This is set up for those wanting to chat about Real Estate Investment Trusts (REITs).

Try to keep this chat line open for REIT discussions–only rule is to leave politics aside.

353 thoughts on “REIT Chat”

  1. For anyone that is new or “newer” to REIT preferred stocks, I would highly recommend reading a book called Cash is King – Investing in REIT Preferreds to Generate Long-Term Income by Simon Wadsworth. He was the long-term CFO of MAA and has a lot of experience in the area. I believe the book is out of print, but noticed this week there are a number of used copies for sale on Amazon for around $10 each.

  2. Any comments on use of the service Groundfloor ( as an alternative to REIT investing? Groundfloor provides a service to directly participate in real estate loans.

      1. Something to consider as mortgage rates increase and high construction costs exist. How quickly will new construction be sold as rates increase. I’m surprised there are several large construction projects of townhouses, condos and apartments going on simultaneously in my area. It will be interesting to see how quickly they will sell. Also house flippers are still active in the area.

    1. It’s a different type of investment. I’ll stick to what I know and have had success at.

    1. Another blow-up on a REIT buy recommendation for the high-yield touts on Seeking Alpha that “shall not be named”.

      LOL I just spit my coffee out. Thanks for the laugh but now I need to clean my keyboard!

  3. What’s next for downtown Chicago? Fewer people work in offices, some major retailers have closed their doors

    What’s next for downtown Chicago? Fewer people work in offices, some major retailers have closed their doors
    Freishtat, Sarah; Zumbach, Lauren.Chicago Tribune; Chicago, Ill.

    Long associated with gleaming office buildings, retail and throngs of workers and tourists, changes could be in store for downtown Chicago as it works to regain some of the bustle it lost during the COVID-19 pandemic.

    Empty offices and closed storefronts have put the vibrancy of downtown Chicago at stake. Almost 18% of downtown office space was vacant at the end of 2021, according to commercial real estate firm CBRE. The closure of major retailers along the Magnificent Mile, such as Macy’s and Gap, left massive holes in the city’s best-known shopping district.

    Office use and shopping habits were changing long before the pandemic, but were exacerbated by COVID-19 shutdowns. As the city tries to emerge from the pandemic, downtown faces myriad challenges: a changing office landscape in the Loop, a decline in retail activity along the Magnificent Mile, concerns about crime.

    Meeting those challenges could mean changes that reshape the face of downtown, according to real estate experts, researchers and neighborhood groups. Old office buildings could be converted into housing. Michigan Avenue is looking beyond retail to more experiential options. Local businesses might have more chances to expand downtown.

    In one sign of that change, Hubbard Street Dance Chicago recently moved into an old Adidas store on the fourth floor of Water Tower Place. Adidas is now located elsewhere in the mall.

    Hubbard Street Executive Director David McDermott sees the neighborhood’s boutiques, universities, hospitals, cultural institutions and nearby beach as anchors that will keep it durable.

    “I think we’ll continue to see a diversification of tenants along North Michigan Avenue,” he said. “And we’re happy to be kind of at the leading edge of that.”

    Getting there will require bringing people downtown. There were upticks in pedestrian traffic before the omicron wave, but with fewer office workers around and amid rising worries about crime, employers, store owners and landlords are eyeing creative options.

    A makeover for old offices

    Real estate experts and landlords aren’t worried about companies deserting the urban core, but as the need for office space changes, so does the outlook for downtown. Fulton Market, which at one point seemed overbuilt, is now in demand, thanks to its newer, amenity-heavy buildings, said CBRE Vice Chairman Todd Lippman. Dated buildings in the heart of the Loop, however, are struggling.

    “I see a lot of pressure on those buildings, and I don’t know that all will come out in good shape,” he said. “I do think there will be repurposing.”

    Office vacancy at the end of 2021 in the central business district, which includes the Loop, Fulton Market and River North areas, ticked slightly down for the first time during the pandemic, according to CBRE. More space was available to sublease than in either of the two prior years, but growth in sublease space was slowing, the firm said.

    Companies want space in new office buildings with plenty of amenities to entice workers back, such as cafes, entertainment spaces or fitness centers, said Jack O’Brien, principal of Chicago-based real estate services firm The Telos Group. While many renovations were underway before the pandemic, some were adjusted to emphasize outdoor environments. That includes the Old Post Office, where a roof deck got additional seating.

    For older, less desirable office buildings, conversions to housing could be a path forward.

    That is one option under consideration for a historic office building at 36 W. Randolph St.. With little space to add amenities and working around the building’s landmarked status, a conversion to small apartments, shared living or a hotel would be most efficient, said Steven DeGraff, who is part of the group that owns the building.

    The rent the building could generate from an office tenant wouldn’t justify the construction costs of retrofitting it, he said.

    “There is a lot of need for housing, and that continues,” DeGraff said. “And location-wise, you’re right in the central business district, (where) you don’t have a tremendous amount of apartments yet. So it’s really the market that dictates that.”

    A shift toward housing had started before the pandemic. The share of space in Chicago’s central business district devoted to offices shrank from 79% in 2011 to just under 75% earlier in 2021, while multifamily housing grew from 9% to 16%, according to CoStar data.

    Meanwhile, Chicago’s downtown grew faster than any of the country’s other large metro areas between 1980 and 2018, swelling from just over 18,000 residents to more than 110,000, according to a 2020 report by the Brookings Institution.

    With new housing comes demand for services for residents, such as day cares, schools and gyms. Those can also serve as new uses for old office buildings, said Tracy Loh, a fellow at the Brookings Institution who co-authored a report on downtowns’ recovery from the pandemic last year.

    The conversions come with caveats. Residential buildings are likely to generate less tax revenue than a commercial space would, Loh said. And construction could be challenging — for example, some old buildings lack bathrooms on each floor, said Michael Edwards, president and CEO of the Chicago Loop Alliance.

    Still, Edwards sees conversions as one viable option for downtown. The Loop Alliance is championing alternative funding, such as tax credits, to help make them successful.

    Opportunities for local shops

    As office tenants seek buildings with amenities, landlords have a big incentive to fill retail and restaurant vacancies left by the pandemic, especially when they’re trying to get workers excited about returning, said John Vance, principal at Stone Real Estate.

    There were 208 more empty storefronts in the Loop in mid-2021 than in 2019, a Stone Real Estate report found. Restaurants accounted for 44% of the newly empty space, and apparel stores made up 16%.

    That could give local businesses an opportunity to expand, just as small businesses expanded in the aftermath of the 2008 financial crisis when big chains were more cautious, said Greg Kirsch, executive managing director and Midwest retail leader for Cushman & Wakefield.

    “Money’s cheap, it’s easy to get a loan, and there are entrepreneurs who want to get out there,” he said.

    Willis Tower, where about 85% of office space is leased, was already planning to focus on “uniquely Chicago” businesses with a redevelopment that started in 2017 and added 300,000 square feet of retail space, along with other new amenities, said David Moore, senior vice president and portfolio director of building owner EQ Office.

    That included national brands such as Shake Shack, Sweetgreen and Starbucks, but also local names such as Rick Bayless’ Tortazo, Lettuce Entertain You’s Sushi-san, Do-Rite Donuts & Chicken and, soon, Kindling, a new restaurant from the Fifty/50 Restaurant Group. Much of the leasing took place pre-pandemic, but interest has remained throughout, he said.

    Fifty/50 had been in talks with Willis Tower’s owners about opening a breakfast spot in the skyscraper before the pandemic but conversations stalled until the fall of 2020, when the building owners reached back out with an opportunity for a full-service restaurant with an outdoor terrace, said co-owner Scott Weiner.

    Weiner thinks downtown building owners’ interest in local concepts predates the pandemic, pointing to food halls such as Revival, and said he thinks the neighborhood has “amazing opportunities,” even with uncertainty about how the pandemic will affect foot traffic.

    “Even when Willis is 20% occupied, it still has more people than most buildings in Chicago, and there’s a weekend crowd,” he said.

    Still, landlords and prospective retail or restaurant tenants may need to get creative as long as hybrid and remote work could affect the customer base, Vance said. That could mean basing rents on a percentage of a retailer’s sales instead of a flat rate, he said.

    Elsewhere in the Loop, Edwards thinks there is a future for retail that is heavy on the experience for shoppers. That could go hand in hand with a shift toward more residential buildings, because a growing population downtown would mean more residents nearby to patronize different kinds of stores, he said.

    “When we all used to work downtown, we’d all stay in our neighborhood because we were tired of going downtown,” Edwards said. “Well, now everyone is in their neighborhood, in their house, around their street, so downtown is becoming much more of a destination on a weekend.”

    One damper, though, has been the perception of crime downtown.

    In the first three weeks of the year, 600 complaints of crimes including burglaries, motor vehicle thefts and violent crimes were reported in the police districts that include downtown and other surrounding neighborhoods, according to preliminary Chicago police data. That was up from 412 in the first weeks of 2020.

    The Loop Alliance has long had safety patrols on State Street during the day and in recent months hired unarmed security to walk the area after 11 p.m. That was partly in response to complaints that restaurants and bars were having a hard time hiring employees who didn’t feel comfortable walking to or from work late at night, Edwards said.

    “Downtown cannot be successful until we can restore customer confidence in their experience when they come downtown, it can be predictable” he said. “And right now, it’s not as predictable as we’d like it to be, both on the pandemic side and on the consumer confidence side, feeling safe,” he said.

    A few blocks north along Michigan Avenue, addressing crime such as smash-and-grab robberies and carjackings are a key priority for the Magnificent Mile Association, said President and CEO Kimberly Bares. Many retailers in the area have hired private security, she said.

    A new special taxing district on properties in the area will send about 70% of the funds raised toward safety and security measures, such as “ambassadors” walking the avenue and surveillance cameras, she said.

    The association is also urging tougher prosecution and sentencing for repeat offenders, Bares said.

    Changes on the Mag Mile

    There were positive signs for North Michigan Avenue in December. Traffic counters in the 400 block recorded more pedestrians than in the same month pre-pandemic, according to the Magnificent Mile Association.

    But the high-end retail district is grappling with a shift in how people shop that was exacerbated by the pandemic, and has left large vacancies at the Water Tower Place mall and elsewhere along the street. A panel organized by the Urban Land Institute, working with the city and the Magnificent Mile Association, set out to study solutions for the corridor.

    “Shopping and retail has changed,” said Swasti Shah, director of community engagement for ULI Chicago. “It cannot be just relying on big retail brands and flagship stores.”

    Among the panel’s recommendations were to create more places for people to gather and a focus on experiences, such as the Dr. Seuss Experience at Water Tower Place or The Office Experience at the Shops at North Bridge. Walkability to tourist destinations such as Navy Pier could be improved. Focusing on local retailers could give people a reason to visit, Shah said.

    ULI is also convening a panel to study LaSalle Street in the Loop.

    Retail will likely always have some presence on Michigan Avenue, Bares said, but experiences could also be part of the avenue’s future. In addition to pop-ups, including The Office and Dr. Seuss experiences, she pointed to existing stores such as Eataly or the Starbucks Roastery that feature dining.

    The Magnificent Mile Association is also looking at more festivals and events, such as the Meet Me On the Mile events in 2021 that closed parts of the street to vehicle traffic.

    “In an era where we can buy almost anything we want online, what we can’t buy online is experience,” Bares said. “And to the extent that anyone can match the best product or service with experience, they will be the winner in this new market.”

    That shift in focus is in line with Hubbard Street Dance’s recent move to Water Tower.

    McDermott said he approached Water Tower’s owner about moving into the space after the dance studio sold its building in 2019. He was drawn to the site after seeing other “experiential” and arts-focused tenants nearby, and to the mall’s accessibility to the public, he said.

    “How can we share Hubbard Street with more people, share world-class art with more people?” he said. “I don’t think about it really as a mall. I just think about it as a place to showcase our art.”

  4. There have been some interesting articles on SA recently regarding GEO Group and CoreCivic news and analysis. GEO Group bonds have been a good investment for me both with capital gains and constant dividend payments. I sold CoreCivic but need to reevaluate.

    1. I held both for long time but got out of GEO last year, now Corecivic is one of my larger positions. I liked when they became a C corp to eliminate the forced dividend and based on their cash flow will have no trouble with the debt maturities in coming years. I wouldn’t buy the stock in either but felt more comfortable with the Corecivic bonds.

  5. I tell you, It’s tough out there.
    How tough you ask?
    Tough enough that I had to be the Bid and Ask on CLDT-A today.
    But, I scored. As someone ate up my 26.59 offer.
    I am only 20% invested right now.
    I Did buy 10k of iBonds last week.
    A happy belated New Years to you all.

    1. Newman, one of the stranger issues of the day. After you sold, it traded up to an all time high of 27.10. Why a lodging REIT preferred would trade at an all time high in a Covid world is a mystery to me. . .

      1. I think a ETF or Fund bought the issue at high price points.
        On their list, it will appear as 8,000 shares of CLDT-A with a coupon of 6.625%
        Anyone who reads that will think, Good Catch!, but, the yield to call is less than 5.5% at 27.00
        I have been loading up on PSEC-A recently.
        My holdings are
        Qrtep, Abr-d, Oxlcm, Psec-a
        Ep-c, Nrz-b, Eccx and finally 200 shares of KTBA

    2. Newman – So 20% invested implies you’re 80% in cash losing 7% of purchasing power annually as it stands right now…. What are you doing with what constitutes your 80% uninvested funds???? Are you content to just wait it out for better opportunities??? Not being critical as I too carry high cash reserves, but nowhere near yours, so just wonderin’.

      1. 2WR, Been busy.
        Yes, I know what I am losing by being in cash. Thanks for the reminder.
        But Capital preervation, yes I can lose my “s” .
        But, the market is finally coming to us.
        I will be loading up on 5.5-6% IG issues soon enough.
        Inflation, eventually turns to a recession, so 6% yield, will be adequate, I hope.
        Still working at 70, so income stream is still strong.
        If you have ideas, don’t be shy about posting them.

      2. He’s breaking even while all of us are losing money. Buy back in cheaper for a net profit. Or is it a net non-loss?

  6. Not sure if anyone was looking today, but bought 200 shares of UBP-H today around $25.51. They are callable next September, but currently trade with about .13 cents of accrued dividends. So backing off the accrued, think I got them around $25.38 with my quick math gives them about a 5% YTC. Certainly not a home-run, but a decent 5% hold in my IRA account.
    They are thinly traded at times, but think it was a good day to purchase 200 shares. Happy investing to all.

    1. KL – Assuming QOL’s description is right, I think your math is off…. last coupon payment was 10/31 so there’s only 7.38¢ of accrued I think… and with call being 9/18/22, at 25.436 backing out accrued, I’m coming up with 4.11% YTC… to be honest, my calc feels a little chintzy but I did do it twice and that’s what the Fidelity bond calculator comes up with..

