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Why bricks 'n mortar investors are giving REITs a look

Investor Insights: Being a landlord may not be all its cracked up to be, say a growing number of investors looking at the diversification potential of real estate investment trusts. Jemima Codrington reports.


Video transcript below:

Jemima Codrington: From Loblaws to the Hudson’s Bay company, many companies are now offering REITS up to the public. So what’s in it for investors? We find out in this week’s episode of Investor Insight on Crew TV.

Many investors are exploring REITS as an alternative to conventional property investing. We caught up with some experts to find out what exactly is behind the appeal.

Cindy Wennerstrom, President, Oro Properties Inc.
Cindy Wennerstrom: I think REITs are appealing to investors in the current market because they are able to have a hold on real estate without being a landlord, without actually having to invest huge sums of money to purchase and renovate and rent and have a 3 o’clock in the morning phone call, give them a steady rate of return and a pretty good rate of return and you are not having to worry about market fluctuations with stocks and bonds in the market shares. So I like REITs for the purpose of solid investments over time.

Jemima Codrington: So what does REIT offer a portfolio that property doesn’t?

Marcel Greaux, Founder, Toronto Estate Club
Marcel Greaux: REITs offer a portfolio two main things in my opinion. The one thing is diversification. So in a REIT you can be diversified across you know multi unit, commercial, industrial, commercial office buildings, whereas with a regular portfolio it’s pretty tough to get into those market segments. The other thing a REIT offers is protection or shield from liability and debt. So you are not responsible or not on the hook for the covenant of mortgage. The one thing to be cognisance of though is the difference between and public versus privately REIT and invest in that field.



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