Real estate and real estate investment trusts (REITs) have been big beneficiaries of investors’ search for yield since the Great Recession. Given that REITs are required to kick back much of their cash flow to investors as dividends, it’s not surprising they have attracted plenty of investor dollars. But even as money flowed into the sector, some REIT subsectors have done better than others.
Office REITs? Not so much.
It’s not that the owners have performed badly; it’s that they have been mostly ignored by the investing public in favor of faster-moving real estate offers. But for investors looking for value in the sector, the office REITs could still be some of the best bargains around. Performance and valuation metrics all point to rosier times ahead.
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