      1. Right. And there are a lot of places to put 4% yielding money to work… but that is not enough for the risk of a NY based small cap reit for me.

      2. 2wr – very possible my math was off today, as I did a quick calculation on the numbers. Thanks so much for correcting me and my error, much appreciated.

        Greatly appreciate the correction, as I had to make a 5 minute decision. Still maybe a good coupon rate for me and thanks so much for the clarification. Much appreciated!

    2. Fellow Shareholder,
      I own the H and K issues. I agree with you that the H is likely to be called in September. I have owned their other preferreds which have all been called. I like Urstadt Biddle. They own the shopping center in my town which is anchored by a large grocery store.

      You mentioned MNR-C in a post awhile back. I had then 400 shares and you got me thinking so I added another 500. Do you have any ideas for replacing them?

      Back in December I started buying PDI, a PIMCO CEF. I have had PDI and other PIMCO CEFs for years. You might want to consider a small position to see if PDI meets your requirements. A poster on another forum said “every month a train pulls into your station and drops off a lot of money”.


      Dry Fly

  7. FPI and LAND both up 5%-ish today on no news– at least, no news that I can find. Sector rotation into agriculture?

    1. With FPI there’s probably still some noise going on from the effects of the FPI-B conversion, but taking LAND as the cleaner example, in a way, they’re just playing a little catch-up plus because it (as well as FPI) was inexplicably down 3% -ish on Friday……. For whatever reason they’re doing what they’re doing now, I’ll take it….. ha

  8. well, someone is not going to have a happy holiday season if this gets signed into law….
    SEC. 138144.

    Is there any REIT left that is a prison operator?

      1. GEO has done well for me. Current annualized yields based on my last dividends are 10%, 12+% and 13+% depending on bond. My returns are better since I purchased at lower prices. There is political football with private prisons. Democrats want to get rid of them while Republicans seem to be OK with them. GEO also have some international presence. There is a good recent analysis on SA. GEOs last dividend on common stock was Jan 2021. They stopped paying to pay down dept and other uses. That is not good for common holders but good for bond holders. They have bonds maturing 4/23, 10/24 and 4/26.
        CXW has also suspended dividend on common stock. I sold their bond in May.

    1. I know touching on this topic seems inflammatory and political, but by direct logic there are some organs of society that should NOT be privatized because it inhibits possible scrutiny and reform due to special interest and entrenchment of dogmatic social laissez-faire.
      Reagan Era policy and mythos may be entrenched but allowed cancellation if necessary.
      There is room for morality and ethics in government, Wall Street and personal decision. It just takes tougher choices and policy. There are many areas to consider!

  9. Anyone wondering re NLY-G’s (6.5%) sudden drop over past 4-5 days? Catching up to NLY-I maybe… G has another 1.5 years to go before floating at ~4.2% but too soon for that taper. No news on parent NLY.

    1. Someone has been selling higher quality MREITs which trade at a premium. Look at NLY-I and AGNCO. Good buying opportunities.

      1. They were overpriced. Now they’re back to reality. Don’t know if it’s a buying opportunity or not. I bought some NLY-F on the drop but not G.. Swapped some AGNCM for AGNCO, didnt add any.

        1. In this environment, I’d call AGNCO solid. A few years left of 6.5% yield then floating at 5%+ is pretty good for money good mREIT. Over 5x coverage to common and think they are 100% agency. But I agree shares can be volatile..

  10. Bpypn had a nice gain today, but Bpypm still looks better-higher rate, longer call. Am I missing something? Time to swap I think.

  11. Not sure if anyone is looking at UBP-K today, but I have been picking up shares over the course of the day. They were trading in the $26.50 range just five days ago, but can be bought this afternoon at $25.93. They go ex-dividend on 10/14, which is only a little more than a week from now. Not callable until 10/2024, so there is three years of call protection.

    My quick calculation math shows a Yield to Call of about 5.12%. Certainly nothing great, but I have some additional funds to work with this month. The original coupon rate on the security is 5.875%. The UBP-H at $25.66 looks interesting as well, considering it goes ex-dividend on 10/14 too. It is callable on 09/18/2022, but my quick math this afternoon shows a Yield to Call on that issue at a little over 5%. Not too bad if the security is called next September. The coupon rate on the H shares is 6.25%, so there is a decent chance it could be called.

    Once again, nothing real exciting here – but I’m tired of sitting with some funds in cash and won’t be a buyer of any of the new issues with the ultra-low coupon rates such as the VNO-O 4.45% series.

  12. ABR-D is a 6.375 Yielder.
    The last ex-div date was 7-14-21. It makes sense if the next ex-div date is 10-14. Well it’s offered for sale at 25.43 and the dividend should be .3985.
    That would make it a 25.03 entry.
    Is it a value here?

    1. I would but I already have a very hefty load of ABR-E.
      Your CLDT-A suggestion earlier this week (Tues) was a beaut. Bought it, captured the div and sold the next day for a small gain.
      The price recovered the entire div almost as soon as the market opened the next day.

      1. Re: xCalBear,
        Glad you did well with CLDT-A
        I’m still holding 1684 shares of it.
        I do expect this to get back to 26 in a few weeks.
        As for ABR D/E
        I own 1500 shares of D
        Once Ex-Div date is met, I make $599
        Then when no one is looking, I swap D with E.
        Good hunting, oops you’re a bear.

    2. Thank you for the reminder. I just added. Abr did well during covid. I sold their common way too early but I will hold their new preferred.

    3. Dividends were just declared

      UNIONDALE, N.Y., Oct. 01, 2021 (GLOBE NEWSWIRE) — Arbor Realty Trust, Inc. (NYSE: ABR), today announced that its Board of Directors has declared cash dividends on the Company’s Series D and Series E cumulative redeemable preferred stock of $0.3984375 and $0.34288 per share, respectively. The Series D preferred stock dividend reflects accrued dividends from July 30, 2021 through October 29, 2021. The Series E preferred stock dividend reflects accrued dividends from August 11, 2021 (the date of issuance) through October 29, 2021. The dividends are payable on November 1, 2021 to preferred stockholders of record on October 15, 2021.

  13. Anyone know a lot about INVH?
    They are a REIT that owns more single family housing than anyone in the country, and the stock is trading near all time highs.
    They just did another offering of shares a week ago, and this screams to me that they are striking while the iron is hot, because I would not want to be in residential real estate right now, it seems like that market is primed for a crash in the very overheated markets, which is where they seem to be concentrated.

    1. Wonder if the failure of the deal will disappoint some MNR-C holders, who might dump it.

      I entered a bid at par in the event this might happen.

      1. Both the common and the preferred ended higher on the day after the news broke of the vote failing to approve the merger (on the MNR side only). Interesting bet, though, and I hope you snatch some up on a big sell-off but this puppy has been so stubborn and sticking very close to ‘trading flat’, so to speak.

        I still think we’ve not heard the last from Zell. He knows how to play the game, will collect the breakup fees and I think wait a bit, maybe coming back to the table should the market brush or slam into the rocks. Until then, I look forward to continuing to collect those divvies.

        1. What about Starwood? Now the massive breakup fees will not have to be paid (just $10 mil), so that translates to increased price for shareholders should they come back with their last proposal. Should they do come back, there’s no plan included for the fate of MNR-C.

  14. Nice upgrade from Wedbush this morning on UMH. Price target set at ~17.63% higher than last trade on the common. They also received 2 awards, recently – and also surpassed $1B in market cap. Both preferreds trading above $26. Glad to see these guys getting some love as well with institutional ownership ~63%. I know some of us here were buying these pfd’s hand over fist in the depths, last year.

  15. Well, I have not had a gain in these IPO’s the last 2 weeks.
    It used to be as right as rain. Regular profits were the norm.
    I see the TNX climbing steadily but it’s not the main reason.
    My guess is Delta Variant contagion. One extended family member and one client of mine died from Covid this week.
    It’s the main conversation in Florida. We have fewer reasons to dine out like we did in May and June. Travel plans are cancelled. I guess hotels are not the place to be invested in as of now.
    Is this a new direction, or is it just a minor pullback?

    1. In my corner of florida there is no new panic yet. I hear more about it from the national news and out-of-towners.
      My preferreds have been slowly creeping down lately, probably because they were overheated with exuberance. If that trend continues it will eventually be reflected in IPO pricing.

      1. Martin G,
        Even today my REIT IPOS are still down.
        Watching HYG for clues. Today is a Dead Cat Bounce. (Sorry PETA)
        Let’s see what Thursday and Friday look like before I do something rash..
        If there’s one thing I learnt about the market, it’s that there are more opportunities waiting.
        Today’s good news is that the lawn man finally got around to the Jungle in my backyard.

        1. Whether they go up or down my main strategy doesn’t change. Trade between divergently priced issues. Just takes longer to notice the profits in a down market.

  16. Wow. Going to miss the monthly dividend payments on this underfollowed industrial REIT.

    Blackstone REIT to buy WPT Industrial REIT in a deal valued at $1.3 billion in cash

    • WPT Industrial Real Estate Investment Trust (OTCQX:WPTIF) and Blackstone Real Estate Income Trust (BREIT) inks an agreement under which BREIT will acquire all outstanding units of WPT for $22.00/Unit, including the debt (about $1.3B).
    • The Transaction price represents a 17.1% premium to the closing price of the Units on the TSX on August 6, 2021.
    • Net Asset Value per Unit estimate for WPT of $16.66/Unit.
    • The Transaction is expected to close in Q4’21.
    • “The Board of Trustees of WPT has unanimously determined that the

    Transaction is in the best interests of WPT and WPT unitholders and fair to WPT unitholders.”

    If called at the earliest, the yields are
    Cldt-A (26.80)5.18%
    Peb-P (25.34)5.42%
    Are those the typical yields we can now expect from Reits?

    1. You can get 6.15% from the very leveraged BRG by locking your funds up for four years in a nontradeable issue at Yow.

  18. Anyone here been able to purchase the new Gladstone Land 6% Series C through their broker?

    I tried fixed income desks at Vgd, E*, and TDA. No luck.

  19. Wheeler prospectus wording for 7% pik notes. Any help on the 45% discount? Would they basically pay 3.2% interest ( 45% of the 7% interest) reguardless of the share price? “Interest on the Notes will be payable, at our election, in cash, in shares of our 9% Series B Convertible Preferred Stock (the “Series B Preferred Stock”) based on the Fair Market Value of a share of Series B Preferred Stock (using a trailing average 15-day Volume Weighted Average Closing Price (“15-day VWAP”)), less a 45% discount per share, in an amount equal to the applicable amount of interest for the interest period (rounded up to the nearest whole dollar), or in shares of our 8.75% Series D Cumulative Convertible Preferred Stock (the “Series D Preferred Stock”) based on the Fair Market Value of a share of Series D Preferred Stock (using a trailing average 15-day VWAP), less a 45% discount per share, in an amount equal to the applicable amount of interest for the interest period (rounded up to the nearest whole dollar).”

  20. Classic Brookfield …..

    BAM likes to buy strong assets from distressed sellers or at least when the assets are out of favor. The actual buyer will be a private partnership managed by BAM (BAM has many of them) so you can’t invest in it directly. But the way to benefit from all things Brookfield is to buy the parent, BAM on the NYSE.

    BAM has its own businesses, plus it earns management fees on all the businesses in which it has an interest, public and private, or manages. A lot of money funnels into BAM.

    $10,000 invested in BAM in 2000 would have you with almost $900,000 today. Almost 6 times what an investment in SPY would have done and almost 4 times QQQ. All assume reinvested dividends and ignore taxes.

  21. MNR-C is selling at 25.44 with Ex-Div tomorrow of .3828.
    The way these Preferreds are trading, it may be a good buy.
    It’s callable on 9-15-21. If called, you bank another .3828

    That’s .32 cents for holding 125 days.

    1. Newman- Good eye. 99.9% chance MNR-C is called because of merger. One of the benefits listed by acquirer was calling the preferred to reduce the dividend “expense”. I wouldn’t be surprised to see the price go back up in a few days because people don’t know what they are doing so you might get your 125 day return in 1 week. I was maxed out in this issue but will be watching to sell.

  22. WRI getting bought out 1.408 newly issued shares of Kimco common stock plus $2.89 in cash. Don’t believe the 30+ headline. WRI holders will be trading in for a lower yield.

      1. That’s why I left this comment at SA (and it got posted!):

        Today, 1:32 PM
        Comments (455)
        @robkrow I’m using my WPG and NGL dividends to buy GEO. I’m expecting my dividends to double.

    1. This makes sense after what CXW did.. I am glad because I own the 2023 GEO bonds at 87 avg cost and they popped today to 93.. they had redeemed the 2022’s w a new 2026 conv issue and the div elim and other plans should make the 2023’s their next target w their debt reduction goals.
      Had a similar nice gain in CXW bonds which I sold on their big bounce from 91 to 98. The 2023’s have a ytc of about 9% now and just paid a coupon 4/1. If they trade up to 95ish I will sell as I don’t play much in junk bonds in retirement except as here- a special situation. Bea

    2. GEO is late to this one. CXW did this some months ago. Both really had no choice given the target on their backs.

      CXW is a much better run company. I bought CXW debt and sold puts when they plunged late last year. I would not touch GEO at any level.

      1. I got GEO’d today.

        I bought some earlier in the year when it hit the 52 wk low. I sold the lot at a small profit after the dividend and started buying back under the new 52 wk low. My position is very small at a whopping $314. I try to average into a position, so I was waiting for more weakness to buy a nibble.

        As long as they don’t go banko, I’ll hang in there for now. I was really on a roll this year and knew Mr. Market would be handing me a turd sandwich soon. It is a good reminder to play it safe. We are in nosebleed territory and there are many more GEO’s out there and worse.

      2. people touch a lot of things on III that I would not touch either..but they are ok trades. Bea

  23. Hey hey hey, it’s Hersha

    HT-D and HT-E dividends hit my account today.

    Now if my Arkansas Razorbacks can make it to the Final Four.


    1. And you get another one soon. The ex date for the normal div is 4/1 payable on 4/15. I went in a little heavy expecting this bump, so I guess I will lighten up after the 1st.

  24. Mixed bag of recent office REIT news. The bad – Mack-Cali CLI continues suspending its dividend for 2021. Not one that I follow anymore, but I understand that CLI is a bit of a hybrid, office and resi. (Not a blue chip like its glory days, and, like the on-the-skids singer in “Tender Mercies”, getting asked questions like “Hey mister, wasn’t you Mac Sledge once?”)

    The good – Columbia Property Trust CXP got a bid from an activist group. I am not familiar with CXP, but I have a small position in another office REIT that I hope will get a bump from this type of post-pandemic euphoric bargain hunting.

    The uncertain – There is considerable chatter about office values falling in the aftermath of the work-at-home world. There is also reportedly quite a bit of space up for sublease.

