No. of Recommendations: 45
Hi, guys...I expect to be back on the Board on Sunday afternoon, but at the urging of YodaOrange, I wanted to post this regarding the new edition of "Investing in REITs" before that, in case any of you have questions. Thanks for your interest.

Some of you have asked me what’s different in the new 4th edition of “Investing in REITs,” and whether it’s worth buying the new edition. I cannot, of course, help you with the latter issue (the cost is approx $26 at Amazon), but here’s a summary of what’s new and different in the new 4th edition:

1. The entire point of view is different from prior editions. Although I am still very much a True Believer in the virtues of REIT investing for all investors – and REITs’ track record of performance is highlighted as in the past – the new edition is somewhat more critical, and makes it clearer that commercial real estate assets, as well as REIT shares, are quite cyclical. For example, the huge gyrations in cap rates and valuations of recent years are highlighted. Also, the use of debt leverage is discussed more frequently.

2. The book brings the REIT industry up to date, and of course includes a discussion of the Great Recession and Credit Crunch – and adds lessons learned therefrom.

3. The targeted audience for the new edition is no longer “mom and pop” investors, but rather do-it-yourself investors with some experience, commercial real estate investors and REIT organizations. That said, I continue to believe that investing based upon history is always dangerous, especially in this era of “new normal” markets, and thus I still do not include an abundance of graphs and charts of prior performance.

4. The chapter on REIT valuation has been changed significantly, and more discussion is addressed to the valuation of REIT stocks as an asset class. It has become more and more clear to me, with the passage of time, that any attempt to use any single formula that determines when REIT stocks are “cheap” or “expensive” is doomed to failure. Such is the nature of today’s investment world.

5. Discussions have been added on new sectors, i.e., student housing, lab space and data centers, and a new chapter, written by REIT industry veterans Ken Campbell and Steve Burton, on investing in REITs overseas is included. But, after much thought, I didn’t significantly expand the discussion on REIT preferreds, as that remains a very small backwater of the REIT industry.

6. Permit me also a generalization. I spent a lot more time revising the book this time than in any other prior revision of the book. In prior revisions, I was active professionally, and thus didn’t have a lot of time to wholly re-write major sections. This time, thinking that this could be my last revision, I wanted to “make it right,” and thus tried to make it, to borrow a phrase, “the best it can be.” I will, of course, be wrong in some of my forecasts, but I don’t think I would cringe if I read the entire book again, cover to cover, i.e., “Jeez, did I really say that?”

The book remains a tool for enabling investors to understand this wonderful but oft-confusing asset class, and not a guidebook on which REITs to buy. As wisely noted by that old proverb, “Give a man a fish, and you have fed him for today; teach a man to fish and you have fed him for a lifetime.” I hope that this new edition will teach a few investors to fish better.

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