REITs and NAV

I have been watching a slew of REITs lately trying to understand their characteristics (technical and fundamental). I have a friend who works for a REIT here in town. He's been giving some insight as to what the market is doing etc. Info like, "Based on empirical studies, they do provide diversification benefits. However, they are not a direct substitute for unsecuritized real estate." His company has been raising well over 100 million a month and are having a difficult time finding acquisitions. REITs in general are getting a lot of attention lately.

It seems that they trade a lot like mutual funds, whereby the stock price is usually at a discount from NAV and are approach with similar techniques. If you can find some that are 30% below NAV for more than 3-months, they can be traded with the potential of adding a few basis points to your return.

Currently I am looking for the smallcaps trading below 20% NAV. If you see any, let me know.
 
I've seen a lot of Closed End Funds that trade consistantly at discounts, but in the first two years I traded...quite a few REITs went 10%-15% to the premium side. The opportunities are pretty frequent, but it is difficult to gather all the financial info without a service like Realty Stock Review. The fact that a REIT is a "Trust" really is a indicator of tax status rather than a structure. I read in a mag once where this "financial advisor" declared "...and real estate trusts trade almost like stocks!" .... well DUH....they ARE individual stocks....except they pay no tax at the corp level as long as they pay out 90% of their taxable income. (No double taxation....before no double tax was cool)

I'm not pushing RSR, even though the data is convenient and pretty high quality. As soon as I could find an alternate NAV source (only), I would move there. Customer service is less than optimal....raise price....take away info delivered...turn around and offer that same info for more than the whole sub price. Ugly...

Anyway here are the 99 Reits I follow. 20% Large70% Medium 10% Small Cap

Good Luck!
Bruce
 

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Quote from bcavender:

I've seen a lot of Closed End Funds that trade consistantly at discounts, but in the first two years I traded...quite a few REITs went 10%-15% to the premium side. The opportunities are pretty frequent, but it is difficult to gather all the financial info without a service like Realty Stock Review. The fact that a REIT is a "Trust" really is a indicator of tax status rather than a structure. I read in a mag once where this "financial advisor" declared "...and real estate trusts trade almost like stocks!" .... well DUH....they ARE individual stocks....except they pay no tax at the corp level as long as they pay out 90% of their taxable income. (No double taxation....before no double tax was cool)

I'm not pushing RSR, even though the data is convenient and pretty high quality. As soon as I could find an alternate NAV source (only), I would move there. Customer service is less than optimal....raise price....take away info delivered...turn around and offer that same info for more than the whole sub price. Ugly...

Anyway here are the 99 Reits I follow. 20% Large70% Medium 10% Small Cap

Good Luck!
Bruce
More...

great info. thanks for sharing. vhehn
 
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