REITs are companies that own, manage, acquire and sometimes develop and sell commercial real estate, such as apartments, shopping centers and office buildings. Owning commercial real estate, when not financed with excessive debt, has historically been a solid, low-risk investment. Similarly, REIT stocks have historically delivered excellent returns for their investors.
Office Building
Today, most REITs are active businesses rather than passive investment vehicles for the holding of real estate. Smart REIT management teams create value for shareholders by making intelligent acquisition and disposition decisions, developing properties at attractive returns, and through joint ventures with large institutional investors.
Successful REIT investing requires extensive knowledge of REIT management teams, real estate markets, investor expectations, effective deployment of capital, and a thorough knowledge and understanding of the world of equity investing.
Phocas Financial's team of investment advisors has over 80 years of collective experience in this specialized asset class. We have the knowledge and tools necessary to build and manage diversified REIT portfolios that deliver long-term value with moderate risk.
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Who Should Invest in REITs?
We believe virtually ALL investors should own REIT stocks as part of their diversified investment portfolios.
In 2001, the consulting firm Ibbotson Associates completed a study that showed that having a REIT component representing 10-20% of a diversified investment portfolio has the beneficial effect of increasing investment returns, while reducing risk and portfolio volatility.
Source: Ibbotson Associates Study commissioned by NAREIT.