Apartments And Self-Storage Help REITs
SOURCE: Wall Street Journal Online
A rally in real-estate investment trusts for the first quarter was brought on due to strong gains realized by two of the industries that benefit from the housing bust. These industries are apartments and self-storage. Eight of the top 10 performers last quarter by way of total returns -- a combination of stock-price appreciation and dividends -- were apartment or self-storage REITs.
The self-storage industry is doing well, right along with apartments, because people who can't afford the cost of their homes are moving. Mike Kirby, director of research for the investment-research firm Green Street Advisors, says "The simple logic there is that as people downsize their housing, they need some place to store their stuff."
Apartment REITs have a real advantage over the other REIT classes. They are able to borrow from Fannie Mae and Freddie Mac which helps to provide a stable source of capital to them. Because Fannie and Freddie are government-backed lenders they have a mandate to provide credit for affordable housing.
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A rally in real-estate investment trusts for the first quarter was brought on due to strong gains realized by two of the industries that benefit from the housing bust. These industries are apartments and self-storage. Eight of the top 10 performers last quarter by way of total returns -- a combination of stock-price appreciation and dividends -- were apartment or self-storage REITs.
The self-storage industry is doing well, right along with apartments, because people who can't afford the cost of their homes are moving. Mike Kirby, director of research for the investment-research firm Green Street Advisors, says "The simple logic there is that as people downsize their housing, they need some place to store their stuff."
Apartment REITs have a real advantage over the other REIT classes. They are able to borrow from Fannie Mae and Freddie Mac which helps to provide a stable source of capital to them. Because Fannie and Freddie are government-backed lenders they have a mandate to provide credit for affordable housing.
WSJ Subscriber only report »
