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2 Net Lease REIT Rascals To Avoid



  • If you really want to feel old, think about the shows you used to watch as a kid.
  • As I note in my upcoming book, The Intelligent REIT Investor, when a REIT does start to “go bad,” investors typically have plenty of time to get out.
  • Bad management can destroy value in a portfolio of real estate properties.
  • Looking for a helping hand in the market? Members of iREIT on Alpha get exclusive ideas and guidance to navigate any climate. Learn More »

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Photo by Hulton Archive/Hulton Archive via Getty Images

If you really want to feel old, think about the shows you used to watch as a kid.

No doubt, you can recall them pretty easily, but here are some that may or

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This article was written by

Brad Thomas profile picture

Brad Thomas has over 30 years of real estate investing experience and has acquired, developed, or brokered over $1B in commercial real estate transactions. He has been featured in Barron's, Bloomberg, Fox Business, and many other media outlets. He's the author of four books, including the latest, REITs For Dummies.

Brad, with his team of 10 analysts, runs the investing group iREIT® on Alpha, which covers REITs, BDCs, MLPs, Preferreds, and other income-oriented alternatives. The team of analysts has a combined 100+ years of experience and includes a former hedge fund manager, due diligence officer, portfolio manager, PhD, military veteran, and advisor to a former U.S. President. Learn more

Analyst’s Disclosure: I am/we are long O, BNL, EPRT, FCPT, NNN, STOR, WPC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (76)

I so enjoy your articles, Mr. Thomas, and have learned much and made some money because of them. Thanks for the memories of all of my childhood TV shows...but you missed my favorite, Michael Parks in "Then Came Bronson." I've had quite a ride, literally, and figuratively, with Harley Davidson. But now, after reading this article, I have to decide what to do with my AFIN stock, which has treated me so well this past year. Maybe it only treated me well in that I first invested after the dividend cut, and before the start of the COVID recovery.
Brad Thomas profile picture
@trident_t150 Thank you for reading and commenting... I consider entertainment value part of the value proposition for writing on Seeking Alpha.... I like writing to the masses.....

Come visit us at iREIT on Alpha ....

Have a great weekend - Brad
Brad Thomas profile picture
The Inside Scoop On "The Monthly Dividend Company"

surfgeezer profile picture
While I agree in generalized terms with @brad Thomas on the power of economies of scale and low costs of Capital being huge advantages ( long O for many years so YOIC@13.86%). I don't think he did a good job here in explaining how much better you get "Paid" (yield) to take on that "risk" of higher Capital cost's and lower yield spread margin with AFIN ( also long, bought after div cut & now YOIC@11.89% ).

Investing ALWAYS comes down to how well you get paid for risk.

To simply say something is "safer" or "more risky" is well only half of what's necessary and IMO the real "risk" is the threat of either/or thinking. Hell Treasuries are "safer" than O- so what?

I have both- because in my mind they both work High risk/high reward AND lower risk/lower reward. While it is correct to say AFIN will definitely not be growing the div or is at greater risk of even cutting the div than O- you are getting paid very well UPFRONT to see how it plays out.

'So my comment is- don't get locked into thinking either/or- keep diversified!
@surfgeezer couldn't agree with this more. Well said.
O and VER are two to avoid. They both are scams.
@Fred Ziffel I'm learning to appreciate your humor.
Brad Thomas profile picture
2 Ways REIT Investors Could Benefit From Higher Taxes

I'm glad that I didn't avoid GNL since it hit a 52 week high today
Brad Thomas profile picture
@brett626 "Drop it while it's hot" Snoop Dog
davidstetson profile picture
@brett626 I wonder if Brad T is short these names?....ouch
AFIN is up another 1.5% too. Nice yields with MOMO too.
Brad Thomas profile picture
@davidstetson nope. not short any REITs ;)
davidstetson profile picture
If you didn't own AFIN & GNL over the last 6 months you really missed out on a winner.
AFIN up 70% plus about .42in divvies
GNL up 32% plus about .80 in divvies
Both now yield about 8.5% fully covered and collecting 99% of rent
Lets see the Q 1 #'s this week, I bet they will be better than Q4
surfgeezer profile picture
@davidstetson Yes- and after listening to AFIN's, I sold more Puts @10$. Seems to me Covid recovery will help that coverage over distrib get better pretty fast and they might end up having faster div growth than O-short term- as they look to restore.
Brad always discounts how much investors overreact to div cuts- and precisely why I look to go in then ;)
sadfacejack profile picture
Thanks, Brad, for the reminders about due diligence is a necessity when looking at external managers.

