As a REIT gets bigger (or added to an index) investors must increase their investment in these companies. Interestingly, many active investment advisors are measured against these indexes and view a company's inclusion as a signal to pay attention to them.
That's exactly what's happening now with Healthcare Trust of America and in June HTA will unlock more shares (from its previous non-listed REIT shareholder pool) and I suspect that the investment appeal will increase. We're already seeing that now...
When Healthcare Trust of America went public in June, it was not owned by any institution or included in any index, limiting its investment appeal.
That has changed significantly since. Last fall, HTA's stock was added to several REIT indexes -- notably the MSCI US REIT Index and the Wilshire Real Estate Index. Institutional shareholders have also taken note, and increased their overall ownership stake in the company.Healthcare Trust of America volume is averaging around one million shares a day and that should continue as the company is expected to be added to several more indexes over the next year which should further increase investor demand.
Healthcare Trust of America should continue to be a top performer in 2013 driven by the continued demand in high-quality income and strong capital appreciation. The stock is trading at $11.61 a share with a 4.95% dividend yield. My target price is $13.50. At the time of publication the author held no positions in any of the stocks mentioned. Follow @swan_investor This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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