate holdings in your portfolio. Liquidity allows flexibility vs property holdings. Heebner does a good job with CGM Reality. Decent fund, the only REIT we've used.
Anyone have any investment in any REIT's? (Real Estate Investment Trust) Opinions? Pro's Cons? Thoughts?
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Posted on 2/1/11 at 9:57 pm to Chad504boy
yep. absolutely love them. great diversification.
Posted on 2/2/11 at 9:52 am to Chad504boy
I own some HPT. It's been a decent REIT to own.
Posted on 2/2/11 at 12:33 pm to Cdawg
CCPT III and HTA are the only 2 I have used.
Posted on 2/2/11 at 5:43 pm to saint308
Any thoughts on Cole Reits?
Posted on 2/3/11 at 9:31 am to Pierre
quote:
Any thoughts on Cole Reits?
thats the one my money guy is advising.
Posted on 2/3/11 at 11:13 am to Chad504boy
quote:
Any thoughts on Cole Reits?
CCPT III= Cole Credit Property Trust III.
That is the one I use almost exclusively.
Posted on 2/3/11 at 12:37 pm to saint308
Is it a problem if everyone is selling Cole? I know of different advisers and brokers and this is their go to REIT. Makes me wonder and worry
This post was edited on 2/3/11 at 12:37 pm
Posted on 2/3/11 at 12:42 pm to Pierre
quote:
Is it a problem if everyone is selling Cole? I know of different advisers and brokers and this is their go to REIT. Makes me wonder and worry
my adviser gets paid some sort of back door commission in selling cole. Doesn't bother me too much cause it alleviates me paying any direct advisory fees to him if he had that money invested in mutual funds or whatever.
Posted on 2/3/11 at 12:49 pm to Chad504boy
Your advisor likely makes a 7% pop off of that money. It comes from you but you don't see it.
I had Inland blow up on me in 08. I think it went to 6.75 on the dollar and decreased their dividend to next to nothing. Around 1% maybe. Some bullshite excuse about paying down mortgages which I didn't buy. I avoid them at all costs now. Haven't touched a REIT since.
I had Inland blow up on me in 08. I think it went to 6.75 on the dollar and decreased their dividend to next to nothing. Around 1% maybe. Some bullshite excuse about paying down mortgages which I didn't buy. I avoid them at all costs now. Haven't touched a REIT since.
Posted on 2/3/11 at 12:59 pm to Broke
quote:
It comes from you but you don't see it.
I just don't see how it can " come from me" though.
I have x dollars, buy x/10 amount of shares (10per share). Get the dividends off of those monies projected at 6.5%. Eventually it'll sell off hopefully at a gain at y per share. Don't see much of a downside here.
Posted on 2/3/11 at 1:09 pm to Broke
quote:
Your advisor likely makes a 7% pop off of that money. It comes from you but you don't see it.
I had Inland blow up on me in 08. I think it went to 6.75 on the dollar and decreased their dividend to next to nothing. Around 1% maybe. Some bullshite excuse about paying down mortgages which I didn't buy. I avoid them at all costs now. Haven't touched a REIT since.
Alot of the older ones are under water now. Most of the ones that were buying property in 2009 should work out ok. At least I hope so.
Posted on 2/3/11 at 2:42 pm to saint308
quote:
CCPT III and HTA are the only 2 I have used.
What precisely is your experience and knowledge level of private and public REITs? Why should someone sell this shite to any of their clients, I mean sheeple???
LINK
quote:
Unfortunately, even with this recent cut, Cole still has a long way to go before it can to cover its dividend. In its third quarter 2010 10Q, Cole Credit Property Trust III reported paying dividends of $74 million, against Funds From Operation of only $12 million. This is deeply negative dividend coverage, and from a GAAP cash flow perspective, coverage wasn't much better. In Q3, Cole reported cash flow from operations of only $22 million, which is obviously double its reported FFO, but still results in negative coverage of 183 percent. Shamefully, Cole also reports something called "Adjusted Cash Flows From Operations," which is a non-GAAP fiscal frankenstein, and nothing more than a lame attempt to whitewash its egregious 2% levered acquisition fee from the cash flow statements. (This a particularly troubling example of the "misleading accounting" that P-Solve identified in its due diligence on Cole Credit Property Trust III). These policies do nothing but dilute shareholders, and they are a large part of the reason that is Cole reporting a book value of only $7.70 per share in its Q3 2010 SEC filings, vs. the fictional stated value of $10.00 per share shown on client statements (upfront commissions and fees are the other reasons).
