Buy U.S. REITs, Says Canadian Portfolio Manager

A Canadian portfolio manager said real estate investors should buy U.S. REITs (real estate investment trusts) for steadier and stronger gains, a report on Business News Network said. 

1832 Asset Management portfolio manager Tom Dicker told Business News Network that U.S. REITs have posted five straight yearly gains after a series of annual losses during the financial crunch. REIT revenues dipped by as much as 16.40 percent in 2007 and 36.94 percent in 2008, according to the report.

Dicker noted that U.S. REITs provide lower yields to investors than Canadian real estate equities because they trade in higher volumes and “own higher-quality real estate.”

He recommends U.S. REIT Prologis, the world’s largest REIT, which currently owns or has investments in about 571 million square feet in 21 countries.

According to a July press statement on Prologis’s second quarter earnings results, the company’s core funds from operations (Core FFO) per fully diluted share was $0.48 for Q2, compared with $0.41 for the same period in 2013.

In a separate report, another asset manager highlighted on investing in U.S. real estate for it is “where big money wants to be.”

On Thursday, Toronto-based portfolio manager of the MacNicol 360 Degree Realty Income Fund Scott Baker told The Globe and Mail that after 2008, fund managers “could invest almost blindly in the United States.”

Baker had first-hand experience in investing in the market with sold out projects in Miami’s South Beach. But according to him, his firm is more keen on investing in “low-risk, high quality secondary cities” such as Jacksonville, Florida, and cities in Texas and Georgia than in “big trophy projects.”

Aside from investing through U.S. REITs, investing directly in properties for lease in the United States is profitable endeavor, especially with rental rates going higher in major cities, and with foreign buyers driving market growth.

Real estate digital media firm RealBiz Media Group RBIZ is one company that owns a real estate listings video portal where property buyers can conduct their online searches.

Property investors can conduct their preliminary search on RealBiz Media’s consumer site Nestbuilder.com before actually viewing a property. The virtual tours and video listings on Nestbuilder.com allow clients to have an interactive and accurate view of the property without having to go there. No time or effort is wasted, as a result.

RealBiz Media’s platforms are targeted at real estate agents and brokers but have also proven well for consumers looking for properties across the United States. According to an independent report published on the International Business Times, consumers spend an average of 6:53 minutes viewing videos on Nestbuilder.com. 51 percent of the site’s visitors were also return visitors, it noted.