    Reduced values affect the ability to re-finance and can squeeze out over-leveraged owners. The predictions are schizophrenic. Sample headlines – NYC office values could fall 30%. NYC office market recovering. Take your pick. “Sing it the way you feel it.” — Mac Sledge.

    Just my opinion.

  25. CORR-A has dropped less than I would have expected. Management certainly hasn’t demonstrated too much acumen, but is there actually some margin of safety in the preferred that I am missing?

  26. Boston Properties has announced that it will redeem BXP-B, an excellent preferred stock, on 4-1-21.

    Hate to lose this one.

    1. Ugh. Saw it dipped below liq pref last Friday, picked up a few shares. Knew the risk but still. Well, I’ll make a $0.02 profit, woo hoo!

      I bought well past ex-div. That means I’ll miss any divs paid at redemption, correct?

  27. Cedar Realty CDR “In the second half of 2019, our Board formed a special committee to commence a strategic review process and was actively exploring a sale of the Company at a price of approximately $25 per share (adjusted for the Company’s recent reverse stock split). This strategic review process, in which certain Camac Partners’ director nominees participated directly and of which others were aware, was disrupted due to the outbreak of the COVID-19 pandemic.” CAMAC is genius (well easy when you had insider information), buy it for $1 during bad times knowing this was going to be an outcome they were open to.

    1. Dufus – the CDR story is a very long one, but also a little tragic. Long-term holder of the preferred shares, but Bruce was probably not the best CEO over the past number of years. He took over the company when shares were selling at close to $8 and now claims they could have sold the company for $25 per share, but the price adjusted split is closer to $3.78 per share considering the reverse split. So Bruce took a real estate company selling for $8 and now wanted to sell out for less than $4 per share if my math is correct. Not good work, considering inflation. Bought about 2,500 shares when prices were selling so much lower this past year, but just tempted to sell out later this week and look into better opportunities.

    1. BillW- NNN-F is my largest position. Totally agree it should be called in Oct.I owned it for a long time then sold when YTC was almost 0% and have been buying a lot over the past few months at 3-4+% ytc. Nice place to park cash at right price.

    2. If one only looks at the baby bond/preferred market, one would think that a 5.20% coupon is not sufficient enough cushion to be totally comfortable with the idea that a call in October is a slam dunk certainty… However, as your link demonstrates, there’s a relatively large gap now between the institutional market as defined by issues of 1k denominations and baby bonds and their $25 denoms.. This is not going unnoticed by traditional baby bond issuers, most notably BDC and REIT issuers, and $25 issues are being replaced by institutional money instead of reissuance of new $25’ers…. This is a potential avenue we’ll see more of imho as long as this large disparity continues… I know it’s been mentioned recently by a few other issuers including MNR for its MNR-C which is higher coupon/lesser credit comparable to NNN-F and it’s call date would be 9/15.

  28. Anyone have any thoughts on EQC’s preferred issue? Not callable unless the company is liquidated with a current 5.43% yield. Sam Zell REIT with a large net cash position.

    1. ddy:

      EQC – Even with owning only 4 buildings now comprising 1.5 million square feet, EQC is still generating about $3 million in cash flow each quarter. But they are now only getting 30 basis points on their $3 Billion in cash, so interest income has plummeted.

      How much longer can they truly justify $7+ million in quarterly G&A expense? They have gone years without making a deal with all their cash – will they ever?

      Or will management just keep bleeding the company quarter after quarter with their large corporate overhead expenses?

      At some point they should just liquidate and return money to shareholders – correct? One would have to be insane now to be buying their preferred shares at $30+/share, when you would only receive $25 in a liquidation.

      That is called return-free risk.

      1. All very valid points. But in my experience, people like Zell don’t let go of a captive pool of capital. I don’t think he will ever liquidate it and just give the money back. He fell into that situation with luck and will eventually do something with the money even if it’s just an average deal. Why let it go when you can do just an average deal and pay yourself and your team with salary, bonus, stock options. In the meantime, the office buildings pay for the G&A, so there is no cash burn/permanent impairment of value. In full disclosure, however, my cost basis is below $25/share.

        1. As expected, Zell not letting go of his free pool of capital. EQC buying MNR. The odds of EQC preferred being redeemed were nil before, and now I figure the odds are 0.00%. EQC preferred’s position in the capital stack is even better, post-merger, and as long as Zell does not over lever NewCo (highly unlikely), the preferred’s should hold their value, imho, barring rate spikes.

  29. Picked up PSA-G and NNN-F today. 4.5% ytw for both of these IG reit preferreds. Fun to look at the “sortable sheet again”.

  30. How do you know when it’s all about selling the service:

    Comment from ron3637:

    This is a dangerous article. Look in the comments and you will see author notes that at the current price these are mostly over valued. No emphasis on is placed on this in the write up. Buy high sell low is what this article should be captioned with.

    And the reply from Brad Thomas:

    @ron3637 Come visit iREIT on Alpha and get all of our “buy below” targets for over 150 stocks… All the best

    Put another way, if you want our real advice pay up.

    1. Bob you will like this then. An old friend called today and said he learned about an investment service firm out of Bahamas where they are making 800% returns.
      He was wanting to know if I had heard of them. Obviously I hadnt as I already forgot the name. But he was thinking if he could get 500% or so he would be happy with that if he followed them a bit.
      I was kinda speechless so I didnt know what to say, as he really knows nothing about the market. He is retired and has plenty of money to live off but knows nothing about the market.I hope he doesnt play too seriously with this. Heck even HDO doesnt promote 800% returns, ha.

      1. Makes HDO look like honest citizens. Just cracking me up their promotion of 25% yielding WPG a month before the company missed an interest payment on a $750 million note issue. And your buddy pendy is still out there defending the recommendation.

        1. Ha, yes I have been reading. And I have been proud of you, Bob. You were jumping into the pillow fight and slapping him around a bit!

    2. 100% agree. All may be good companies, but in this market valuation is everything – particularly if you are going to hold “for generations”.

      I read a number of the SA authors but I always consider that the article was probably issued a week or two prior to those that pay for it. I’m OK with that relationship frankly – I get value for what I pay (nothing).

      1. billw – I can give you a list of good companies as long as my arm. It’s easy. But the question is should you buy them now? At present prices? In equities entry point is the major determinant of returns in most cases.

        1. True Bob. The SA stuff is just a data point to me. – I’ll take it for the price I pay.

          The answers to “should I buy them now” and “at present prices” I definitely do not use SA for.

          1. I posted a comment that didn’t get published. To paraphrase myself, HASI was a great buy at 20-30, where it was earlier in the year. At 60-70, are you really recommending the stock? I really don’t want to own a company at 2-3% CAGR just because it’s a great company.

            It’s on my list to look at during the next crash.

    3. Bob – I rarely comment here now, but saw your post this evening. As of today, BT has posted 20 articles already this month and we are on February 20th. Heck, I’ve been looking around the market for the past few months and have only a few stocks that are below my purchase price target, so real slim pickings right now. Here is a quote from his article:

      “As CEO of the to-be-formed Thomas Family Office, real estate will definitely be a major asset class held. That includes both private holdings and real estate investment trusts (REITs).”

      I’m not sure of the background on some of the SA authors, but if they were really experts in their field, just not sure why they post daily articles on SA for about $35 each – and maybe much less now that the policies have been changed? Buyers beware on SA! He does claim to have an office in Florida now, but certainly would be nice if he provided the location and if he was taking “walk-in” clients for advice.

      1. You’re breaking me up, Lou.

        I will be looking for the 13-F filings for the new Thomas family Office.

      2. kaptain, formed my opinion about BT a long time ago. He is no Ernie Pierson (Eureka ) or Hugh Codding ( Santa Rosa ) or maybe Saul.
        Codding built shopping centers and surrounded them with rental and residential housing along with being near county government buildings. They sold several of the shopping centers to Simon Group. They kept all the surrounding real estate.
        What you need in reits is old school developers like these guys

    4. I signed up for the free 14 day trial and dropped it in the first 30 minutes after searching for some useful info. My best bet he is a failed real estate investor/developer who has tried to reinvent himself a few times. Here is his bio

    5. He is an elite, who recently stated if you don’t go to college, you ‘ain’t nothin’.’
      I commented that he ought to talk to Bill Gates and to Steve Jobs’ spirit, since neither finished college. Just wonder what he does when he needs a plumber, an auto repair technician, an electrician, a contractor , etc. – guess he does everything himself, because he went to college.

  31. Looked at the III website today and just reviewed some of the comments this evening – and certainly know I won’t be back anytime soon. You just have to love 15+ comments on stocks that are traded once a year. Or, are never traded at all.

    Today my family members picked up more shares of BFS-E and will continue to buy holdings in the company. The Saul family has very large holdings and the company is very well run. Also, more shares of a small community bank that yields over 6% and reported fantastic numbers this week.

    Wishing everyone the best in 2021!

    1. I am truly a sucker for M&M’s and Reeses Peanut Butter cups. As soon as my wife puts them out, I will always be back to the kitchen counter. Every time, I keep telling her (after I grab a handful by the way), that I won’t be back for them, but… she knows me to well. She just winks, and probably whispers to herself that I will be back.

      The illiquids are not very useful, … well, until they are. The illiquids are tough to buy and are easier to sell. Many of the investors in this space stuff them in the sock drawers and mattresses, and continue to look for more to stuff in there. Many stocks are hard to sell during a selloff. Why, because everyone else is selling as well. During April sell off, I took a chunk of them (which sold off about 1 div payment), and turned around and bought what I had on one of my lists, called the “high flyers”. This list are the ones that normally trade 8-12% above par price. Take NEE-N for example. Would I normally buy it? No. Would I buy it at par or at $24? Yes. This is one of the many stocks that I bought with my illiquids and ones pinned at par and I have sold them back to folks that would rather pay $28 for it. The fun part will be paying Uncle Sam for the gains.

      1. Awwwwwwwww, poor Mr. C… A friend of mine calls the type of problem you’re facing having to pay Uncle Sam, a “mink coat problem.” Of course today, that invokes animal rights issues so the term should probably be changed to something just as extravagant but not as PC tinged, but the point’s the same – Which mink coat should I wear when I go to the bank? Oh the problems we here are all so fortunate to have to deal with…lol

        1. You are right 2WR. I wanted a lake home on the lake, and my wife wanted a mink coat. Who won out on that one? … We moved in a couple months ago, and am sitting in my new office looking at the lake right now :-).

          New investments with low rates are poor… but anyone looking to refi or buy, it is a great time. The jumbo mortgage was dirt cheap.

          1. Ha, Mr. C… We just completed a re-fi a few months ago at 2.25% 15 year and now, sitting here over looking Chickamauga Lake, aka The Tennessee River, with far too much cash and investment rates so low, I’m wondering if I shouldn’t just pay it off – either that or put it all in GME….. oh and just for the record, I don’t think they sell mink coats on QVC otherwise, one of us in this household would already have one….

            1. 2WR “Chickamauga Lake Wow?” I never fished there but saw the lake signs many times over the years, as I fished up and down those TVA lakes from Kentucky Lake in Kentucky to Lake Lanier in Georgia, since the 1970’s. Beautiful country and wonderful memories. Those big spotted bass and small mouth should start biting any time now? Wish it was 25 years ago, and I was hooking up the boat trailer. Thanks for helping me remember those days.


            2. I live on Lake Wobegon. We’re all above average there.

              There’s a long waiting list, but you could go ahead and apply. You never know.


              1. Cam, never heard of lake Wobegon before but checked it out. I’m sure my dad now resides there, lost him in 2012. Another great memory on this memorial day. Thanks

          2. Good for you enjoy your new home. We have a timeshare on a beautiful lake in Va. we go every year and really enjoy it. New to this site and a little leary of buying more reits now just looking for a bargain or something good to invest in. Have some in vng and looking at frt . I like apts but not a big deal . Lately been buying into cef’s , have several power co’s. duk and dom like so decided to build my portfolio . Have Maa.PR.I and like it had for a long time ok stock..
            saw you buying a home on the lake and had to reply. again enjoy… Scott

      2. Yes Mr C, I dont even bother to say it as I know no matter what I will always come back to the cookie jar. I asked my level headed girl friend and she agrees with me.

  32. Colorado Wealth Management Fund’s contributions on SA all seem to be well-researched and level-headed.

    Does anyone here actually subscribe to their service (or know someone who does)?

    1. CWFM is the only contributor on SA I read regularly. I don’t subscribe because of the high price and because I do my own legwork. If I were too busy or uninterested that would be the one service I would buy. He matches my trading style and is very good.

    2. Bur Davis- I was getting useful info from CWM free articles so decided to Join when HOYA joined their group. The Hoya free info was/is pretty good. I signed up for the trial last month and dropped it in 24 hours. Could find zero value in the paid sub. Chat/forum was useless, their data was not good (Tim’s is a lot better here). Also, as a side note I realized the CWM doesn’t even identify himself and couldn’t find any info. Also the 2nd guy who does the BDC info claims to be a CPA and CFP but could not find anyone matching his name to those designations (I might have missed it). They give you the good stuff for free.

  33. MNR had news yesterday. They will form a group to decide when to sell the corp.
    SPLP had major insider buys yesterday on its common and only preferred issue.
    SPLPPRA is only at 20.50 but it’s a K1 issuer.
    I own MNR common and I will buy SPLP common when there’s a pullback, if any.
    SPLP has a beautiful cup formation and the handle may reach a few points higher.

    1. Newman, what’s your take on this news? Chest-beating so as to be seen to be doing something in response to Blackwells’ $18/share offer?

      1. I sold all my MNR at 17.45-17.50 Friday.
        I hope I can rebuy them if there is retracement.
        I think MNR will be sold. The price, who knows?
        But 18 sounds fine, but what if there is a bidding war?
        40% of the company is owned by 3 firms.
        They want the Landy family out. The Landy family will want more money for the company if they will be ousted.
        I thought about options buying, but haven’t pulled the trigger.

        Good luck.

    2. Newman – is there any known or rumored reason why you are tying these two things and two companies together? I know of many Allstate tv ads with beautiful cup formations too.. lol

      1. I have to admit, I was ignoring the reference to SPLP. I was asking about the MNR news only because I own some MNR-C.

        1. Bur Davis, Sorry about that.
          SPLP-A has a partial redemption due in 3 weeks.
          It also had major (qualifying) Insider Buys which almost always is a positive outlook for the company
          It did not belong in the REIT CHAT room.
          As for MNR-C, I have been overweight on this and assume it will be called in September. At worst , it’s a great alternative to money markets. At best, It has more life.

          1. Newman, I was familiar with the one partial redemption a year or so ago that was baked into the prospectus thanks to Gabelli. But I never heard about this second one?

            1. Gridbird, I just checked and you are right.
              I acted on the Insider buy of the preferred on Thursday by Walker Gordon. Mr. Gordon had bought $800,000 of common and $100,000 of the preferred.
              There was no partial call.
              I wish I could be more focused like you guys.
              In the future, I will try to verify my comments.

