Can we use how Reit Manager Fees are structured to determine the Reit Perfomance?
By The Simplified Resource For Investing and Personal Finance  •  January 31, 2022
Some investors look at how the Reit managers are compensated to determine whether there is an alignment of interest. The logic is, if the interest is aligned, then the long run performance of the Reit should be better than if it wasn't. This makes sense. If investors feel the pain when their Reit's lose money, at the very least, the Reit managers should, rightly, also share in the misery. The opposite is also true, if investors make money, Reit manager should be rewarded. The management fees of Reit managers come in two components:
  • Base fee
  • Performance fee
Acquisition and disposal fees are largely similar across the Reits, 1%  of acquired property value and 0.5% of disposed property value. In my previous article, i found that the growth of DPU over time is the single most important metric to judge a Reit's performance as a growing DPU would naturally result in a growing Reit price too....
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By The Simplified Resource For Investing and Personal Finance

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