REIT's

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I like the idea of buying private REIT shares at big discounts to NAV from people who need the liquidity but can't get it.

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How do you buy it from them that way? Seems like a backdoor deal that feels sketchy.

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GBE but CBG

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GBE grubb & ellis?

CBG?

I know of Cole Credit Property Trust...?

if you dont need the liquidity the non-tradeds are a little safer although quite a few blew up in '08 they aren't as volatile as the public REITs which are currently pretty highly correlated to equity markets, another reason not like them as they aren't offering much diversificatoin. My favorite non-traded REIT is the Hines Global Reit.

The private one I am involved in just got started about 6 months ago. No real information yet.

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if you want to go the public route....ARR is a government agency mortgage REIT that is paying around 18% dividend annual dividend, that is paid monthly

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holy crap, what's the drawback on the public route?

these companies buy pools of mortgages and then lever them 8x over to buy more mortgages hence the jacked up dividend. They must pass through 90% of all income to their shareholders. ARR is a government agency only Mortgage REIT, so in theory there is no default risk on the mortgages. a couple of the drawbacks are 1) if the yield curve inverts it will cost more to borrow against their current mortgages than they can get for the new ones they are buying 2) if mortgage rates rise 3) it is not much of an NAV play as when they get too far off of book they do an equity offering to raise more capital to lend out. Since all profits go to shareholders, management gets paid off of AUM so they do offerings pretty frequently. They have been doing offerings every couple of months which dilutes the shares. right now it's a great company to own; however, as inflation comes and interest rates rise watch out

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actually it's closer to 8x levered but like i said it's fairly safe from default risk..

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Not worried about default risk. Worried about mark to market risk that would cause them to unwind the leverage overnight.

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I agree; however, management does uses hedges and swaps to guard against rising interest rates it's very important to look at the management team...for now they are a great deal but only while rates are stable the second rates start to rise they will get slaughtered and i'd run for the hils...until then they are an optoin if you are chasing yield

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Well, I guess I make it a goal to never chase yield.

I don't like any of these manufactured returns.

A few years ago, I invested in TRET to get a special dividend. It was freaking huge. Bought in, got the dividend, and sold 1 week later.

I ended up with a 280% gain in 3 weeks.

ETA: It was paying a dividend of $1.78/share and when I purchased it, it was $1.47. A bunch of others piled on and drove the stock to the $2.60 or so. It dropped after the dividend and bounced back to $2.12/share, my sale price.