Residential REIT thread

[crimsonghost747]

I'm pretty sure we have some REIT threads, but I couldn't find a recent one. And they are pretty varied regarding the types of REITs. 
So here is a thread specifically for REITs that are focused on residential buildings. 

Northview has been my darling for years but they just announced that they are being bought out.  There is some hope that we can invest into them in the future in the form of the following:

"Unitholders will be able to elect to receive 100% of the Offer Price in the form of cash (the “All-Cash Consideration”). Alternatively, unitholders may elect to receive all or a portion of the Offer Price in units of a new, multi-residential fund that would own a geographically diverse portfolio of Northview properties located in six Canadian provinces and two territories (the “High Yield Fund”). The High Yield Fund will apply to list its units on a Canadian securities exchange (the “Exchange”) concurrently with the close of the Transaction."

But I think this is a good time to evaluate my options. Definitely looking for something that has a high percentage in residential buildings, yield should be 4%+ and monthly distributions would be awesome but of course not mandatory. Location doesn't matter as long as it's not Africa or Middle east. 

Any ideas? 
I'll be researching this in the coming weeks so I'll post back with my findings.

[fenders53]

Looking forward to the results of your research. I only have a few health related REITs at the moment. WELL and MPW.

[EricL]

The residential REITs I have on my watch list are AVB, ELS, ESS, and MAA.

I don't own any of them, so don't have much for info other than the tickers.

All have yields of 2.5% or less.

[MikeWa]

Also check APTS. it has a low p/ffo (~5) and high yield (8.5%). I don't own it.

[vbin]

Holder of STWD for 2-3 years. Regret not buying more. I had O as well when it was sliding down couple of years back. Sold it for a decent profit( not a good decision). Eyeing SPG, might buy it there is an overall correction in market.

[fenders53]

Unfortunately I never invested in any REITs at all until the past year or so. What have the "normal" PEs been, from a historical perspective, for the high quality residential REITS? I'm aware there are still some high yielders, and I assume those are typically over-leveraged with debt? It's probably time for me to start averaging into a few REITs soon.

[crimsonghost747]

It's really hard to give any sort of a "regular" number, as it really depends on a million things. And P/E is kinda useless since it includes depreciation and amortization, numbers that the REITs of course have to include but are kinda useless since the majority of residential real estate does not depreciate. Funds from operations (FFO) is more commonly used, and of course some prefer to use the adjusted FFO. They all report FFO in their quarterly reports too.

The only REIT I had was Northview. Well I still have it but some bastards are stealing it away from me. At a 13% premium but I still consider that a good deal for them, not a great deal for me. I don't remember the numbers exactly but their investor report from January says that their P/AFFO was a little over 16. Yield at the time was somewhere between 5% and 6%. It's been significantly lower too, I did my buys a lot lower and it must have been around P/FFO of 12 or 13. Yield was maybe around 8%.

This REIT has always traded at a lower valuation than the others though, mainly due to quite a bit of exposure to areas that live or die based on natural resource prices. Many other Canadian ones seem to have their P/AFFO at 20+.

Yes, those high yielders usually have a reason for that high yield. Sometimes it's debt, sometimes it's something else. Just be sure to stay away from mREITs, (unless that is what you want) because they are a whole different beast. And usually come with attractive 10% yields. :p

edit: My current research has me at 10 tickers just from US and Canada. Still need to look into Europe and Asia and then start narrowing down. This will take some time and I'm not in a particular hurry as I have a couple of months to do this.

[fenders53]

I misspoke. I meant yield and not P.E. I know they it's all about cash flow.