3 Small Cap REITs Worth Watching

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Community contributor Preston Guyton writes about three small cap REITs, ‘dark horses’ to consider that others might be overlooking

Preston Guyton | August 14, 2018 | SmallCapPower: A Real Estate Investment Trust, or REIT, is a popular way to invest money in a place that can provide income over time. As with any investment vehicle, some may fly under the radar for one reason or another. Here are three small cap REIT ‘dark horses’ to consider that others might be overlooking.

CareTrust REIT, Inc. (NASDAQ:CTRE)

CareTrust is a spinoff of the Ensign Group and completed that separation in June 2014. It’s a very small REIT in the healthcare sector. It arguably has great underwriting, strong-performing properties, and quality leadership for a company this size. While one of its tenants recently had to transition some of its assets, hurting the REIT’s bottom line, the performance yield may still be strong enough to make it noteworthy.

Getting involved in a REIT of this type isn’t without risk, especially due to its small size and the fact that the impact of a single tenant’s difficulties could affect the overall value significantly. But with skilled nursing, senior housing, and multi-service properties such as hospitals and doctors’ offices, this particular REIT potentially has a lot to offer as it works on future growth. The most recent dividend Ex-Date was recorded June 28th at $0.205 with its previous on March 28th at 0.205.

City Office REIT, Inc. (NYSE:CIO)

Like apartment complexes, office buildings are big investments that can lead to strong dividend growth. With City Office (CIO), which came about a few years ago, investors get the opportunity to get involved with a REIT paying out and tightening up its valuation gap. When the Company first started, the dividends were low, and the share price dropped. Over time, it seems things have begun to turn around. The thinking behind this particular REIT is that the growth and diversification that’s taking place will help the share price catch up to the true value of the investment. The most recent dividend Ex-Date was recorded July 10th at $0.235 with its previous on April 10th at 0.235.

BSR Real Estate Investment Trust (TSX:HOM.U)

The early June IPO of this particular REIT got some attention, but not as much as some think it should have received. There are 48 apartment buildings with a total of nearly 10,000 apartments owned by this trust, and they are all found in the Southern US. The IPO price was $10, but this REIT is currently trading below that at around $9.10. The CEO own 51% of the REIT. Additionally, the properties are upgraded and it’s operating in markets where acquisition competition isn’t intense. The most recent dividend Ex-Date was recorded July 30th at $0.0417 with its previous on June 30th at 0.0591.

Preston Guyton is a native of the Grand Strand South Carolina and Broker in Charge/Managing Partner of CRG Companies.

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