              1. Newman, You made a mistake? Dang, you were the last man standing. You have now officially joined everybody else on the forum as we all have errored…We collectively welcome you with open arms! 🙂

      2. 2WR, I have always intermingled different thoughts and ideas when I speak or type.
        MNR is a Reit
        SPLP is not.
        What those two have in common is inside buys that have always influenced my investing. I have done modestly well that way.
        Inside buys on companies that have preferred issues are intriguing .
        SPLP-A at 20 is tempting.
        So apologies for intermingling.
        The Cup and handle formation is a well known bullish technical pattern.
        I don’t get the Allstate reference unless you mean the coffee mug.
        Stay safe

        1. Ha… was just my lame attempt at humor which I guess fell flat…. I knew you were referring to the tech pattern and in response I was referring to the cupped hands in the “You’re in good hands” campaign… As you can probably guess, I’m not a big fan of technical charting analysis, but realize one has to be aware of it because since it has so many believers, it becomes a self fulfilling strategy one has to take into account. I do get a kick out of the ETrade tv add (Is it ETrade?) where two people at an office breakfast service area are talking about an iron condor spread and an iron butterfly spread and the third person chimes in the only spread he’s tried is this cheese spread he’s putting on his toast…

          1. Yeah, the running joke is “There are thousands of charts lying at the bottom of oceans”

            I used to use Insider Buys as a factor in my investing. I still do, But I used to , too.

            Mitch Hedburg comes to mind.
            “I used to do drugs. I still do, but I used to, too.”

            1. -btw your timing looks impeccable on SPLP-A if you went long
              on the inside buyer news…up almost 5% on Friday.

      3. -2wr There’s nothing wrong with Newman’s condensed writing style, in fact its refreshing in its brevity. You might consider adopting it yourself.

        1. wasn’t criticizing N’s writing style, CW – was just wondering if he knew something about a potential tie-in between MNR and SPLP given his mention of the two together and MNR’s hiring of investment bankers to explore strategic alternatives.

        2. CW, Thank You for that.
          I always had a difficult time writing grammatically correct sentences.
          Years ago, my Daughter gave me her English homework to do.
          It was a questionaire on what type of sentence I was reading. A simple sentence or a complex one.
          I thought, this is easy.
          She got a 40% grade on that. She never asked me again.
          I don’t always get the answer right the first time. eg, I’m my wifes third husband, but she treats me like #2′.
          So win win.

          1. Many moons ago, after acing my high school AP English classes, I wrote my first required weekly essay for my freshman college English class. Brimming with confidence and cockiness, I was floored when the prof returned my paper to me graded with a gigantic, boldly written “F” and the following sentence written in angry red letters across the top: “You have a monumental problem in self expression!” Guess I haven’t learned much in the 57 years since that day. lol

            1. Ouch, teach! Love those ad hominem criticisms. I assume they offered no specific suggestion for improvement, either. Must have been a late night grading…

    3. New to this site,not sure if your the person to ask,but would appreciate if you would direct me were to seek help on my one issue. I held WHLRD for to long. Now I just received a offer to purchase there preferred shares back. Are you or any other members familiar with this issue.And what would your recommendations be.

        1. John – Without doing too much DD, it’s obvious that what you decide to do depends upon your own opinion on the survivability of WHRL, HOWEVER it seems obvious that for this company to survive they are going to have to deal with shareholders of WHLRD not only because of the relative size of the issue but most importantly because shareholders own a PUT on WHRLD that comes into play Sept 2023…
          right now shareholders are entitled to roughly $5.46 worth of unpaid dividends…. If nothing is paid until 2023 that amount more then doubles because accrual rate is now greater the 8.75%. That means that if WHLR is to survive they have to pay WHLRD shareholders a total amount exceeding $36/ share upon exercise of put by shareholders (all numbers = rough estimates). So you are in the driver’s seat if WHRL has the ability to save..

          There’s an interesting SA article that predates the tender offer and predicts this tender happening and some active insider buying in advance…. so it’s an interesting situation with the tender seemingly being an offer for weak hands while the bravehearted have a great possibility to more than double that price by 2023 if WHRL can survive… I have no idea how deeply in doo doo WHLR really is.. This is a good possible example of the power of the put because the other preferreds do not have it, which is probably another reason why the tender is for the D’s and not the higher coupon WHLRP.

          1. Thank you so much for the clear explanation. I would never have found this out anyhere online.

            1. John – Understand this came from only a very cursory look into the situation and with no feel whatsoever for or prior knowledge of the company and certainly implies no recommendation as to what you should do… Thanks for bringing it up. I looked into it out of curiosity and as a potential opportunity but will probably not pursue it further.. Below is info from the most current 10q you might find helpful to consider. I also see where WHLRD is subject to a 200% asset cover ratio so that makes me rhetorically wonder how this could have a suspended dividend for so long yet theoretically not have violated that coverage ratio…..

              Series D Preferred Stock – Redeemable Preferred Stock

              At September 30, 2020 and December 31, 2019, the Company had 3,529,293 and 3,600,636 issued, respectively, and 4,000,000 authorized shares of Series D Cumulative Convertible Preferred Stock, without par value (“Series D Preferred”) with a $25.00 liquidation preference per share, or $106.76 million and $101.66 million in aggregate, respectively. Until September 21, 2023, the holders of the Series D Preferred are entitled to receive cumulative cash dividends at a rate of 8.75% per annum of the $25.00 liquidation preference per share (equivalent to the fixed annual amount of $2.1875 per share) (the “Initial Rate”). Commencing September 21, 2023, the holders will be entitled to cumulative cash dividends at an annual dividend rate of the Initial Rate increased by 2% of the liquidation preference per annum on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 14%. Dividends are payable quarterly in arrears on or before January 15th, April 15th, July 15th and October 15th of each year. On or after September 21, 2021, the Company may, at its option, redeem the Series D Preferred, for cash at a redemption price of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date. The holder of the Series D Preferred may convert such shares at any time into shares of the Company’s Common Stock at an initial conversion rate of $16.96 per share of Common Stock. On September 21, 2023, the holders of the Series D Preferred may, at their option, elect to cause the Company to redeem any or all of their shares at a redemption price of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date, payable in cash or in shares of Common Stock, or any combination thereof, at the holder’s option.

              Dividends on the Series D Preferred cumulate from the end of the most recent dividend period for which dividends have been paid. Dividends on the Series D Preferred cumulate whether or not (i) we have earnings, (ii) there are funds legally available for the payment of such dividends and (iii) such dividends are authorized by our Board of Directors or declared by us. Dividends on the Series D Preferred Stock do not bear interest. If the Company fails to pay any dividend within three (3) business days after the payment date for such dividend, the then-current dividend rate increases following the payment date by an additional 2.0% of the $25.00 stated liquidation preference per share, or $0.50 per annum, until we pay the dividend, subject to our ability to cure the failure. On December 20, 2018, the Company suspended the Series D Preferred dividend. As such, the Series D Preferred shares began accumulating dividends at 10.75% beginning January 1, 2019 and will continue to accumulate dividends at this rate until all accumulated dividends have been paid.
              Holders of shares of the Series D Preferred have no voting rights. Pursuant to the Company’s Articles Supplementary, if dividends on the Series D Preferred are in arrears for six or more consecutive quarterly periods (a “Preferred Dividend Default”), the number of directors on our Board of Directors will automatically be increased by two, and holders of shares of the Series D Preferred and the holders of Series A Preferred and Series B Preferred (the Series A Preferred and Series B Preferred together, being the “Parity Preferred Stock”), shall be entitled to vote for the election of two additional directors (the “Series D Preferred Directors”). A Preferred Dividend Default occurred on April 15, 2020. The election of such directors will take place upon the written request of the holders of record of at least 20% of the Series D Preferred Stock and Parity Preferred Stock. The Board of Directors is not permitted to fill the vacancies on the Board of Directors as a result of the failure of the holders of 20% of the Series D Preferred Stock and Parity Preferred Stock to deliver such written request for the election of the Series D Preferred Directors. The Series D Preferred Directors may serve on our Board of Directors, until all unpaid dividends on such Series D Preferred and Parity Preferred Stock, if any, have been paid or declared and a sum sufficient for the payment thereof set apart for payment.

              On September 22, 2020, the Operating Partnership purchased 71,343 shares of Series D Preferred at $15.50 per share. These shares are deemed to be retired on the condensed consolidated financial statements. The book value of the shares purchased included both accreted and unaccreted issuance costs and dividends in arrears totaling $1.83 million.

            2. John I also have both D and P shares. On the yahoo board there is conversation if your interested. The company made progress purchasing back shares in a private deal with an investor at I believe 15.50 per share or there abouts. That started a filing with another large holder which I believe they file yearly. All of the insiders in the offer to purchase have indicated that they will be tendering their shares so I expect the dutch auction to be fully subscribed. The company isn’t in the best of shape and that’s putting a positive spin on it, but insiders hold a lot of both pref and common. If push comes to shove, they can take the D and turn it into common shares, but that’s a known going in. I like the method they’re using, just don’t like the terms of how they got the money to do it as the rate is high, but being able to buy at 18 what you issued at 25 is great for the company. Many times with the suspended cumulative issues it seems like a game of chicken so it depends on your individual perspective and of course your cost basis. I’m not personally tendering as that is my objective in buying far out of the money pfd’s. I don’t however expect this one to come current with past dividends any time soon nor to continue to pay at some date but rather to at some future point do another deal or turn them into common. I have never been burned yet by buying pfd shares when insiders are also buying them. FYI the D’s are carried as debt which is why I believe they’re dealing with them at a lower coupon instead of the P’s

                1. MG, Support the proposition, It may all be Grammarly!
                  “Please see the Ownership section of our Terms of Service.”
                  Gives me an idea for an investing app: Investearly…how original, we only take 1%.

      1. Just letting you know the offer was oversubscribed, and more tendered than they can purchase. They are extending offer and buying another mill but still not enough to cover what was tendered by the first due date if everything stays the same, so you may want to consider open market sells if you want to rid yourself of all your shares depending on what you decided to do previously.

  34. What do HP, Elon Musk, Toyota, Larry Ellison and (now) Digital Realty have in common?

    They all realized that no matter the benefits of living in the Golden State, the downside was too much to live with and they left, or, in the case of DLR, will be leaving soon. DLR is a REIT, hence the post in this section.

    As Walter Wriston said some years before, “Capital goes where it’s treated best.” That includes both human and financial capital. Capital is leaving California.

    I hope that those leaving California don’t Californicate their new states the way they did Colorado. And are doing to several other states. One would think departed Californians would know better than to bring with them the policies that caused them to leave California to begin with but that, perhaps, is asking too much.

      1. Bur, seems Austin real estate prices have already made that leap. Home prices are up 38% over 5 years and 12.8% last year alone. And may still be accelerating into 2021.

        1. i sold my house in austin earlier this year to downsize and dump my mortgage. bought a smaller house since its just the 2 of us in the suburbs. there is literaly a shortage of houses to buy. houses are selling in a day or 2 at full ask with multiple offers.

            1. Yes Bur,
              Thought has crossed my mind too, but its too late for most areas. the California’ns are already there. Plus the growth of population that has no where else to go. My grandkids live in the town of Vancouver Wa. Been driving up there past 4 yrs to see them. Would of been going again this year but for the Covid.
              Look before you leap folks. Known a few people who pulled up roots to move elsewhere only to find different problems.
              Seatac, Seattle to Bellveue up to Lynwood has rush hr traffic as bad as LA and Bay area.
              Portland area is just as bad with its Sprawl.
              Drove up Hiway one on the coast last year and drove thru my old college towns of Eureka and Arcata quiet towns, look like nice places but hasn’t changed since Hippie era, still people walking around with surplus army jackets.
              At my age one has to think of services like medical. In my job I know of the CHI Franciscan Hosp. expansion in Silverdale and the Asante cancer center expansion in Medford. I have customers in a lot of states. Being only inside salesperson I stop and see a few while on vacation and put a face on the business. I have Idaho on the itinerary and the eastern foothills of the Sierra on the Nevada side if we can get back to traveling safely

    1. I’m right behind them. Moving from the Bay Area to Puget Sound this summer when my last kid finishes high school. I’ve enjoyed the last 35 years of living here but I’m done with this state. And I’ll gladly to take the pledge not to bring a single California policy with me.

      1. Welcome up here. It’ll be nice not to have a State income tax, eh? (shhh, not so loud Bur.)

      1. And these are not fringe players leaving. Schwab is California through-and-through, as is HP. I remember visiting the HP building in Palo Alto in the 1960’s, when the place was a virtual backwater.

  35. Good values are popping up in Investment Grade REIT preferreds with YTC at 3.5-4%. I loaded up today on NNN-F, PSB-X and Y, and picked up some AMH.
    I would think that NNN and PSB will call these issues so pretty safe place to put cash for a 9 months to 2 years. I like boring…I’ll leave the bitcoin to the other guy.

  36. Brookfield Asset proposes to take Brookfield Property (BPY/BPYU) private in $5.9B deal.

  37. This may be a warning bell-weather regarding REITs in general and the concept of ‘real estate is a management job for hard-asses’ and the idea of long term being the ONLY perspective for holding ANY real estate.
    There was this ‘sense’ that something was going at Brookfield with REIT. Finance boys have to play finance, that had been going on, debt is sky high over there. They have the fortitude and connections to take it private and let a work-out take place over time. Something had to happen with all of that GGP takeover a few years ago: Alot of that was marginal and a detraction, now a headache.
    Compound that with COVID and lockdown. Now the work begins.
    Actually, good management. I believe that they WILL sort it all out…in private…eventually…then we will see some shiny, buffed, rahrah, revitalized projects spun out again at some point. Capital recycling to the public…Capitalism’s finest play! How long can we keep the low interest rate door open for them?

    1. Waiting on the billion dollar bullet loan (interest only payments) to start happening. Just take the money.

  38. Anyone follow WPC (W.P. Carey)?

    I haven’t found any preferred or BB’s issued by them.

    1. They are a highly regarded RE company. I’ve traded them a couple times because the price bounces around though I’ve never held it long.
      They have no preferreds. They used to have private placement issues that paid a hefty commission to the selling agent. I believe they’ve folded them into the common stock. Seems a sketchy thing for a company that wants to be respected.

      1. Martin, do you know about the approximate time line those shenanigans happened? Just trying to do a bit more research and I had not come across that bit of info yet.
        How would a company roll their debt into common? Through a secondary offering and then use the proceeds to pay off the debt? That doesn’t seem too shady.

        1. I don’t know the details I just know they used to sell high load private issues through independent brokers. One of them tried to sell to me without revealing key details. A lot of companies did that in the old days before investors got wise. Selling that way is what I meant by shady, not closing them.
          Just about everything I read about WPC these days is positive.

