Financial News
Why Some Experts Say Investors Should Take a Close Look at REITs
Palm Beach, FL –January 5, 2022 – FinancialNewsMedia.com News Commentary – Recently, The Motley Fool, looked at diversification, specifically, REITs. They indicated most people have heard the old saying, “Don’t put all your eggs in one basket.” The logic: If a farmer were to stumble while bringing the basket of eggs back from the henhouse, they could end up with a messy situation. Those words of wisdom go well beyond farming; they also perfectly encapsulate the idea of not risking all your money on a single investment. One way investors can reduce their risk of a cracked nest egg is by diversifying their portfolio. A diversified portfolio is a collection of different investments that combine to reduce an investor’s overall risk profile. Diversification includes owning stocks from several different industries, countries, and risk profiles, as well as other investments such as bonds, commodities, and real estate. These various assets work together to reduce an investor’s risk of a permanent loss of capital and their portfolio’s overall volatility. In exchange, the returns from a diversified portfolio tend to be lower than what an investor might earn if they were able to pick a single winning stock. A recent article said: “A REIT (pronounced REET), or real estate investment trust, is an entity that holds a portfolio of commercial real estate or real estate loans. Congress created REITs in 1960 to provide all investors, especially small investors, with access to income-producing commercial real estate. REITs combine the best features of real estate and stock investment.” Active Companies in the markets today include Presidio Property Trust, Inc. (NASDAQ: SQFT), Seritage Growth Properties (NYSE: SRG), SL Green Realty Corp. (NYSE: SLG), New York City REIT, Inc. (NYSE: NYC), Medical Properties Trust, Inc. (NYSE: MPW).
The article continued: “There are several types of REITs. Diversified REITs own and manage a diversified portfolio of commercial real estate. For example, they might have a portfolio of office properties and industrial real estate. Some diversified REITs focus on specific markets, owning a mix of residential, retail, and office properties in one city. It said that investors should consider investing a portion in real estate. Investors who want to take their portfolio diversification to another level should consider adding real estate to the mix. Real estate has historically increased a portfolio’s total return while reducing its overall volatility. An easy way to do this is by investing in real estate investment trusts (REITs), which own income-producing commercial real estate. The sector has an excellent track record. In the 25-year period ending in 2019, REITs, as measured by the FTSE Nareit All Equity REIT Index, outperformed the S&P 500 in 15 of those years and generated an average annual total return of 10.9%.“
Presidio Property Trust, Inc. (NASDAQ: SQFT) BREAKING NEWS: Presidio Property Trust Announces Special Warrant Dividend – Presidio Property Trust, Inc, an internally managed, diversified real estate investment trust (“REIT”), today announced the declaration of a special warrant dividend.
All holders of record of Presidio’s common stock and existing outstanding warrants as of January 14, 2022 will receive one warrant for each common share or existing warrant held. The warrant dividend is expected to be issued on or around January 24, 2022. These warrants will give the holder the right to purchase one share of Presidio common stock at $7.00 per share, for a period of five years. Should shareholders not convert the warrants during that holding period, the warrants will automatically convert to 1/10 of a common share at expiration, rounded down to the nearest number of whole shares.
“This special dividend reflects our appreciation for the support of our shareholders, as well as optimism about our future,” said Jack Heilbron, Chief Executive Officer and President of Presidio. “The innovative automatic conversion feature assures that warrant holders will be entitled to receive additional common shares of Presidio, subject to the warrant’s terms. We have applied for these warrants to trade on the Nasdaq Capital Market under the symbol SQFTW and expect trading to begin on or around January 24, 2022.”
The warrants and the shares of common stock issuable upon the exercise of the warrants will be registered on a registration statement on Form S-11 (File No. 333-260885) that was filed with the Securities and Exchange Commission and is expected to be declared effective on or around January 21, 2022.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of such securities under the securities laws of that state or jurisdiction. Any offer of securities covered by the registration statement will be made solely by means of a prospectus included in the registration statement. CONTINUED… To Read This Full Press Release for Presidio Property Trust Please Visit: https://presidiopt.com/press-releases/
Other recent developments in the real estate industries include:
Seritage Growth Properties (NYSE: SRG), a national owner and developer of 170 retail, residential and mixed-use properties, recently announced that on December 31, 2021, the Company made a voluntary prepayment of $160 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Nebraska (“Berkshire Hathaway”).
The prepayment follows the amendment to the Senior Secured Term Loan Agreement with Berkshire Hathaway announced on November 29, 2021 under which Seritage and Berkshire Hathaway agreed that the Senior Secured Term Loan Agreement may be extended for two years from the July 31, 2023 maturity date (the “Maturity Date”) to July 31, 2025 provided that the term loan facility’s principal has been reduced to $800 million by the Maturity Date. Additionally, the companies mutually agreed that the “make whole” provision of the Senior Secured Term Loan Agreement shall not be applicable to prepayments of the term loan facility’s principal.
SL Green Realty Corp. (NYSE: SLG), Manhattan’s largest office landlord, recently announced the sale of its ownership interest in 707 Eleventh Avenue for a gross sale price of $95.0 million to a domestic buyer. SL Green purchased the 160,000 square foot, loft-style building in January of 2020 for $90.0 million. The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions. Proceeds from the sale are expected to be used for the repayment of corporate debt.
“The sale of 707 Eleventh Avenue demonstrates investor demand for quality, value-add investment opportunities in New York City,” said Harrison Sitomer, Senior Vice President of SL Green. A team led by Andrew Scandalios at JLL represented SL Green in the transaction.
SL Green Realty Corp., Manhattan’s largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of September 30, 2021, SL Green held interests in 76 buildings totaling 35.3 million square feet. This included ownership interests in 27.2 million square feet of Manhattan buildings and 7.3 million square feet securing debt and preferred equity investments.
New York City REIT, Inc. (NYSE: NYC) recently announced that it intends to continue to pay dividends on its shares of Class A common stock at an annualized rate of $0.40 per share or $0.10 per share on a quarterly basis. NYC anticipates paying dividends authorized by its board of directors on its shares of common stock on a quarterly basis in arrears on the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to common stock holders of record on the record date for such payment.
Accordingly, NYC declared a dividend of $0.10 per share on each share of NYC’s Class A common stock payable on January 18, 2022 to common stock holders of record at the close of business on January 13, 2022. New York City REIT, Inc. is a publicly traded REIT that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City.
Medical Properties Trust, Inc. (NYSE: MPW) recently announced financial and operating results for the third quarter ended September 30, 2021, as well as certain events occurring subsequent to quarter end. “We are delighted to see value creation recognized in our strong portfolio through the recent transactions in Massachusetts and Utah, as well as in Steward as a preeminent operator,” said Edward K. Aldag, Jr., Chairman, President, and Chief Executive Officer. “As I always say, our hospitals are a part of the infrastructure in their communities, but the real importance is in the value of our demonstrated ability to identify and underwrite the full potential of both individual hospitals and regional portfolios.”
Mr. Aldag continued, “We manage our business for long-term shareholder returns, supported by both a dividend well-covered by lease payments from our tenants and consistent growth in per share AFFO, while staying within certain long-term balance sheet parameters. Our shareholders should expect nothing different from us going forward, and we have never felt better about our range of attractive capital options and investment opportunities than we do today.”
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