Professional Documents
Culture Documents
Investments
By Elizaveta Shishkova
Vasil Aydarov
Isidora Turnaj-Elhart
Francesco Torraco
Definition & Functions
• Equity REITs
• invest in and own income-producing real estate properties
• distribute at least 90% of the portfolio’s income as dividends
• Invest in leasing, development, and construction
• Mortgage REITs
• invest in and own property mortgages
• Make mortgages (lend money), usually on existing property
• Buy mortgages
• •Hybrid REITs
• Invest in properties and make loans
Types pf REITs by Property
Structure
Cash Flows
Why to Invest?
• Portfolio Diversification
• Low correlation with other assets
• Access to Real Estate market
• Tax Benefits on Corporate Level
• Capital Gain + Dividends
• Inflation Hedge
• Liquid
• Is it an income stock or growth stock
• REITs are ~income stocks:
• Dividend restrictions
• Mostly, REITs will invest in mature income producing properties
Correlation
Risks
• $1 Invested
• Dividends reinvested
Relative Performance
Benchmarked performance until 2016
Real Example – STAG Industrial Inc.
• https://www.sec.gov/fast-answers/answersreitshtm.html
• https://www.reit.com
• https://www.investopedia.com
• https://
beta.marketrealist.com/2017/07/investing-reits-risk-worth-taking?utm_s
ource=redirect50&utm_medium=auto
• https://
www.blog.invesco.us.com/commercial-real-estate-reit-performance
• https://www.simplysafedividends.com/real-estate-investment-trusts-reits/
• Annual Report of STAG Industrial Inc.