          1. They issued shares(units) in private REITs and paid a fixed dividend on them, then a few years later merged them with WPC at some valuation which determined the number of WPC shares that will be offered for each of those private REIT units. They had many series of private REITs in the past but stopped that practice.
            I think they did those mergers so the private REIT unit holders were not left holding illiquid securities. Many other private REITs did not do that and people were left holding junk for years. I think that’s why they have become very unpopular now.

          2. They issued shares(units) in private REITs and paid a fixed dividend on them, then a few years later merged them with WPC at some valuation which determined the number of WPC shares that will be offered for each of those private REIT units. They had many series of private REITs in the past but stopped that practice.
            I think they did those mergers so the private REIT unit holders were not left holding illiquid securities. Many other private REITs did not do that and people were left holding junk for years. I think that’s why they have become very unpopular now.

    2. Mark,
      You might want to wait for a pull-back to $ 60; otherwise, an excellent

    3. Mark-
      Good NNN Reit at right price with history of increasing dividends. Props in USA and Europe. If they had preferreds they would be trading neg YTC now anyway and the bonds would be prob 2% if shorter term.

      1. SDMarc, Yes, I have looked at NNN in the past, but haven’t explored them in a few years. Thanks for the heads up. Preferred sitting right at redemption + next divvy. Might be worth another gander….

        Not following your comment on “if they had preferreds…..” Are you referring to W.P. Carey?

      1. Bob – FWIW just in case you’re unaware, there are apps out there on multiple browsers such as FF and Chrome that solve this problem…

      2. Bob – let’s see if this cut and paste will work. I’m a subscriber and had forgotten that it may be behind the pay-wall. Overall, I pay about $5 per week for Barron’s and is probably one of the best investment tools available. Clearly, I’m not going to purchase many of these investments because I’m not a fan of Treasuries or Muni-bond funds now, but may take a a position in GSK soon with a dividend yield of about 5.5% and some upside potential on the common stock.
        1. Energy Pipelines
        Pipelines Recent Price YTD Return Yield
        Alerian MLP / AMLP $25.64 -32.20% 11.10%
        Salient Midstream & MLP / SMM 4.29 -41 5.6
        Enterprise Products Partners / EPD 19.67 -23.4 9.1
        The drop in oil prices and a growing investor aversion to the energy sector hammered pipeline operators in 2020. The Alerian MLP exchange-traded fund (AMLP) returned negative 32% for the year.

        Yet the industry is doing better than its stocks suggest and could revive this year, particularly if oil-price bulls like commodity analysts at Goldman Sachs are right and West Texas Intermediate crude rises to about $60 a barrel from a recent $48.

        “There is strong free cash flow, low valuation, 8% to 10% yields, and the potential for higher commodity prices and volumes,” says Greg Reid, president of Salient Partners, which runs the Salient Midstream & MLP closed-end fund (SMM). “There could be significant upside.”

        Many pipeline companies began stock buyback programs in the fall, after some halted them in the spring in the wake of the pandemic.

        Closed-end funds focused on pipeline operators—both master limited partnership and corporations—trade at wide discounts averaging about 20% to net asset value, and most yield in the range of 5% to 10%. The Alerian MLP ETF yields 11%.

        Among industry leaders, Magellan Midstream Partners (MMP), at $42, yields 9.7%; Enterprise Products Partners (EPD), at $20, yields 9.1%; and Williams Cos. (WMB), at $20, yields 8%.

        2. U.S. Dividend Stocks
        U.S. Dividend Stocks Recent Price YTD Return Yield
        Vanguard High Dividend Yield / VYM $90.47 0.00% 3.20%
        Columbia Dividend Opportunity / INUTX 33.86 -0.6 3.5
        ProShares S&P 500 Dividend Aristocrats / NOBL 78.82 6.9 2.2
        As investors favored growth stocks in 2020, high-dividend payers languished.

        The Vanguard High Dividend Yield (VYM) ETF, which is dominated by the largest high-dividend stocks, such as Johnson & Johnson (JNJ) and JPMorgan Chase (JPM), was flat in 2020, against a 17% return for the S&P 500. The ETF yields about 3.2%.

        “One of the least popular parts of the stock market are established companies with good dividends,” King says. That could change in 2021 if the recent strength in value-oriented stocks continues.

        One way to play it is through the 10 Dogs of the Dow, which had a poor year in 2020, returning negative 7%, against a 9% return on the overall index. Historically, the 10 Dogs have stacked up well against the overall Dow when investors rebalance their portfolio of Dogs at the end of each year. Besides Chevron, Verizon, and Merck, current Doghouse stocks include Cisco Systems (CSCO), Coca-Cola (KO), and Walgreens Boots Alliance (WBA).

        The Columbia Dividend Opportunity fund (INUTX), which King co-manages, owns nine of the 10 current Dow Dogs. For investors who are willing to trade off a lower dividend yield for better growth potential, there is the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which yields about 2%.

        3. Overseas Dividend Stocks
        Overseas Dividend Stocks Recent Price YTD Return Yield
        iShares Core MSCI EAFE / IEFA $69.60 9.00% 1.90%
        iShares Core MSCI Emerging Markets / IEMG 61.29 16.5 1.9
        GlaxoSmithKline / GSK 36.98 -17.3 5.4
        International markets are a great place to find yield because they have trailed U.S. indexes for 10 years. In addition, foreign companies tend to have higher dividend payout ratios than their American peers.

        “We see much better opportunities outside the U.S. than inside the U.S.,” says David Iben, manager of the Kopernik Global All-Cap fund. He points to telecommunications, utilities, and energy.

        Iben likes Eletrobras (EBR) of Brazil, a huge hydropower generator that trades at $7, or seven times 2021 earnings, and yields 4.7%. He is also partial to the Russian natural-gas behemoth Gazprom (OGZPY), which trades around $5.50, yields 7%, and is far cheaper based on reserves than its Western peers, reflecting Russian risk.

        He also owns Mitsubishi (MSBHF) and Mitsui (MITSY), two of the Japanese trading companies whose shares were purchased by Berkshire Hathaway (BRK.B) last summer. The two companies have thinly traded U.S.-listed shares, trade below book value, and yield about 4%.

        Drug shares lagged behind the market in 2020. European drug giant Novartis (NVS), at $93, trades for 14.5 times projected 2021 earnings and yields 2.1%, while rival GlaxoSmithKline (GSK), at $37, trades for 11.5 times estimated 2021 earning and yields 5.4%.

        Broad overseas ETFs yield around 2%, including iShares Core MSCI EAFE (IEFA), Vanguard FTSE Europe (VGK), and iShares Core MSCI Emerging Markets (IEMG).

        4. Electric Utilities
        Electric Utilities
        Recent Price
        YTD Return
        Utilities Select Sector SPDR / XLU $61.47 -1.40% 3.20%
        Dominion Energy / D 73.88 -6.9 3.4
        Consolidated Edison / ED 70.76 -18.7 4.3
        Showing 1 to 3 of 3 entries
        The sector had a disappointing year, considering the drop in interest rates, but 2021 could be better as investors gravitate toward an industry that will spend heavily in the next decade to develop renewable power.

        The Utilities Select Sector SPDR ETF (XLU) has generated a negative 1% return in 2020. Utilities could generate a 10%-plus return in 2021, reflecting dividend yields averaging close to 4% and price appreciation in line with earnings growth.

        “We see structural decarbonization, robust growth opportunities, a defensive business model, and solid yield underpinning an attractive outlook for the group,” J.P. Morgan Securities analyst Jeremy Tonet wrote in a recent note. He views the group as appealing; it is valued at an average of about 18 times 2021 earnings, a discount to the S&P 500 multiple of 22 times.

        Tonet is partial to Dominion Energy (D), now a nearly pure-play regulated utility in Virginia with an ambitious renewable-energy plan. The stock, at about $74, trades for less than 20 times projected 2021 earnings. It yields 3.4% after a dividend reduction in 2020 that resulted from the sale of a gas-pipeline business to Berkshire Hathaway.

        Some utility stocks were battered in 2020, including Consolidated Edison (ED) and PPL (PPL). Each fell about 20%, while industry leader NextEra Energy (NEE), a leader in renewable power, gained 20%. Con Ed, at about $71, yields 4.3% and trades for about 16 times 2021 earnings. Duke Energy (DUK) and American Electric Power (AEP) fetch about 17 times projected 2021 profits, and NextEra, 30 times.

        5. Real Estate Investment Trusts
        REITs Recent Price YTD Return Yield
        Vanguard Real Estate / VNQ $83.66 -6.10% 4.00%
        Simon Property Group / SPG 83.29 -40 6.2
        Vornado Realty Trust / VNO 35.99 -42.6 5.9
        Hurt by weakness in malls, apartments, and office buildings, the REIT market, as measured by the Vanguard Real Estate fund (VNQ), returned negative 6% in 2020. Industrial REITs like Prologis (PLD) that own warehouses were a bright spot, benefiting from the e-commerce boom. The Vanguard ETF now yields 4%.

        “Interest rates are very low, and that bodes well for REITs,” says Alexander Goldfarb, a REIT analyst at Piper Sandler. Real estate companies should get a lift from a stronger economy in 2021.

        Goldfarb is partial to mall industry leader Simon Property Group (SPG), whose shares, at about $83, yield 6.2%, and shopping center owners Kimco Realty (KIM), at $14, yielding 4.5%, and Brixmor Property Group (BRX), at $16, yielding 5.3%.

        “Bricks-and-mortar retailers remain essential,” Goldfarb says. “People can’t get everything they need on Amazon.”

        He sees Simon as a deep-pocketed mall survivor with a desirable portfolio and strong balance sheet. Owners of strip malls like Kimco and Brixmor are getting a lift as more Americans prefer the convenience of buying online and then picking up products at local stores.

        The New York City office sector was hit hard in 2020. One way to play a rebound is through Vornado Realty Trust (VNO), which has a depressed price of $36 (down 45% in 2020), a good balance sheet, and an attractive portfolio of Manhattan office towers. It yields 6%.

        Goldfarb likes Douglas Emmett (DEI), which has what the company calls an “irreplaceable” office portfolio concentrated in the affluent western part of Los Angeles. The shares, at about $29, yield 3.9%. “The people who live and work on the west side of L.A. aren’t going to Texas,” he says.

        Illustration by C.J. Burton
        6. Telecommunications
        Telecom Stocks Recent Price YTD Return Yield
        Verizon Communications / VZ $58.81 0.00% 4.30%
        Deutsche Telekom / DTEGY 18.5 18.2 3.7
        KT / KT 11.35 -2.2 3.9
        The two major U.S. telecom companies, Verizon and AT&T (T), had a disappointing year. Verizon shares declined 4%, yielding 4.3%. AT&T fell 27%, yielding 7.3%—one of the highest dividends in the S&P 500.

        Verizon looks to be the stronger of the two, with a better balance sheet and a competitive position in the U.S. wireless market. Craig Moffett, an analyst with MoffettNathanson, upgraded Verizon to Buy from Neutral in early December and set a $66 price target. His view is that Verizon, which fetched a recent $58.81, is simply “too cheap,” trading for about 12 times projected 2021 earnings of $5 a share, half the market multiple. He sees high revenue per customer in 2021 and better roaming revenues relative to a Covid-depressed 2020.

        AT&T has expressed commitment to its dividend, but analysts like Moffett worry about an expensive iPhone 12 promotion and pressure on its large media business. At a recent $28.57, AT&T trades for only nine times estimated 2021 earnings.

        Overseas telecommunication companies are even cheaper than their U.S. counterparts.

        Kopernik’s Iben likes KT (KT), one of the largest South Korean telecom companies, and China Mobile (CHL), the largest cellphone company in China. Both stocks have badly lagged behind Verizon in the past decade.

        Both KT and China Mobile trade at seven times 2021 earnings estimates. KT, at $11, yields 4%, while China Mobile, at $28, yields over 5% and has net cash equal to about half of its market value.

        [On Friday, after publication of this story, the Wall Street Journal reported that the New York Stock Exchange will move to delist China Mobile and other Chinese telecom firms to comply with a U.S. government order barring Americans from investing in companies that it says help the Chinese military. The delisting is due to occur by Jan. 11.]

        In Europe, Deutsche Telekom (DTEGY), at about $18, yields 3.7% and owns a large stake in T-Mobile US (TMUS) that is worth nearly as much as its market value. The German telecom has considerable debt.

        7. Convertibles
        Convertible Securities Recent Price YTD Return Yield
        SPDR Bloomberg Barclays Convertible Securities / CWB $81.58 51.10% 2.40%
        Southwest Airlines 1.25% bonds due 2025 145.34 46.1* 0.9
        The bond/stock hybrid securities befuddle many, but after their blockbuster performance in 2020, convertibles ought to attract greater investor attention.

        Convertibles returned about 45% in 2020, based on the ICE BofA U.S. Convertible index, making them one of the best U.S. asset classes. The gain was powered by a huge gain in the share price of Tesla (TSLA), which makes up about 10% of the $325 billion “convert” market. Tesla accounted for about 40% of the index’s advance.

        Growth-oriented technology companies are well represented in the convert market, helping performance. Another boost came from “rescue” converts sold early last year by companies pressured by the pandemic, including Carnival (CCL), Southwest Airlines (LUV), and Booking Holdings (BKNG).

        “We’re calling for 8% to 11% performance in 2021,” says Michael Youngworth, head of global convertibles strategy at Bank of America. The market’s heavy weighting in growth stocks makes it vulnerable to a pullback in the tech sector.

        Youngworth says that converts continue to offer a favorable risk/reward equation: “You get more appreciation on the upside when stocks rise than you lose on the downside.”

        The largest convertible ETF, the SPDR Bloomberg Barclays Convertible Securities (CWB), gained 51% in 2020. It now yields 2.4%.

        8. Junk Bonds
        Junk Bonds Recent Price YTD Return Yield
        iShares iBoxx High Yield Corporate Bond / HYG $87.05 4.20% 4.90%
        VanEck Vectors Fallen Angel High Yield Bond / ANGL 32.03 13 4.7
        Investors have piled into the junk market in recent months, buoyed by optimism about the economy in 2021.

        The result is that the ICE BofA High Yield index yields under 5% and investors need to take considerable risk—in bonds with low-grade triple-C ratings—to get an average yield of 8%.

        Junk returns in 2021 could top the 5% level of 2020 if the economy recovers and investor demand stays strong.

        Yet Martin Fridson, chief investment officer of Lehmann Livian Fridson Advisors, is cautious.

        “High-yield prices convey a level of optimism that is very difficult to reconcile with the credit outlook unless you count on continued Fed support on a level never witnessed prior to 2020,” Fridson says. “Investors are pricing high-yield bonds such that the market is effectively predicting a 2% default rate over the next 12 months. This compares with 8% over the past 12 months, as reported by Moody’s.”

