How many industrial REITs are there?
What is the largest industrial REIT? Prologis Inc. (NYSE: PLD) is the largest industrial REIT in the world.
What is the largest industrial REIT? Prologis Inc. (NYSE: PLD) is the largest industrial REIT in the world.
Industrial REITs own and manage industrial facilities and rent space in those properties to tenants. Some industrial REITs focus on specific types of properties, such as warehouses and distribution centers. Industrial REITs play an important part in e-commerce and are helping to meet the rapid delivery demand.
The two main types of REITs are equity REITs and mortgage REITs, commonly known as mREITs. Equity REITs generate income through the collection of rent on, and from sales of, the properties they own for the long-term. mREITs invest in mortgages or mortgage securities tied to commercial and/or residential properties.
One of the benefits of industrial REITs is that they are adaptable to meet the demands at any time during an economic cycle. Unlike commercial properties REITs, where units are built according to each tenant's preferences, industrial REITs are built in a way that they can be customized to different uses.
However, Berkshire sold its holdings of STORE Capital in 2022 after the company announced it was being acquired by two outside investment funds. Since then, filings have shown that Berkshire Hathaway has not owned shares of any other REIT.
| # | Name | C. |
|---|---|---|
| 1 | Prologis 1PLD | 🇺🇸 |
| 2 | American Tower 2AMT | 🇺🇸 |
| 3 | Equinix 3EQIX | 🇺🇸 |
| 4 | Simon Property Group 4SPG | 🇺🇸 |
Industrial REITs own and manage industrial facilities such as warehouses and distribution centres and lease these spaces out to tenants. Retail REITs own and manage retail real estate and lease these spaces out to tenants. *Dasin Retail Trust is a Property Trust.
First Industrial Realty Trust, Inc. is a leading owner, operator, and developer of industrial real estate with a track record of providing industry leading customer service to multi-national corporations and regional customers.
Dream Industrial Real Estate Investment Trust (TSX: DIR. UN) (Dream Industrial, or DIR. UN) owns, manages and operates a portfolio of 322 industrial assets totalling approximately 70.6 million square feet of gross leasable area in key markets across Canada, Europe, and the U.S.
What is the 90% rule for REITs?
To qualify as a REIT, a company must have the bulk of its assets and income connected to real estate investment and must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends.
| Symbol | Company | REIT performance (1-year total return) |
|---|---|---|
| AOMR | Angel Oak Mortgage Inc. | 60.92% |
| SKT | Tanger Outlets | 55.01% |
| MDV | Modiv Industrial Inc. | 44.80% |
| SEVN | Seven Hills Realty Trust | 41.52% |
Federal Realty has the longest running dividend streak in the REIT industry as they have paid and increased their dividend for 55 consecutive years.
There are three types of REITs; equity, mortgage, and hybrid. Equity REITs operate and manage income-producing property. This is the most popular type of REIT and usually earns income from rents. Mortgage REITs lend money to property owners and operate like a mortgage.
Innovative Industrial Properties, Inc. (NYSE IIPR) is an internally managed real estate investment trust (REIT) focused on the acquisition, ownership and management of specialized properties leased to experienced, state-licensed operators for their regulated cannabis facilities.
Prologis Inc, American Tower Corp, and Equinix INC were the real estate investment trusts (REITs) worldwide with the largest market caps as of March 2023.
Poor Rates Of Compounding: Another big reason why REITs generally have low appeal to Buffett and Munger is because real estate generates poor returns on invested capital.
Buffett worked with Christopher Webber on an animated series called "Secret Millionaires Club" with chief Andy Heyward of DiC Entertainment. The series features Buffett and Munger and teaches children healthy financial habits. Buffett was raised as a Presbyterian, but has since described himself as agnostic.
“I recommend REITs within a managed portfolio,” Devine said, noting that most investors should limit their REIT exposure to between 2 percent and 5 percent of their overall portfolio. Here again, a financial professional can help you determine what percentage of your portfolio you should allocate toward REITs, if any.
A REIT will be closely held if more than 50 percent of the value of its outstanding stock is owned directly or indirectly by or for five or fewer individuals at any point during the last half of the taxable year, (this is commonly referred to as the 5/50 test).
What is better than REITs?
Direct real estate offers more tax breaks than REIT investments, and gives investors more control over decision making. Many REITs are publicly traded on exchanges, so they're easier to buy and sell than traditional real estate.
If you are interested in a real estate investment that is reliable, hands-off and offers dividends, REITs could be the answer. If you're looking for a higher-risk – but high-potential – investment or want to be able to invest in specific companies you admire, buying individual stocks could be the answer.
Direct real estate investments may be more expensive upfront but give investors increased control and flexibility. Both real estate and REITs can help investors hedge inflation and market downturn risks. Both can also be a source of regular cash flow, though REITs are a much more passive investment than real estate.
Well…it turns out that the average return on REITs outclasses the average return on stocks by a noticeable margin when looking at certain timeframes. Let's get into the data. Although REITs were established in 1960, NAREIT did not track return data until 1972.
Affiliates of Blackstone Property Partners and Ivanhoé Cambridge Inc. acquired 62% and 38% of PIRET, respectively.
