"The big talk is REITs for the first time may be able to be entered in the S&P 500," Keira B. Moody, vice president of investor relations for Ft. Worth-based Crescent Real Estate Equities Co., tells GlobeSt.com. Once REITs start to be measured on earnings per share instead of FFO, they most likely will be folded into the S&P index, she explains.
Investors are drawn to REITs because of their higher dividend yield. Sure, there was a tumble in the past few weeks, but they're still bringing higher returns than other investment vehicles. That dip was just a market correction, says Moody. "From a fixed-income standpoint, the dividend on a REIT is very attractive," she says, acknowledging "we (REITs in general) are having a lot of issues right now."
By nature of their portfolios, REITs attract investment dollars due to the stability of their long-term leases, a tangible that's a priceless commodity in a topsy-turvy stock market. "There's a cash flow and it doesn't matter how many widgets we sell," Moody adds.
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