        The largest junk ETF is the iShares iBoxx High Yield Corporate (HYG) at $26 billion, yielding about 5%. The smaller VanEck Vectors Fallen Angel High Yield Bond (ANGL) ETF, yielding 4%, generated some of the best performances in the sector last year and over the past five years. It returned 13% in 2020; large holdings include Carnival and Kraft Heinz (KHC).

        9. Tax-Exempt Municipals
        Tax-Exempt Municipal Bonds Recent Price YTD Return Yield
        Vanguard Intermediate-Term Tax-Exempt / VWITX $14.86 5.10% 2.30%
        Parametric TABS 5-to-15 Year Laddered Municipal Bond / EALTX 13.16 5.4 1.7
        BlackRock Municipal 2030 Target Term Trust / BTT 25.1 7 3
        The market went from feast to famine back to feast in 2020. After a strong start, munis were buffeted in the immediate aftermath of the pandemic and then mounted a strong rally into year end, finishing with a return of about 5%.

        With yields near historic lows, though, it’s tough to make a strong case for munis. An index of triple-A-rated 10-year munis yields just 0.7%, not far from the record low of 0.55% in August. And that index yields just 75% of the 10-year Treasury note, near the lowest point in 20 years and below the average of close to 100%. The yield is less than half of the U.S. inflation rate.

        Lower-grade munis trailed their top-grade brethren in 2020, but have rallied in recent months. One winner lately has been the financially troubled Metropolitan Transportation Authority, which operates New York City’s subways. Its 35-year debt now yields about 2.75%, down from 5% in May. Top-grade long-term munis yield 1.5%.

        Peter Hayes, the head of the municipal group at BlackRock, says a shift in issuance to taxable muni bonds, which now account for about 30% of the new-issue municipal market of about $450 billion annually, should “provide a tailwind” to the tax-exempt market in 2021.

        The largest muni fund is the $80 billion Vanguard Intermediate-Term Tax-Exempt (VWITX), which yields 2.3%. One alternative to the Vanguard fund is the Parametric TABS 5-to-15-Year Laddered Municipal Bond fund (EALTX), which follows a similar strategy to Parametric’s popular separately managed accounts. (Laddering refers to buying munis of different maturities in the same portfolio as a way of diversifying.) The Parametric fund, which is owned by Eaton Vance, has topped the Vanguard intermediate fund over the past five years. It yields 1.6%.

        Closed-end muni funds yield more—reflecting leverage—and generally trade at discounts to their net asset value, or NAV. Current discounts in the mid-single digits are less attractive than the regular double-digit discounts that were prevailing before 2020.

        The BlackRock Municipal 2030 Target Term Trust (BTT), at around $25, yields 3% and trades at a 6% discount to NAV. It is set to mature in 2030. The lower-grade Nuveen Municipal Credit Opportunities fund (NMCO) trades around $12.75, yields 5.8%, and trades at an 8% discount to NAV.

        10. Taxable Municipals
        Taxable Municipal Bonds Recent Price YTD Return Yield
        Invesco Taxable Municipal Bond / BAB $33.50 9.10% 2.60%
        Nuveen Taxable Municipal Income / NBB 23.87 15.1 4.7
        MainStay Mackay U.S. Infrastructure Bond / MGVAX 8.81 6.1 1.5
        The formerly obscure market has exploded in size, with issuance totaling about $170 billion in 2020, double the amount in 2019.

        State and local governments that want to refinance older high-rate tax-exempt debt before maturity must do so in the taxable muni market because of federal tax law changes in 2017. That has been the main driver of the taxable issuance boom, and it is likely to persist in 2021.

        For investors, the appeal is that yields generally exceed those on like-rated corporate debt. Yields are in the range of 1.5% to 5%, depending on maturity and credit quality.

        “There is a lot of demand, and we expect that to continue into 2021,” says BlackRock’s Hayes. He notes that the overwhelming percentage of demand comes from institutional investors, unlike the tax-exempt market.

        There are three closed-end funds specializing in taxable munis that yield 4% to 5%, reflecting leverage and longer maturities. They are BlackRock Taxable Municipal Bond Trust (BBN), Guggenheim Taxable Municipal Bond & Investment Grade Debt Trust (GBAB), and Nuveen Taxable Municipal Income (NBB). All three trade at premiums to their net asset value.

        The one large open-end fund is MainStay Mackay U.S. Infrastructure Bond (MGVAX). It yields 1.5%, reflecting shorter maturities and no leverage. The largest ETF is the $2.2 billion Invesco Taxable Municipal Bond (BAB), which yields about 2.5%.

        11. Preferred Stock
        Preferred Stocks Recent Price YTD Return Yield
        iShares Preferred & Income Securities / PFF $38.17 7.00% 4.80%
        Nuveen Preferred & Income Opportunities / JPC 9.34 -3.6 6.8
        Qurate Retail 8% preferred due 2031 / QRTEP 98.21 0.9* 8.1
        The preferred market, which has been booming, presents difficult decisions for investors weighing risk and return.

        Nearly all of the $350 billion sector, which is dominated by bank issuers, trades at a premium to face value.

        Currently, preferred securities have little upside and considerable downside if rates rise. Most are perpetual securities, meaning that they have no maturity dates.

        Preferred securities issued at $25 a share now often trade in a range of $26 to $28. Yields are generally 3%, calculated more or less to the early redemption, or call, price of $25 occurring in the next few years. Some even have negative yields. Preferred securities can normally be redeemed by the issuer at face value five years after the offering date.

        New issues are coming to market with yields of about 4%, down from 5% in the spring. Bank of America sold $1.1 billion of 4.375% preferred in October (BAC Pr O), and it now trades at $26 for a yield to call of 3.2%.

        Public Storage, a self-storage REIT and sizable preferred issuer, sold $175 million of 3.90% preferred (PSA Pr O) in November. It trades around $25.50.

        One high-yielding preferred that still looks appealing is Qurate Retail’s (QRTEP) 8% issue due in 2031 that trades around 98, just below its face value of 100.

        Qurate owns the QVC home-shopping channel and is controlled by media magnate John Malone, who holds about $85 million worth of the Qurate preferred.

        The largest ETF, the iShares Preferred & Income Securities (PFF), trades around $38 after a 7% total return in 2020, and yields 4.8%. Closed-end funds focused on preferred yield more, reflecting leverage. The Nuveen Preferred & Income Opportunities fund (JPC) trades about $9, yields 6.8%, and trades at a 3% discount to its NAV.

        12. Treasuries
        Treasuries Recent Price YTD Return Yield
        iShares 20+Year Treasury Bond / TLT $157.16 17.70% 1.30%
        iShares TIPS Bond / TIP 127.28 10.5 0.2
        iShares Short Treasury Bond / SHV 110.52 0.8 Zero
        *Since issuance in 2020

        Source: Bloomberg

        Government bonds lived up to their billing as a stock market hedge in 2020. Rates plunged as stocks collapsed in March, and the Treasury market finished 2020 with yields not much above the pandemic panic lows and down half a percentage point or more for the year.

        The 10-year Treasury note yields 0.95%; the 30-year Treasury bond, 1.7%; and short-term Treasury bills yield near zero, reflecting the desire of the Federal Reserve to hold short rates around zero for the next few years.

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        Barring unexpected weakness in the economy, Treasury returns in 2021 are likely to be low and could easily be negative if inflation is resurgent. The 10-year Treasury could fall 8% in price if rates rise by a percentage point.

        Some investors may still want to hold Treasuries as an equity hedge—the equivalent of a put option with some yield. Long-term Treasuries roughly matched the S&P 500 in 2020. The iShares 20+Year Treasury Bond ETF (TLT) returned 18%.

        The iShares TIPS Bond exchange-traded fund (TIP) holds Treasury inflation-protected securities and could do better than regular Treasuries if interest rates rise.

        The iShares Short Treasury (SHV) holds Treasury bills and yields around zero. It offers an alternative to money-market funds.

        1. Kaptain Lou, Nice article here’s an etf “Idea” that checks several boxes mentioned in the Barron’s article. First Trust EMLP I added in August an was only flat for year but. It’s qualified div. and no K-1, beat down mlp’s c-corps and utes, have debated adding to position for some time this article might have sealed the deal.

        2. Thanks so much for posting this…..I urge everyone to investigate convertibles , great asset class with downside protection

          1. Rick – I have looked at convertible funds for a number of years, but have never pulled the trigger. Considering the investment returns for some of these funds in 2020, I’m clearly missing out on area of the market and need to do some more research.

    1. Lou, the Barrons article you posted recommends Qurate Retail’s QRTEP in the preferred stock section, saying it ‘looks appealing’. Since you made a point of posting a warning about QRTEP earlier today, how do you reconcile the conflicting advise?

      -btw I’m glad to see AT&T made Barrons recommended Best Income Investments list for 2021.

      1. Barrons has been recommending QRTEP since Sept and they have 124% return on the preferred since recommending it. I did have my sister-in-law spend 19 minutes on it, and she has a level head (I did measure it), and didn’t find any red flags. She said their revenue is up, their cash is up, etc. I personally dont have a position on it.

        1. I started a small position in QRTEP around the same time that September Barrons article (written by Andrew Bary) was published. Pretty sure the return isn’t 124% though…is that a typo?

          1. Right, it was 124% return on the common and not the preferred, and they have been recommending them since Sept.

      2. Citidel West – I highly respect Andrew Bary and his investment ideas, but he’s also been wrong before. I also note that I’ve certainly made my fair share of investment mistakes and probably many more mistakes than Bary. Last year he was incorrect on the MLP sector and many of those companies really dropped in price.

        At least for me and my brother, the security is just too risky for either of us. Goodwill stands at about $10 billion on the balance sheet, but the other thought on the shares is that neither of us likes the overall QVC products. Watched the channel for awhile after reading this article and there was not a single product I wanted to purchase. However – a lot of people must be buying their stuff because they have billions in sales each year. Also, a small red flag for me is in this ultra-low interest rate environment, they issued a preferred with a coupon of 8% and not callable until 2031. That being said, I can see why some investors may want to consider a small position in the company in the higher-risk area of their portfolio. Everyone has different goals and risk tolerances, so what does not look like a good investment for me may work out well for someone else.

        Overall, I think I can make 8% on some solid investments in the future. Going to buy a little GSK with a dividend of 5.5% and if the stock can gain 2.5% per year in addition to the dividend, I’ll earn 8% per year. Also going to pick up a REIT that I think is selling cheap now with a dividend of 6%. If that REIT can increase in value by 2% each year, in the long run I hope to make 8% with this investment idea as well.

        1. Whether this issue is relevant to any investor is an individaul issue.
          But the facts are not. The market did not price this preferred. It was not issued as a means of capital. This was a total freebee given to shareholders. The company did not recieve a penny of capital there was no capital raised. They could have issued it at 1% or 100% if they had so desired.
          They set the yield as a fair separate means of extracting capital from company as an alternate means of investing through the company in addition to the common. The leadership clearly explained this. The fact its a 2031 maturity is a pure bonus as this makes the company account for it as a liability on the balance sheet and is not recorded as capital.

          1. Grid, the OP also points out incorrect balance sheet info. He seems to confuse intangibles with goodwill. At least we got GSK and an anonymous REIT as good comps. /s

            1. Qniform, Another error is the fact that it is clearly callable in 2025 with an owner friendly descending premium payment first couple years, not 2031 as erroneously mentioned. I actually like a good opposing dissent to make me think. Citadel you have done that in the past and won me over on a few. But, unfortunately there literally just is nothing here.

              1. Correction to my post from yesterday, and I apologize for the error. Per QuantumOnline, the issue is callable in September 2025 at par value of $100 and not 2031 as I incorrectly stated. The maturity date of the security is March 2031.

                This also tells me I need to make another visit to my optometrist in the near future to see if need to get reading glasses with a larger magnification. Thanks for the clarification on my error, much appreciated.

                1. QRTEP is callable between 2025 and 2026 at $104, between 2026 and 2027 at $102, and $100 thereafter, with redemption at $100 in 2031.

          1. Heron, See this is how fellow poster 2WR plays it. His wife buys a bunch of stuff on QVC, while he invests in the Qurate preferred. Qurate profits from the purchases and in turn rewards 2WR with his 8% plus divi. She then takes those proceeds from divis and buys more QVC products. Its a self contained perpetual monetary cycle.

            1. If you have a Merriam-Webster dictionary handy, you’ll notice a picture of my wife and me posted right next to their definition of “vicious circle” aka “vicious cycle” – a chain of events in which the response to one difficulty creates a new problem that aggravates the original difficulty.

  39. Tonight I talked with my brother regarding preferred stocks and he had noticed the comments here on Qurate Retail group and their 8% preferred stock. He is no genius, but looked at the billions of dollars in goodwill for the company. Let’s just say that it took him about 15 minutes to realize this was not a good holding. He’s also pretty familiar with some of the “hype” on the message boards, but overall has a level head on investments. This will certainly not be a company to invest with, as I do manage a little funds for a few of my family members. Wishing everyone success in the new year!

    Highlights Track Record of Superior Value Creation Overseen by Diverse, Experienced Board of Directors
    Monmouth Board Is Reviewing Blackwells’ Unsolicited Acquisition Proposal
    Board’s Nominating and Corporate Governance Committee Will Evaluate
    Director Nominations and Proposals Submitted by Blackwells and Land & Buildings
    Monmouth was the Single Best Performing Industrial REIT
    Based on Total Return to Stockholders, Over the Past Year

    1. wow that is interesting, Jonathan Litt and Land & Buildings taking interest.. wonder if this means the takeout of MNR is probable.. if nothing else it keeps a floor under the share price. Long MNR.PC a small position as cash alternative. There is still so much money sloshing around the world looking for returns. When you consider the low cap rates in EU and Asia, it seems likely there will be foreign interest in US REITs as well. Litt’s ‘white paper’ is an interesting read on the REIT market and his views. Bea

  41. rback,
    BAM!…nice link. I think many here ‘felt’ much of that research without the hard facts and graphs. Esp pertinent for IG and buy on dips.
    I’m afraid our little world of prefs is about to be tsunami-ed soon…
    …but not until after Christmas!! Visualize Whirled Peas and Hominy!!

    1. LDR does put out great info on the asset class. One item they don’t highlight is Yield To Call which on many of the higher quality REIT preferreds is getting almost to zero.

      1. REIT preferred and YTC ………..

        YTC is the real story, as it is for preferred in general. Anything good has a very low YTC. To get better YTC you have to take on substantial credit risk.

        Examples of “good” e-REITS and YTC (stripped to first call based on XD date with decent time left on the call clock):

        BIP-A, 3.73%
        DLR-L, 2.71%
        KIM-M, 1.93%
        PSA-O, 3.48%
        PSB-Z, 2.34%
        REX-C, 3.48%
        VNO-N, 3.78%

        In most cases, unless rates head a lot higher, YTC is close to Yield You’re Going To Get. I own a small amount of BIP-A; otherwise nothing on the list. I’m not putting in long term money into those kinds of yields.

