Caveat Emptor: Beware Of These 2 Rotten REITs

2025-01-28 07:00:00 ET

Summary

• Investing in high-quality REITs offers predictable cash flows and strong capital access, but chasing high yields often signals low growth or potential dividend cuts.
• Global Net Lease faces risks due to weaker capital, high debt, and a history of dividend cuts, making it a poor investment choice.
• Sachem Capital struggles with non-accrual loans and frequent dividend cuts, suggesting better alternatives like Ladder Capital and Starwood Properties.
• Prioritize REITs with safe dividends and growth prospects to avoid painful losses and protect your principal in the long term.

One of the great things about investing in real estate investment trusts, or REITs, is that as an analyst, you can forecast quarterly results with a high degree of certainty.

That’s because of the business model and predictability of operating cash flows, rents, built-in-increases, and operating expenses....

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