Shocking as it may seem, REITs are up between 20 percent and 25 percent on average for 2000. Leo Wells III, president and founder of Wells Real Estate Funds, said this week that the regulations controlling REITs make them an outstanding investment from a cash flow perspective. In addition, REITs are required to distribute 95 percent of their earnings to investors. In most cases, this distribution comes in the form of dividends, which are paid to investors quarterly. Today that number is as low as 25 to 30 percent.
Many people have a lot of assets, but no money to spend.
Their investments grow in equity, but not in current income. Particularly in a volatile market, cash flow makes REITs very attractive. In addition, the slowing economy has little effect on REITs, he said. We specialize in office buildings leased to Fortune 500-type tenants. As long as the rent is coming in, the cash flow is going to investors.