    2. razorbackea… Thanks for posting the link.

      It will be interesting to see how taxes are actually reported on REIT preferreds. This is the first year I have bought these securities in a taxable account.

    1. AS PER BELOW – “the Acquired Business shall be acquired free of indebtedness and preferred stock” which might mean calling in MNR-C under change of control clause?

      Mr. Jason Aintabi
      Chief Investment Officer

      Re: Acquisition Financing – Highly Confident Letter Ladies and Gentlemen:

      You have informed [REDACTED] (“[REDACTED]”) that you are presently considering a transaction pursuant to which you and/or one or more of your affiliates (collectively, the “Sponsor”) would (i) acquire (the “Acquisition”), through a newly-formed corporation (“Newco”) wholly-owned by the Sponsor and other equity investors reasonably acceptable to [REDACTED] (collectively with the Sponsor, the “Equity Investors”), all or substantially all of the outstanding equity interests of, or all or substantially all of the business (including, without limitation, all assets, licenses and related operations) of, a company identified to us and code- named “[REDACTED]” (together with its subsidiaries, the “Acquired Business”) and (ii) refinance substantially all of the existing indebtedness of the Acquired Business and pay any and all accrued and unpaid interest and call premiums thereon (the “Refinancing”). We understand that the Acquired Business shall be acquired free of indebtedness and preferred stock, with such exceptions (if any) for any existing indebtedness as may be agreed to by [REDACTED].

      1. 2WR:

        If private-company Blackwells is able to acquire MNR (a BIG assumption), the “protection” conversion rate on the change of control for MNR+C is 3.41997 shares of common for every share of $25 MNR+C preferred.

        At that monster rate Blackwells will have no choice but to redeem the preferred for $25 cash + accrued dividends.

        My guess is MNR used that large conversion number at the time of the preferred issuance in 2016 to protect preferred buyers if the company was acquired for as low a $7.30/share.

        1. Rob – Under Special Optional Redemption:

          “Upon the occurrence of a Change of Control (as defined below), we may, at our option and subject to certain conditions, redeem the Series C Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred, for a cash redemption price per share of Series C Preferred Stock equal to $25.00 plus any accumulated and unpaid dividends thereon (whether or not declared) to, but not including, the redemption date (unless the redemption date is after a record date set for the payment of a dividend on the Series C Preferred Stock and on or prior to the corresponding dividend payment date, in which case the amount of such accrued and unpaid dividend will not be included in the redemption price).”

    2. UMH common pops a buck and a half too. Maybe they know what they were doing to hold a wad of the Monmouth common? I hope they take the cash and bank it. Prob a good time add liq.
      I own no UMH at this time.

      1. Joel, I’m seeing UMH common at 15.24, down on the day…and the high for the day at 15.47, only up four cents from Friday’s close.

    3. My take is that Monmouth is a family run business that won’t be too interested in any deal.

  42. Bought a small quantity of Sauls Today (BFS). My approach is this is a long term play on grocery anchored shopping surviving and being back in decent shape mid next year. Their collections are decent and I think they will hold the 6.4% dividend while I wait for the price rebound. They have a decent record on that front.

    I also have the preferred but again, in small quantities.

    1. I am a fan of BFS as well, and they are the landlord for my regular grocery store (Mom’s Organic). I’m long the preferreds.

      UBP has a similar story and I think they are also worth a look (I am long their preferreds as well).

    2. Bill – Think you might be a little late with BFS common. I have the preferred and will be adding to that position. I took a big position for me in grocery anchored shopping centers in Oct (REG, ROIC, UBP) was going to add BFS but had seen how they all trade the same way so limited the buys to the three) because the group was way undervalued (even I could see that) . Then they all went up 30% few week later and I sold out of all. That being said I like BFS but think you will have a better buying opp in 1st quarter when numbers will not be as good as the rent collection trend has been. Also keep UBP and REG on your radar if you like the segment.

      1. SMMarc – Yeah I lucked into UBP common (I am sure from someone mentioning it here) at $9.50 but owned more than I was comfortable with with for such a small company. Hence in looking around came across BFS looking for similar circumstances. Was not as quick on the draw as you say but I’d be happy with a modest recovery plus the dividend.

        Will watch Q1 numbers with interest…..

        Also will be interesting if UBP reinstates any more of the dividend in the next couple of quarters. I still have it.

  43. All: just a comment on the “new” methods by SA. My article from October had 3,300 views and then another 5,300 by mobile phones (you don’t get paid for these) so I received about $35 for the article and then maybe another $30 from the page views. However, I have fun writing the articles and make a couple of bucks for my animal shelter. The comments sections are always the best, so I actually spend a few more hours reading those and commenting back to comments.

    Under the new methods, my article would probably bring in about less than $10. Considering that I used to work for Tastee Freez back in 1984 as a high school student at $3.35 ( that was the minimum wage back then), there is no motive for anyone to write articles now. BUT wait for it – they do take a 35% cut from any of their investment newsletters. However, any and all references to TipRanks are quickly deleted. So a newsletter for $499 per year brings in a lot of revenue for them. The “Once in a Lifetime 20% Discount” is probably promoted daily.

  44. Joel A, SDmarc, Razorback, Lou, Tim et al (calling you guys out only because you mentioned UMH in your posts):

    Looking for feedback and guidance on UMH. I’m wary of the rate at which they rely on common and pfd issuance (not to mention debt) to fund investment. Their operating cash has covered their Div+Interest payments only 2 of the past 5 years, and that by very slim margins.

    Do you think my concern is well-founded?

    1. Bur Davis- UMH is an odd REIT along with its sister MNR. I owned the preferreds over a year ago but didn’t understand how they operate so got out shortly after I bought but after doing a lot of research over the past 6 months on them, I have strong conviction on the companies. Read the earnings call transcripts for MNR and UMH plus some of the company histories/interviews and you will understand more how/whey they do what they do. Some might not like the corp governance but I look at it as being able to invest along side the owners who have a lifetime of vested interest in the operations. Family controlled public companies don’t usually pan out well in the long run for outside investors but I feel differently about this one.

      1. Uh oh! An “it’s different this time” story line on MNR and UMH… If that’s not a kiss of death then my starting a position this morning in MNR-C must be… lol. Thanks for the lead to get into the quarterly transcript… It’s an interesting read..

        1. 2whiteroses – Don’t worry, I based my investment decision on the fact that UMH main offices are located on Route 9 in Freehold, NJ which is the HWY Bruce Springsteen sang about in “Born to Run”. Better than following SA or flipping a coin lol.

          1. “I’m driving a stolen car on a pitch black night, and I’m telling myself I’m gonna be alright. But I ride by night and I travel in fear that in this darkness I will disappear.”
            Here’s hoping we’re not driving down Route 9 in total darkness in what turns out to be a stolen car….

      2. Just finished reading through the Q3 investor call transcript for UMH. I can see the value in buying, improving and expanding trailer parks (errrm, I mean ‘manufactured home communities’).

        Repeated mentions of having just called the B series and plans to call C (July 2022) and D (January 2023), in order to reduce cost of capital. Makes sense.

        The 2019 10-K shows $96.7M in issuance of pfd stock. Do you think that’s a non-traded issue? I guess it must be, since I see only the C and D series currently being traded.

        Also, how does an ‘At-The-Market Preferred Equity Program’ work? They show $15.9M in funds from that in 2019, as distinct from pfd stock issuance.

        1. Bur Davis- I think the ATM program allows then to keep issuing the current preferred issue at the market price whenever they need more funds. While not cheap money…it is easy money. Without looking I think the 2019 $97 mill was prob from the ATM and was an increase of the current preferreds. Someone else might have a better or corrected explanation.

          1. Aaahhhh….. that would make sense of the steady stream of cash they’re showing from Common and Preferred on the CF statement. Thanks.

    2. Bur,
      I had written an extensive response to you, but closed the site before posting it. In essence, I think they are tough hombre managers in a tough business and have the respect to have long lived, growth operations and get funding and have done debt retirement when they need it. Another tough business management like this is BAM. It is a very complex business to operate and carry-forward, lots of moving parts. I trade when I can buy it right , am out right now and have an open order with some cash waiting to be allocated on a down turn.

      1. Joel, thanks for the thoughts and perspective. I dipped my toe yesterday into the D series (lower coupon but higher YTC). (Re losing text: hate that! Can’t Chrome invent a go-back-in-time button?)

    1. SDM – Is MNR-C the exception to the rule on paying dividends???? Based on MNR’s press release, it seems to say that MNR-C pays from a date other than payment date to payment date. The quote I see says,
      “on October 1, 2020, the Board of Directors declared a dividend for the period September 1, 2020 through November 30, 2020, of $0.3828125 per share on the Company’s 6.125% Series C Cumulative Redeemable Preferred Stock payable December 15, 2020 to shareholders of record as of the close of business on November 16, 2020. Series C preferred share dividends are cumulative and payable quarterly at an annual rate of $1.53125.” If I’m reading this correctly, a buyer of MNR-C today would be receiving accrued dividends from 11/30 and beyond even though he will get no dividend payment on 12/15 because he’s buying post 11/30 and post record date of 11/15. That seems to be very unusual….It would also probably mean that whenever MNR-C is called, the final payment will include a 15 day additional payment to make up for the amount currently not paid between the last day of the month and the 15th day when payment happens…. Yes?

      1. I am not following your reasoning at all. Dividends don’t accrue at all. You hold it on one of the 4 days of the year, you get it, you hold it the other 361, and you don’t. Any special payment at redemption will be calculated based on the record date of the previous distribution.

        1. Justin – I get what you’re saying about preferred dividends vs bond interest regarding “accruing” in that technically, because dividends are declared, they don’t accrue, however, in practice, they do. I would bet every prospectus for a preferred uses language about dividends “accruing,” and if they don’t they’ll use the term “accumulating” instead which has the same meaning in practice. Every preferred that’s called on a date other than the scheduled payment date always pays an amount of premium above the liquidation preference amount” (aka “par’) that’s equivalent to an “accrued” or “accumulated” amount of dividend…. Having said that, you are wrong about the amount of that accrual being calculated from record date to record date. They are paid from payment date to payment date and issues like MNR-C appear to be the exception to the rule based on their press release. In general, though, “record date” is merely a date that determines who gets paid the amount due.

          In the case of MNR-C, it’s even more complicated because they are saying that they pay the amount due calculated neither from the record date (“shareholders of record as of the close of business on November 16, 2020”) OR the payment date (“payable December 15, 2020”), but from a different date deemed to be 15 days BEFORE the payment date and 14 days AFTER the record date (“a dividend for the period September 1, 2020 through November 30, 2020″)

          For an example of boilerplate, take a look at language of new SIGIP:
          ” A “dividend period” is the period from, and including, a dividend payment date to, but excluding, the next dividend payment date, except that the initial dividend period will commence on, and include, the original issue date of the Series B preferred stock and will end on, but exclude, the March 15, 2021 dividend payment date.
          Dividends will be payable to holders of record of the Series B preferred stock as they appear on our books on the applicable record date, which shall be the 15th calendar day before that dividend payment date or such other record date fixed by our board of directors (or a duly authorized committee thereof) that is a business day and not more than 60 calendar days nor less than 10 calendar days prior to such dividend payment date (each, a “dividend record date”). ”

          Language about amount due on optional call says, “We may redeem the shares of Series B preferred stock at our option:
          in whole or in part, from time to time, on or after December 15, 2025, at a redemption price equal to $25,000 per share of Series B preferred stock (equivalent to $25.00 per depositary share), plus (except as provided below) an amount equal to any declared but unpaid dividends and the portion of the quarterly dividend per share attributable to THE THEN-CURRENT DIVIDEND PERIOD [emphasis added] that has not been declared and paid to, but excluding, the redemption date.” It does NOT say from “record date,” but from payment date.
          In practice, most of the time, these are distinctions without a difference, but when a preferred is called and is called for a date that is other than the normal payment date, it is important in order to be able to calculate the amount you should receive upon call date if it’s not spelled out at the time of the announcement…. And while were at it about boilerplate language, there’s the other standardized boilerplate is that dividends payable on preferred stock will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

  45. All: It has been a very nice month for REIT investors even with the down market today. Personally, I always look at the management team and past results before making investment decisions. SA has now changed the terms of compensation there, I cannot even post an article for $50 and donate the proceeds to my local animal shelter and it appears my limited writing there is now done. Hopefully everyone did their research and purchased a few issues before the rise in the market. Still some value in perhaps UMH preferreds at the present time, but always looking for a lower entry point.

    1. Lou – I don’t know all the details of what SA did but my sense is that they chucked out everyone except for those with a service to sell. No one is going to spend a day writing an article for a couple bucks unless it’s a de fact advert. How much the place has changed. Your thoughts?

    2. kaptain–wow I didn’t realize SA was making such broad changes. As you know to do an article for them now takes lots of effort and I haven’t had that time for years, but if the new system effectively cuts out most writers seems to me that over time SA is shooting themselves in the foot.

      1. I agree. The free exchange of information and ideas among individual investors, like several other sites in the past, will be lost. I generally found the comments of each article to be most informative but not pay worthy.

        Just my humble opinion.

    3. Kaptain Lou- You’ve opened my eyes to stuff not on my radar over the past 6 months that I am very happy holding. You dig up any other gems i don’t have/know about I will personally make the $50 donation to your animal shelter.

    4. With most REIT preferred indices and ETFs trading back to all time highs, not much value out there. A few property REIT preferreds with some margin of safety (priced below $25 and company with decent balance sheet) include:


      Of course, one can buy nearly any of the hotel REIT preferreds well below $25, but several stopped paying preferred dividends and all of them continue to burn cash monthly as they pray for business and leisure travel to return.

      Obviously, very slim pickings out there.

      1. Rob- Only other one I still hold is MNR-C. Otherwise we are carbon copy. Can’t wait til the next crash and pick up some good IG issues again

  46. GOODN popped right prior to closing; 500 (or 600) shares traded as high as 28.87. Congrats to whomever was able to sell that high.

  47. Sold out my large (for me) common reit positions I only added in past 4-6 weeks. ESS, REG, ROIC and UBA. Thought they were way undervalued based on real NAV alone so figured a good long term hold until value was realized. Hey realized a lot of the value in one day so sold all for +26% gain. Take the profit and run. Will be watching for pull back in next few weeks to pick them up again.

  48. EQR common up 28% this morning, 11/9/2020. Even with the vaccine exuberance that seems excessive. Anyone care to speculate why?

  49. Feeling brave?
    VNO prefs below par, past call, little rifi risk at these coupons, coming x-div, beat down common still paying, beat down epicenter of work-from-home NYC, experienced managers with credit connections, just refi-ed a project for 500MM.
    Fear in this market. Got cash and faith in NYC snapback? Place a lowball buy order and wait ?
    Back home throwing out ideas from a view of the screens.
    PS: Spreads on the pref market as a whole are very wide to Treasuries historically. May lend some long term stability to hold-tactics.

