This can help an invsetor ride out any short - term
REIT share declines, as well as any market corrections.
In October,
REIT shares declined in value for the fifth straight month, bringing an end to the industry's three - year - long bull market.
Not exact matches
There you have it, an alternative investment class that helps you avoid the volatility of stocks, bonds, and public
REITs where
declining share prices can erase the any dividend payments.
While ARMOUR Residential paid $ 1.52 per
share in 2010, the mortgage
REIT has adjusted its payouts to $ 0.81 per
share in 2013: A total
decline of 47 %.
Strong book value
declines Probably the biggest reason why ARMOUR Residential's
shares came under fire in 2013 was the mortgage
REIT posting frightening
declines in its book value.
Psychological effects of book value growth Many mortgage
REITs posted a return to positive book value growth in the first quarter of 2014 after
declines throughout 2013 and investors were throwing away their
shares in mortgage
REITs in panic mode.
A
REIT's
share price may
decline because of adverse developments affecting the real estate industry.
With the recent market
declines in this first week of February, one
REIT I hold dipped low enough for me to want to add more
shares.
As
REIT share prices
decline, these companies become ripe for takeovers.
Jonathan Habermann, a
REIT analyst with Goldman Sachs, writes in a research note in mid-June that «the sharp
decline in
REIT shares has created a unique buying opportunity as many high - quality
REITs now trade well below their liquidation values.»
Since the «Taper Tantrum» of 2013, however, the immediate response of
REIT share prices to rising interest rates has been to
decline.
Before I go any further into this, let me point out that the value of short
shares as a % of market cap for the
REIT sector has been steadily
declining since late 2008, which in my opinion has much to do with the growth of the sector and the solidification of many of the
REITs within the sector.
While most
REIT shares have
declined due to interest rate fears, SNR has seen the largest sell - off (since November 7, 2014) overall (among healthcare
REITs).
The recent
REIT decline in
share of closed volume has been replaced by private equity which has represented 59 % of the buyer composition in 2012 through mid-year..
When interest rates are rising, there's fear that the value of the mortgages owned by the
REIT will be negatively affected and cause the
shares to
decline.