Hot REITs

This article is one in a sequence of articles that I refer to as “If I Had To Own Just One REIT” series. As you may recall, I recently wrote on the Healthcare REIT sector and I selected Ventas, Inc. (VTR) as my top pick. I summed up my BUY recommendation as follows,

In March, I wrote an article on Pebblebrook Hotel Trust (NYSE:PEB), and I suggested that "you should always buy Boardwalk, especially when the price is right."

Dividend increases are music to my ears. When done right (consistently and a positive real rate), dividends show that the REIT is performing and is confident in its ability to continue to generate positive FFO growth.

When I select REITs for the High Alpha REIT portfolio, I am essentially looking for companies that have the widest margin of safety, and that I believe have the best possibility for outsized share price appreciation. Sir John Templeton sums up the margin of safety as follows:

The U.S. government is the largest employer in the world and the largest office tenant in the U.S. Easterly Government Properties (NYSE:DEA) is the only internally managed REIT with a focus on investing in U.S. government-leased buildings. The other direct peer is Government Properties Income Trust