Comments on: Should I invest in a REIT?

By: Weekly Dividend Investing Roundup - November 29, 2008 » The Dividend Guy Blog

Sat, 29 Nov 2008 11:00:44 +0000

[...] Should you buy REITs [...]

By: Nawar Alsaadi

Nawar Alsaadi — Tue, 25 Nov 2008 06:41:29 +0000

Upon doing further DD, I have purchased significant position in H&R this morning, I believe the unit price already reflect a possible 50% cut in the payout, while the current market cap gives ample protection in case of asset sales in a depressed market.

Thus getting an average of 14%/15% dividend (assuming a 50% cut), while waiting for the equity to appreciate back to book value $15+ seems like an excellent deal.

Finally, it is worth noting that 50% of H&R loans are non-recourse financing, thus in an event of an issue of those loans, the risk will be limited to the underlying property and not the whole company.

Regards,
Nawar

By: The Well-Heeled | Creating Wealth Through Knowledge

The Well-Heeled | Creating Wealth Through Knowledge — Fri, 21 Nov 2008 15:31:58 +0000

[...] Thicken My Wallet: Should I invest in a REIT? [...]

By: admin

admin — Tue, 18 Nov 2008 18:21:43 +0000

I actually think H&R bite off more than it could chew with the Bow. That is a massive development in a region with upward wage pressures that I am not sure it is equipped to build it out properly. Having said that, H&R has a reputation for being well-run so its not as if they are bumbling idiots. There will probably be a lot of short-term pain but they will see it through.

By: Potato

Potato — Tue, 18 Nov 2008 13:21:09 +0000

Thanks TMW, this was a good article on REITs.

I’ve thrown my hat (and a lot of my money) behind REITs as a value play, rather than value trap. H&R is my standard-bearer, and yes, the news that they haven’t secured financing for the Bow was a bit of a blow. Nonetheless, I’m playing the hopeless optimist here and thinking that while selling off assets is an option on the table, that they should be able to find the financing they need — credit is tight, but not completely gone, and if H&R can’t get a billion dollar loan, who can?

The falling assessed value can be an issue, but for many my understanding is that the value on their properties is several years old, and so possibly not (severely) affected by the bubble and subsequent crash.