Among 5 analysts covering Wheeler Real Estate Investment Trust (NASDAQ:WHLR), 3 have Buy rating, 0 Sell and 2 Hold. Therefore 60% are positive. Wheeler Real Estate Investment Trust has $13.0 highest and $2 lowest target. $7.63’s average target is 51.69% above currents $5.03 stock price. Wheeler Real Estate
What are real estate investment trusts (REITs)?
Publicly traded REITs (which are the ones I think you are referring to) are as the CFA curriculum shows – Tax-advantaged entities (companies or trusts) that own, operate and develop income-producing real estate property.
The different types of REITs include
1. Retail – They invest in shopping malls, shopping centres…
2. Office –
The advantages of REITs above other ways of investing in property are:
2. Low investment requirement
3. Rely in professional management
4. Taxation benefits
5. Earnings predictability
2. The fact that they are publicly traded adds volatility to the returns of the REITs
3. Due to the way that some of them are constituted they might be facing issues of conflict of interests (check what UPREIT and DOWNREIT structures are).
4. Low income growth potential due to the fact that REITs in order to enjoy the tax benefits need to distribute the income among the investors, so they cannot take into new projects without financing with debt or issuing more shares.
5. REITs might have to issue new shares at not the most interesting prices if their financial structure needs to be modified or if they need cash for a new investment project.
Remember that REITs are subject to the exact same regulatory, disclosure and financial reporting requirements as any other company that trades in the markets.
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OpSeeker – Contributing to Financial Literacy