REITs are both blessed and cursed with the assets they hold.
If you think about it, REITs have to constantly worry about maintaining their distributions while being saddled with debt.
After all, the requirement for them to payout 90% of their earnings to enjoy tax benefits means they hardly retain any cash for growth.
Coupled with the fact that REITs are debt-heavy financial vehicles that are tethered to a menagerie of properties, and investors are not wrong to wonder how they can achieve growth over the long-term.
REITs have cleverly skirted these problems by growing in two main ways: organically, through asset enhancement initiatives or positive rental reversions; or acquisitively, through the purchase of higher-yielding assets.
The media normally goes into a frenzy whenever a REIT announces an eye-popping mega-deal involving millions or billions of dollars worth of properties.
Last year, a flurry of deals was made by several high-profile REITs....