Is it just me, but I remembered the "clicker" being so loud when changing the channels?
Brad Thomas profile picture
@sadfacejack Ha- I remember too :)

Have a great week and all the best - Brad

PS - Come join us at iREIT on Alpha....

You get a free book when you join iREIT on ALpha..

Here is what Sam Zell said about my new book..

“The simple genius of public REITs is that they turn bricks and mortar into transparent and predictable liquid assets. Since they tend to pay high dividends, REITs can serve as a terrific addition to an investment portfolio. Thomas’ book helps break down this asset class for the average person, making REITs more understandable, and therefore more accessible, to everyone.”

Office Rat profile picture
@sadfacejack Clicker, you had a clicker? I had to get up and walk across the room to change the channel by turning a knob. Of course, when there were only twelve channels (2-13) on the knob and three channels on TV, it wasn't such a big deal.
Douglas Payne profile picture
Taxi was my favorite TV show.
Brad: Is it wise to buy Vereit to get into O? O is really expensive at the current valuations.
Brad Thomas profile picture
@Bemylov No. We just raised O's Buy Below target to $70.00.... I would consider nibbling on O now.... and we are recommending a new preferred issue today at iREIT on Alpha that yields 6.5%..


Come join our service...

All the best -

@Brad Thomas Do you mean O preferred?
Brad Thomas profile picture
@Bemylov No... it's a new one in the mREIT space ...
Brad, you're such a hater of AFIN. I think it's overdone. I get it... They screwed equity holders in the past to prove to debt issuers who the most important stakeholders are. But maybe it's time to let that go.
Brad Thomas profile picture
@ikoskela06 As long as there are conflicts of interest and management contracts that are not benefitting investors, I will be the voice of reason.
I invite everyone to read every single quarterly earnings call since inception to make their own decisions. My issue isn't that you are incorrect but that your criticism is overweighted. You make a binary decision when reality is risk/reward.
@Brad Thomas Concur. If I have been scammed once, I don't go back to the same well to try again.
Downeast profile picture
Well sir nice work on the TV references. I was literally thinking about Hogans Heros yesterday!
Watched the Twilight Zone and Rat Patrol back to back late night in high school. And yes had to get up to change the channel on the old B&W.
Reading your first book now so i can be ready for your follow up work.
All the best
Brad Thomas profile picture
@Downeast That's terrific... Thanks for reading and commenting...

Come visit us at iREIT on Alpha....

All the best..

Another really good article Brad. Recognizing a sinking ship early is so key. No one wants to ride a company to the bottom while doubling down on their losses (think Enron or Countrywide).
And thanks for the walk down memory lane!
Liquidors profile picture
Good to see some sell side.
Nice article as usual! So, as a summary: If it is managed by AR Global, run away? :)
Brad Thomas profile picture


Emphasis RUN (as opposed to walk)
@Brad Thomas I'm curious what your thoughts are on SVC. It's unusual REIT, because half its portfolio is triple net lease retail and the other half hotels. It's probably the last truly undervalued hotel REIT compared to pre covid highs
Brad Thomas profile picture
@GuyRien1 I have not looked at SVC in a while, so I just added it to my list....

All the best

Any thoughts about the AFIN or GNL preferreds?
Brad Thomas profile picture
@labramsjr Generally, if I don't like the common, I avoid the preferred... however, I've warmed up to GNL.PA ... we just recommended new KREF issue at iREIT on Alpha: seekingalpha.com/...

Have a great weekend and all the best!
GARAK profile picture
I'm comfortable with AFINP, the 7.5% series A preferred, because I get mine as long as they're paying ANY common dividend - and it can't be called until March 2024.
Brad Thomas profile picture
@GARAK Good luck ... we're launching the all-new iREIT preferred tracker tomorrow at iREIT: seekingalpha.com/...

All the best - Brad
hawkeyec profile picture

I also have this one and with short call date I would guess it will be OK
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