Page 25 - ARUBA TODAY

BUSINESS Monday 20 noveMber 2017
A25

Warehouse, infrastructure owners buck sluggish REIT market

ter option.” The FTSE Nareit become more attractive
All Equity REITs Index, which alternatives to REITs, which
is made up of 167 REITs, are comparatively riskier in-
has a price return so far this vestments.
year of about 6.7 percent, The yield on the 10-year
while its total return, which Treasury note declined to
includes dividends, is about 2.32 percent on Wednes-
10.1 percent, according to day. It started the year at
data from the National As- around 2.45 percent and
sociation of Real Estate In- declined gradually through
vestment Trusts. the first half of the year to a
That lags the Standard & low of about 2.04 percent
Poor’s 500 index, which is in early September. It has
up about 14.6 percent, or been moving mostly mov-
roughly 17.2 percent in- ing higher since then.
cluding dividends. Still, Anderson notes that
REITs tend to appeal to in- REITs have often bounced
vestors seeking high yields back strong after a pe-
because the companies’ riod of rising interest rates.
tax structure requires them Heading into 2018, he rec-
to pay out most of their in- ommends investors take
come, which usually comes a targeted, rather than
from rent and lease pay- broad, approach to invest-
ments, as distributions to ing in REITs.
Shoppers sit while taking a break at the Garden State Plaza mall, in Paramus, N.J. Real estate shareholders. But REITs also “There are certainly rea-
investment trusts are lagging the broader market this year, weighed down by struggling malls and require a lot of money, and sons to own the space, and
weak growth in other sectors. Rising interest rates, which can make REITs less attractive to dividend often debt, to operate. as you selectively look with-
investors, haven’t helped. But warehouse, data center and other types of REITs are bucking the So when interest rates rise, in sectors and be selective
trend. it drives the cost of borrow- at the stock level, there are
(AP Photo/Julio Cortez) ing up, which can cut into definitely ways to make
By ALEX VEIGA ers have weighed on real ongoing dialogue about profits and lead to smaller money,” he said.
AP Business Writer estate investment trusts, rising interest rates,” said dividend payouts. The outlook for commercial
While the broader stock offsetting healthy gains by Mizuho REITs analyst Rich- The Federal Reserve has real estate remains largely
market has been steadily residential and industrial ard Anderson. “We’ve raised interest rates twice positive, with a slowdown in
racking up gains and post- REITs. Rising interest rates, have also seen some fairly this year and is expected construction expected to
ing new highs, companies which can make REITs less quick moves in the 10-year to do so again next month. help keep rents rising mod-
that own real estate have attractive to dividend in- Treasury and that has coin- REITs are also vulnerable to estly next year amid mostly
been lagging, with some vestors, haven’t helped. cided with REITs’ underper- an increase in long-term stable vacancy rates, ac-
notable exceptions. “Part of REITs’ modest un- formance as people who bond yields. That’s be- cording to a forecast by
Losses by struggling mall derperformance this year are owning the REITs for their cause as bonds start pay- the National Association of
and shopping center own- has been a function of the dividend yield seek a bet- ing out more, they can Realtors.q

Treasury chief a Bond villain? Mnuchin OK with comparison

By MARTIN CRUTSINGER ie.” Mnuchin said he wasn’t than you’d be willing to
AP Economics Writer bothered by the Twitter at- sacrifice if the choice was
WASHINGTON (AP) — tacks over the photo. yours.” Linton later apolo-
Treasury Secretary Steven “People have the right to gized for her comments. q
Mnuchin said Sunday he do that. People can ex-
had no idea that a photo press what they want,” he
of him and his wife posing said. “That’s the great thing
with a sheet of newly print- about social media today.
ed money would go viral. People can say and com-
And he said he’s not both- municate what they want.”
ered that some commen- Mnuchin’s wife created
tators suggested the pair a furor on social media in
looked like James Bond vil- August when she posted
lains. an Instagram photo of the
Mnuchin had invited his two of them stepping off a
wife, Louise Linton, to join government jet on a trip to
him for what is usually a Kentucky. In the photo, Lin-
routine photo of a treasury ton had included hashtags
secretary examining cur- Treasury Secretary Steven Mnuchin, right, and his wife Louise of various luxury design-
Linton, hold up a sheet of new $1 bills, the first currency notes
rency being printed with his bearing his and U.S. Treasurer Jovita Carranza’s signatures, ers she was wearing. That
signature. Wednesday, Nov. 15, 2017, at the Bureau of Engraving and prompted criticism from an
But the photo from Wednes- Printing (BEP) in Washington. Oregon woman who said,
day’s event became an in- (AP Photo/Jacquelyn Martin) “Glad we could pay for
ternet sensation. It showed the sheet of $1 bills. probably should take it as your little getaway.”
Mnuchin and Linton — who Mnuchin, a former Holly- a compliment that he’s be- Linton responded: “Pretty
was wearing long black- wood producer, said on ing linked to a “great, suc- sure the amount we sacri-
leather gloves — holding “Fox News Sunday” that he cessful James Bond mov- fice per year is a lot more