The Ignorant Investor
Ignorance Can't Stand in the Way of My OpinionFriday, May 23, 2008
Second Flashback to REITs
Back in January, IYR was at $60 or so. About 30% off its high but not yet dirt cheap. Today it's at $67.75 a share but still trading at the same yield and at the same P/E. It ran up to $70 between March 10 and May 19. Is this part of a long term trend upward or is it making another dive?
IYR includes holdings in commercial office space, malls, hotels. Most commercial leases include escalation clauses to protect against the effects of inflation, but revenue still depends on the state of the economy as a whole. Companies going out of business don't pay rent. Malls without customers can't pass a share of their profits to the landlords. It would be useful to look at the financial reports to see if revenues have held up during the first quarter.
IYR includes holdings in commercial office space, malls, hotels. Most commercial leases include escalation clauses to protect against the effects of inflation, but revenue still depends on the state of the economy as a whole. Companies going out of business don't pay rent. Malls without customers can't pass a share of their profits to the landlords. It would be useful to look at the financial reports to see if revenues have held up during the first quarter.
posted by Worker 17 # 2:57 PM 
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