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I can't talk about a list of REITs worth buying without mentioning at least one pure-play retail landlord. Ironically, retail REITs aren't looking so hot. They're only second to health care REITs in terms of technical weakness. But one big name is showing some signs of strength:
General Growth Properties (
GGP owns interests in approximately 170 regional shopping malls across the U.S., a business that provides the firm with a combination of consistent lease income and a smaller cut of retail sales at its properties. GGP is a perfect example of why REITs generate income so well -- the firm rents out stores using long-term triple-net leases that keep volatile expenses like taxes, insurance, and maintenance off of GGP's list of responsibilities. The result is fairly predictable income that must be paid out to shareholders each quarter.
To be fair, things haven't always been so rosy over at GGP. The firm went bankrupt in 2009 when the collapse of the credit markets made it impossible for the firm to renegotiate its large mortgage debt load. While the firm re-emerged from bankruptcy stronger (and at a time with borrowing costs at historic lows), the drama is still pretty fresh in the minds of many investors.
That said, it's showing the best relative strength in the retail REIT space right now. That makes it the name to own.
To see these five REITs in action, check out the
REITs to Buy Fall 2013 portfolio on Stockpickr.
-- Written by Jonas Elmerraji in Baltimore.