James Dennin, Kapitall: Two major REITs merged this week. Does this signal upcoming changes in the sector? REITs can add real estate to your portfolio. Because who wants to deal with tenants directly? Two major Real Estate Investment Trusts (REITs) merged this week, American Capital Reality Properties (ARCP) and Cole Real Estate Investments Inc. (COLE). Read more on REITs from Kapitall: 5 REITs that Might be Ready to Rise Both fit into the same niche, so-called net-lease investment trusts, which means they own property leased to single, large tenants like Walgreens (WAG) or McDonald’s (MCD). Combined, they will easily create the largest security in the sector.
- The deal is said to be worth over $7 billion.
- The new REIT would control almost 4,000 properties
- This creates a combined enterprise value of over $21 billion.
- If unemployment goes down, some REITs stand to benefit as more people can afford to buy or rent larger homes.
- On the flip -side, low unemployment is likely to lead to faster tapering from the Fed, and with that comes higher interest rates.
Click on the interactive chart to see dividend yields over time.Do you see REITs as a good way to invest in real estate? Use the list below as a starting point for your own analysis. 1. Avalonbay Communities Inc. ( AVB): Engages in the development, redevelopment, acquisition, ownership, and operation of multifamily communities in the United States. Market cap at $17.14B, most recent closing price at $132.71.
2. Health Care REIT, Inc. ( HCN): Engages in investment, development, and management of properties. Market cap at $17.6B, most recent closing price at $64.45.
3. HCP, Inc. ( HCP): An independent hybrid real estate investment trust. Market cap at $19.13B, most recent closing price at $42.07.
4. Annaly Capital Management, Inc. ( NLY): Engages in the ownership, management, and financing of a portfolio of investment securities. Market cap at $11.1B, most recent closing price at $11.72.
5. Vornado Realty Trust ( VNO): Vornado Realty Trust is a privately owned real estate investment trust. Market cap at $16.59B, most recent closing price at $88.74.
( List compiled by James Dennin, a Kapitall Writer. Dividend yields sourced from Zacks Investment Research, all other data sourced from Finviz.)