RQI: Collecting A High Yield From Real Estate Exposure

Summary

• Cohen & Steers Quality Income Realty Fund operates as a closed end fund that offers investors a 7% yield paid out on a monthly basis.
• The real estate sector should experience positive momentum driven by future interest rate cuts. Lower rates would improve operating margins and reduce the weight of fund leverage.
• The price still trades at an attractive discount to NAV.
• The dividend is supported through a combination of net investment income and net realized gains. No return of capital has been used YTD, indicating healthy coverage.

Richard Drury

Overview

Now that the Fed has implemented their first 50 basis point interest rate cut, I anticipate the real estate sector to see some positive price momentum over the next twelve months. Real estate, a sector heavily reliant on debt, will

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in RQI over the next 72 hours. 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.