This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

REITs on the Street: Lower Prices Mean Buying Opportunities

NEW YORK ( TheStreet) -- Real estate investment trusts hit the brakes in May when Federal Reserve Chairman Ben Bernanke suggested a decrease in the central bank's bond-buying program likely to start later this year. The question is whether REITs' valuations have dropped enough to make them good investments.

REITs took a pounding after the bear market of 2008-09. The real estate recovery has since been a beacon of opportunity as equity REITs returned almost 20% in 2012 and triple-net REITs returned 22.46% that year. Equity REITs invest in and own properties, as opposed to mortgage REITs that finance them. Triple-net REITs are made up single-tenant properties with long-term contractual leases.

Through July 31 of this year, equity REITs have returned 6.67% and the triple-net REITs have returned 11.21%, according to the National Association of Real Estate Investment Trusts and SNL Financial, as investors became spooked by the talk of withdrawing stimulus. That might have been good for REITs since they may have overvalued before. Now after the REIT selloff since May, prices are down, while fundamentals are strong and the economy is improving.

Since May 22, according to SNL Financial, US Equity REITs fell 12.48% and many of the leading triple-net REITs dropped by around 20%.

As for REITs' underlying business, most shopping center REITs have had occupancy and same-store sales improvements. Major self-storage REITs have also seen occupancy levels climb. For instance, Public Storage's (PSA) occupancy rate has risen to over 95%.

Here are four REITs that pay dividends above 6%. These REITs are all higher-yielding triple-net REITs trading at fair valuations (see chart below). Chambers Street (CSG) is arguably trading at a bargain level. American Realty Capital Properties (ARCP), Monmouth Real Estate Investment Trust (MNR), and EPR Properties (EPR) also offer yields above 6%. Here's a snapshot of the four REITs:

At the time of publication, Thomas was long Chambers Street.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $126.35 2.50%
FB $83.18 -0.14%
GOOG $551.83 0.64%
TSLA $194.50 5.10%
YHOO $44.95 -0.33%

Markets

DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs