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REIT Quotables

In the Media

John Wasik, Columnist
Reuters, 4/22/2013
Bugged out on gold? Try REITs instead
"REITs, which invest in mortgages and properties from shopping malls to office buildings to multi-family units, are also hedges against inflation because property owners can raise rents when the economy heats up. They are a superior investment to gold because they also offer income and benefit from an improving real estate market. "
http://www.reuters.com/article/2013/04/22/us-column-wasik-reits-idUSBRE93L15E20130422

Matt Krantz, Columnist
USA Today, 3/13/2013
REITs have attractive features for investors
“Real estate investment trusts are an excellent addition for investors looking to further diversify their portfolios. “REITs have many features that make them attractive to most investors. Their large relative dividend yields attract the most attention…. But REITs are also attractive in that they have better average long-term returns than the market.”
http://www.usatoday.com/story/money/columnist/krantz/2013/03/13/reits-real-estate-investment-trusts/1963183/

Reinor Bazarewski, Associate Director
Fitch Ratings, 2/20/2013
REIT Structure Reinforces Conservative Financial Policies
"The REIT structure also implicitly enhances management discipline with respect to capital allocation. Since REITs are unable to retain sizable amounts of cash flow, they are much more dependent on accessing the capital markets than standard corporate borrowers. As such, REITs essentially require tacit approval from investors to invest new capital in acquisitions and other growth opportunities, whereas standard corporate entities lack this implied market check."
http://www.cpexecutive.com/newsletters/capitalmarkets-newsletter/reitscolumn/reit-structure-reinforces-conservative-financial-policies/

Jim Cramer, Host, Mad Money
Real Estate Investment Today, May/June 2013
Housing the Economy
"Real Estate Investment Trusts are the bedrock of commercial real estate in this country, perhaps therefore the biggest contributor to construction jobs in this country. 'Mad Money with Jim Cramer' has been a huge supporter of REITs because they care far more about their shareholders than any other cohort in the stock market today."
http://www.realestateinvestmenttoday.com/2013/05/housing-the-economy/

Chris Mayer, Co-Director, Richman Center for Business, Law and Public Policy at Columbia University
Real Estate Investment Today, May/June 2013
Housing the Economy
"REITs present a great opportunity for both small and large investors to get exposure to the many areas of commercial real estate with liquidity and transparency in a diversified portfolio with relatively low leverage. While some investors worry about volatility of public markets, over the long-term REIT investments have performed quite well relative to their private market real estate counterparts while also limiting exposure to particular investment strategies or individual manager performance."
http://www.realestateinvestmenttoday.com/2013/05/housing-the-economy/

Academic Research

Piet EichholtzNils KokValue Added from Asset Managers in Private Markets? An Examination of Pension Fund Investments in Real Estate (Alexander Andonov, Piet Eichholtz & Nils Kok, 2013):
“Fund-of-funds in direct real estate perform worse than REIT mutual funds.” 

Dynamic Interactions Between Private and Public Real Estate Markets: Some International Evidence (Nafeesa Yunus, J. Andrew Hansz & Paul Kennedy, 2012):
“There exist stable, long run relationships between the private and public real estate markets of each country … (which) indicates that private and public real estate investments were indeed substitutable over the long run.”

MorningstarCommercial Real Estate Investment: REITs and Private Equity Real Estate Funds (Morningstar, 2011):
“Publicly traded equity REITs have outperformed core, value-added, and opportunistic funds consistently over the long term, experienced stronger bull markets, recovered faster from downturns, and had lower fees and expenses on average compared with private equity real estate funds.”
http://www.reit.com/portals/0/PDF/Morningstar-Report-REITs-and-Private-Equity-Real-Estate-Funds-2011.pdf