REITs are faring poorly, but investors still love real estate - WSJ

Apr. 27, 2018 12:18 PM ETVNQ, IYR, RQI, SCHH, RNP, RFI, KBWY, DRN, NRO, URE, ICF, XLRE, JRS, RWR, SRS, FREL, DRA, DRV, SEVN, LRET, REK, RIT, FRI, USRT, PSR, WREI, IARAX, RORE, PPTYBy: Stephen Alpher, SA News Editor25 Comments
  • The REITs have underperformed the S&P 500 by more than 15 percentage points over the last 12 months, with the sector now trading at a 16.4% discount to net asset value - one of the widest margins ever, according to Green Street Advisors.
  • Private real estate funds, however, are seeing a gusher of money - $71B into funds that closed last year, according to Preqin.
  • Private funds' advantage? Absurd as it sounds, their prices aren't aren't listed in the papers (or the online equivalent) every day, perhaps giving comfort to investors who don't like to see down arrows on investments they own.
  • Investors might do well to remember, writes Ken Brown at Heard on the Street, that risk isn't volatility, but rather the chance of a permanent loss of capital. It might be a better idea to grab the publicly traded REITs and wait for those discounts to narrow.
  • ETFs: VNQ, IYR, RQI, SCHH, RNP, RFI, KBWY, DRN, NRO, URE, ICF, XLRE, JRS, RWR, SRS, FREL, DRA, DRV, RIF, LRET, REK, RIT, FRI, FTY, PSR, USRT, WREI, IARAX, RORE, PPTY

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