REITs Prefer Asset Sales to Stock Issues
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Most publicly listed REITs trade at an average 11% discount to NAV.
NEW YORK CITY—The public REIT sector has traded at an average 11% discount to NAV lately, Fitch Ratings reports, thereby reviving the popular slogan that real estate is “cheaper on Wall Street than Main Street.”?Those discounted valuations in the public markets have REITs looking at asset sales, rather than stock issues, to fund investments.
Accordingly, the ratings agency expects real estate trusts to continue mining their portfolios for dispositions through the balance of 2015 and into next year to upgrade their portfolios, fund investments and possibly improve credit profiles. Certainly, a representative sampling of third-quarter earnings reports shows that dispositions have been on the agenda lately…