If it weren't for Cole's 7% broker commissions and 3% dealer manager fee, they couldn't sell this putrid piece of turd to an entire galaxy of starving fly larvae. Why anybody would continue buying this thing at all is beyond me, but apparently some people who make their living by selling it have started to complain. In Chris Cole's letter to Cole's "broker-dealer partners" (attached below), he says...
Instead of people blindly buying REITs that may be very illiquid and not supportive of its purported dividends I would suggest thorough due diligence. REITs can be very dangerous to retail investor's wealth.
Look at VNQ as a proxy for public equity REITs and evaluate its volatility. Look at its current valuation post regulator complacency by allowing banks to rollover loans to many impaired RE companies compared to late 2008, look like a great buy now? Didn't think so.
Posted on 2/3/11 at 2:49 pm to tirebiter
Hmmm... thats not a flattering article for cole's...
Posted on 2/3/11 at 2:52 pm to Chad504boy
It's not just Cole, many private illiquid REITs have the same issues, the disclosures to investors are terrible. Then a squeeze happens and the investors have no market in which to sell their securities. I would stay away from that segment at all costs.
They sell the shite on yield, but that can change dramatically and typically not in a good outcome for the unit/shareholders.
They sell the shite on yield, but that can change dramatically and typically not in a good outcome for the unit/shareholders.
Posted on 2/3/11 at 2:58 pm to tirebiter
Let me ask this, what has changed in the last 24-months that would make these private REITs attractive? I doubt they can borrow money, the rent rolls and tenant occupancy rates have likely declined, there is much excess sq footage of space available driving down rents in a given market, etc. What makes these deals attractive? Oh, oh, someone will end up with the best of breed developer, etc. Nah, I am extremely jaded about the shysters in this space. Fool....money....buh bye.
Posted on 2/3/11 at 2:58 pm to tirebiter
quote:
It's not just Cole, many private illiquid REITs have the same issues, the disclosures to investors are terrible. Then a squeeze happens and the investors have no market in which to sell their securities. I would stay away from that segment at all costs.
They sell the shite on yield, but that can change dramatically and typically not in a good outcome for the unit/shareholders.
The pitch to me was that usually large company pensions or whatever come in and buy cause they need to acquire revenue generating assets. I'm just not sure what type of bang per buck is realistic to get back per share when they do sell...
Posted on 2/3/11 at 3:04 pm to Chad504boy
The one thing you can be certain of is the developer/operator will make good money, the salespeople will make good money, but will you make good money or be left holding a bag of something you don't want with no way of monetizing your exit.
To me, people are better off with VNQ or similar if they really want exposure to REITs and recognize it for what it is, ie volatile and very dependent upon borrowed money and RE/economic cycles, and look for stable fixed income elsewhere. I am not touting VNQ b/c it is richly priced at this time, but something to consider down the road. At least it is well diversified across multiple RE segments.
To me, people are better off with VNQ or similar if they really want exposure to REITs and recognize it for what it is, ie volatile and very dependent upon borrowed money and RE/economic cycles, and look for stable fixed income elsewhere. I am not touting VNQ b/c it is richly priced at this time, but something to consider down the road. At least it is well diversified across multiple RE segments.
Posted on 2/3/11 at 3:08 pm to tirebiter
I might back off this investment strategy for now...
Posted on 2/3/11 at 3:13 pm to Chad504boy
Don't let me scare you, I just didn't want people obtaining "advice" that may be erroneous or ill informed. I take risks, but hopefully when the odds are on my side for gain.
RE can be very illiquid, especially when its disposition is not in your control.
RE can be very illiquid, especially when its disposition is not in your control.
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