    1. How indeed will office attendance change in 2021 and 2022? Some assert that office attendance (and by extension, occupancy) will never recover. I’m not so sure: if nothing else, I believe that economic growth will outweigh any decline in office attendance (I say this from the standpoint of having worked in the tech industry and seen the pendulum swing back and forth on in-person vs. remote work attendance).

      In any case, to the specific case of VNO, I just did a quick comparison of occupancy rates reported in the VNO Dec 2019 10-K vs. the Jun 2020 10-Q. They report that in New York
      – Office occupancy is down 0.5%, to 96.4%
      – Retail occ is down 10.9%, to 83.6%
      – Residential occ is down 7.1%, to 89.9%
      – Overall NY occ is down 1.5%, to 95.2%

      I’d welcome any speculation as to what that means for VNO pfd’s.

      And who knows what the Sep 2020 10-Q will bring (due to be filed next week, I believe)?

    2. Joel A- Thanks for the heads up. Maybe pick up a little of the VNO- K issue? Going to do a little more research this week.

      1. SDMarc, I’d be interested to hear the results of your research, and your thoughts on the New York & SF office/retail markets VNO is tied so closely to.

        1. Bur Davis- Still processing VNO. Stong management, great buildings, strong balance sheet, long term leases (unlike residential reits in the cities). Will prob buy if drops to the $23s on bad news. Here is Moody’s recent report gives good insight
          New York, October 16, 2020 — Moody’s Investors Service (Moody’s) has confirmed Vornado Realty L.P.’s Baa2 senior unsecured ratings and its parent Vornado Realty Trust’s (collectively ‘Vornado Realty’ or ‘the REIT’) Baa3 preferred stock concluding the review for downgrade initiated on July 15, 2020. In the same rating action, Vornado Realty L.P.’s senior unsecured and subordinate debt shelf ratings and the parent’s preferred stock and senior unsecured debt shelf ratings were also confirmed. The rating outlook is negative.

          The rating confirmation action reflects the sizeable new lease signing at one of its development projects, the REIT’s modest near-term lease expirations and strong liquidity. The rating also incorporates the expectation that REIT will pursue meaningful deleveraging transactions in the next 1-2 years.

          The challenges to reducing leverage against the backdrop of weak office leasing volumes and the difficult operating environment for New York city retail and Vornado Realty’s showroom business are the key considerations in the negative outlook.

          The following ratings were confirmed

          Issuer: Vornado Realty L.P.

          Senior unsecured, at Baa2

          Senior unsecured shelf, at (P)Baa2

          Subordinate shelf, at (P)Baa3

          Issuer: Vornado Realty Trust

          Backed Senior unsecured shelf at (P)Baa2

          Preferred Stock at Baa3

          Preferred Shelf at (P)Baa3

          Preferred Shelf Non-cumulative at (P)Baa3

          Outlook Actions:

          Issuer: Vornado Realty L.P.

          Outlook changed to Negative from Rating Under Review

          Issuer: Vornado Realty Trust

          Outlook changed to Negative from Rating Under Review


          Vornado Realty’s ratings reflect the REIT’s well occupied portfolio of high-quality office assets, diverse tenant base, elevated leverage metrics including secured leverage and strong liquidity position. The rating also considers the REIT’s large development pipeline, geographic concentration and proven ability to access the mortgage markets to meet funding needs. The rating incorporates the expectation that Vornado Realty will pursue operational and capital strategies that limit the strain on leverage metrics in the current environment while increasing the likelihood of steady and significant improvement by 2022.

          At the end of Q2 2020, Vornado Realty’s operating office portfolio in New York, Chicago and San Francisco were 96% occupied. Occupancy in its New York retail portfolio declined by 9.3% in the second quarter. The cash net operating income (NOI) from the retail segment and Chicago asset, including the showroom business, in Q2 2020 was 20% lower than the prior quarter due to the pandemic. In comparison, cash NOI for Vornado Realty’s New York and San Francisco office segments declined by a modest 6%. Moody’s estimates that the REIT’s aggregate income will grow in the next few quarters but would likely remain below the pre-pandemic level until at least the first half of 2022. The REIT’s manageable lease maturity schedule, less than 15% of its office leases in New York and San Francisco (based on annualized base revenue) expiring by YE 2022, is credit positive as it reduces the potential for meaningful deterioration in office occupancy or NOI in the current disrupted environment.

          Renewals will likely dominate lease activity in the next few quarters. Deferral of the longer-term leasing decisions also allows tenants to better evaluate evolving trends such as remote working, distributed office locations and migration to economical office markets.

          In the second quarter of 2020, Vornado Realty’s aggregate cash rent collections were healthy at 88% without adjusting for deferrals and collection in the office segment was higher at 93%. Nevertheless, Vornado Realty, like other landlords will have to work with its retail tenants, especially the smaller operators who are facing severe liquidity issues, with deferrals, abatements and other forms of concessions.

          As the REIT continues to invest in its large development pipeline, aggregate outlay of $2.2 billion, its high leverage metrics will be further strained. The Facebook lease signing for the Farley building office space has reduced income risk related to the development projects and the steady pace of condo sales in the 220 Central Park South project mitigates funding risk to some extent.

          Vornado Realty’s aggregate leverage metrics are elevated for the rating level and the REIT’s preference of non-recourse mortgage debt results in high secured leverage and a modest yet high quality unencumbered asset base. The REIT’s net debt + preferred to EBITDA, including its share of joint-ventures and 100% of Alexander’s Inc.(NYSE: ALX) and excluding the Moynihan train obligation, was 9.3x at the end of Q2 2020 and would likely increase by 0.5-1.0x due to a decline in recurring EBITDA and a larger debt balance due to development capex. The ratio is about a turn lower if calculated using stand-alone GAAP reported financials. The debt + preferred to gross assets metric was 50.4% at the end of Q2 2020 and secured leverage was 36.7%, including its share of joint-ventures and 100% of Alexanders, and the ratios were 42% and 26% on an as reported GAAP basis.

          The leverage tolerance for Vornado Realty is moderately higher than similarly rated peers due to its track record, diversified capital structure, including a high proportion of non-recourse debt and preferred stock and pending income recognition for leases signed at the development projects. The high unencumbered asset coverage (unencumbered assets/unsecured debt) and unsecured interest coverage (unencumbered EBITDA/unsecured interest) ratios are significant credit positives that support modestly higher aggregate leverage tolerance.

          The REIT’s liquidity profile is excellent with substantial availability on the revolver, a large cash balance, proceeds from condo sales and modest near-term capital needs. At the end of Q2 2020, Vornado Realty had almost $1.7 billion of remaining capacity on its two credit facilities, and over $2.2 billion in cash, including its share in unconsolidated joint ventures and Alexanders Inc. The steady pace of condo sales at the 220 Central Park South project has provided funding for a material portion of its development capex in the next few quarters. The REIT has $2.8 billion of maturing mortgages through YE 2021 and most will likely be extended, or refinanced. Remaining capital spend for the ongoing projects, approximately $1.4 billion, is modest relative to available capital resources.

          The coronavirus outbreak, the government measures put in place to contain it, and the weak global economic outlook continue to disrupt economies and credit markets across sectors and regions. Our analysis has considered the effect on the performance of commercial real estate from the current weak economic activity and a gradual recovery for the coming months. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, the degree of uncertainty around our forecasts is unusually high. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety.


          An upgrade is unlikely and would require net debt to EBITDA close to 8.0x, fixed charge coverage above 3.0x and secured leverage below 20%, all on a consistent basis and including pro-rata share of JVs.

          The ratings could be downgraded if weak operating trends persist and the REIT is unable to execute significant deleveraging activities in the next 12-18 months. Debt + preferred to gross assets, including pro-rata share of JVs, remaining above 50% or fixed charge consistently below 2.5x are factors that could cause a downgrade. Inability to increase leasing volumes or execute transactions that will lower net debt outstanding and thereby reduce net debt to EBITDA to close to 9.0x by YE 2022 could also precipitate a downgrade.

          Vornado Realty Trust (NYSE: VNO) is a large office focused REIT that owns over 22 million square feet of office space, including its share in unconsolidated joint venture assets, in New York City, Chicago and San Francisco, has interests in over 2.2 million square feet of street retail in New York City, 1989 residential units and a hotel in New York City.

          1. Sorry Marc this went to spam and I got it out–not sure why–maybe it kicks long posts out.

          2. Guys, I will offer my two cents as I now got my last 100 shares in today at $64 on this and most arent even aware of it. There is a third option to play VNO which is what I am doing as Tim doesnt have this one listed…First I consider this a high risk bucket long term play despite the Baa3 credit of the preferred. Im assuming things will get worse before it gets better in office reits and Vornado with most of its assets (and many of them very prized despite the office reit mess that is going on) in NYC /Manhattan area this is the ground zero of “office flight”.
            I bought the convertible preferred VNORP. Based today off VNO-L at 24.34, one is giving up 50 basis points but in return get a convertible that currently is owner optional convertible to common at a 1.953 ratio. It has been adjusted many times since 1997 issuance when it was originally 0.687. So one gives up a few bps of yield, but gains in common stock participation appreciation. As recently as February pre corona it was over $120. I dont expect any real appreciation near term at all. But while one is waiting (and it may never occur, who knows) one does sit above the common and has equal footing with the other fixed preferreds. Me personally, I would have no interest in a 5.5% fixed perpetual office reit. I think one can get that yield in safer places. As I said, I dont really believe that Baa3 preferred rating as I am assuming fundamentals will deteriorate more. Whether the common has this baked in,I dunno….
            Added important thought. I bought a month ago around $65-$66, and flipped 100 of them at $68 or so. Then I later discovered there are only a little less than 14,000 shares left outstanding from an over 5 million share issuance back in late 1990s, so I paid $68 to get those back, ha. Most have been tendered to conversion over the years and the share count slowly dribbles lower each year. They delisted it in 2013 because the minimum share count of 100,000 was not there to remain listed on NYSE. So this is why I got in now as its hard to get, I just stumbled onto it at $65 last month and assumed this was easily bought. But after the fact researching indicted this just wasnt so, and the shrunken share count is obviously why.
            Of course one needs to remember this is not convertible into cash, just the formula above to the common. The company optional conversion is way out of the money presently. I am hoping over time the conversion continues to adjust higher as for example it 1.385 in 2007, 1.4334 in 2014, 1.5934 in 2017, and the present 1.9531 in 2019
            They are announcing quarterly results after market closes today if memory serves me.

            1. Grid, exhibit 4.3 of VNO’s latest 10-K (from 18 feb 2020), which is posted at, says:

              “Conversion Rights / The Series A Convertible A Preferred Shares are convertible, in whole or in part, at the option of the holder at any time, unless previously redeemed, into Common Shares, at an initial conversion price of $72.75 of Liquidation Preference per Common Share, subject to adjustment in certain circumstances. As of December 31, 2019, the conversion price is $1.9531 per Common Share.”

              Wait a minute… Don’t they mean “conversion *rate* 1.9531 per Common Share”?

              For example, in your post you give the conversion *rate* as 1.9531. Rate not price. That makes sense.

              And that’s the wording that’s used in the original VNORP prospectus, although as you point out the rate was lower (“Series A Preferred Shares are convertible at any time at … a conversion rate of 0.68728 Common Shares for each Series A Preferred Share).

              1. Not following you Bur, as your info mirrors what I said… Is this what you mean? Lets say you own VNORP and you wanted to convert yesterday. Yesterdays price was $32.50, so you would convert then at $63.47. See this convertible is close to convertible positive now. That is almost non existent in convertibles. Most are way out of the money, or busted, or will get converted at a lower price than issue price on a forced dated time. This cant happen being its not a mandatory convertible.
                If VNO can force conversion at $72.75 well that just nets you $142.08. And what if that is 15 years from now and the conversion factor keeps growing and its 3 then? Now your looking at $218.
                See this is what appeals to me…One at least has further possible upside potential…Maybe a lot down the road..All by just giving 50 bps up from the fixed perpetual with no real upside. A fair trade to me.

              2. They were sloppy in the filing and didn’t proofread it before filing it.
                They have it correct the other place they mention it in the filing.

      1. SD, I rode the coat tails of VNO via VNORP the convertible preferred I bought last month. Popped about 18% or so with it today, so I sold half to capture the some gains. Other than that a ho hum preferred day.

  50. JCAP and JCAP-B I have a couple of technical questions if anyone has any experience on this…. On Oct 26 JCAP shareholders approved the acquisition of JCAP by NexPoint Advisors. JCAP shareholders are to get 17.30 in cash and JCAP-B is to be called upon closing of the deal.. I would have thought once shareholders approved, this would be a done deal with a timetable for closing immediately made public, but so far, JCAP’s been silent on timing. So that’s one question – is this SOP or should a timetable be made available ASAP? Surprise, surprise, IR is silent upon being questioned.

    My second question is this – Once the deal closes, will JCAP-B be called immediately OR will it be subject to the 30 day notice requirement???? Anybody have a definitive answer??? It might potentially not be subject to the 30 day notice under a Change of Control…. I own JCAP-B but not JCAP.

  51. I decided this was a buying opp instead of panic opportunity. Added to my ess, reg, and nnn positions on the way down. I’m ok if I’m wrong because I have high conviction on the value in those assets. You can’t get anywhere near those yields buying the underlying assets. First time I can remember getting excited about down market. We will see.

    1. Utilities make up my largest sector holding. I believe what they provide will be needed wherever people are, regardless.


    2. Razorbacks- I also like the preferred REITs but have recently sold all the investment grade ones because the prices are too high. Still own preferreds for Saul, umh, Monmouth, Uba. Recently I have added common REITs in grocery anchored shopping which are selling for 30% + discount to nav in my option and still pay great div(ex reg). Also own Essex (Apts) and NNN. Think these common are better options. At these discounts I like grocery shopping centers, some of the apt REITs and the retail NNN REITs. I like storage but over priced. Staying away from office and far away from mortgage reits.

  52. Now back to REITS… Just bought ESS (Essex Property Trust). Did a big deep dive while I didn’t want to jump in…the value was just there for me. 4.2% yield (almost 40% higher than last number of years). Prob about 20% under valued based on my NAV. Limited units in hardest hit West Coast Cities even though news makes it look like everyone is leaving California. Most of suburban California is performing great. San Diego, OC, Ventura etc. Any thoughts on ESS or other APT REITS??

    1. Article on SA by Trapping Value about apartment reits might be worth a look before it goes behind the paywall. I just breezed over it as I don’t have a lot of interest in apartment reits.

    2. I think Apartment reits are undervalued here and good opportunities, especially if you are a long term investor

      I own the following 3

      AVB – started a position in late March after the crash with a small add in may and a recent add in September

      CPT – started this position back in May

      EQR – started this position in September

      One of the few people I follow and trust on SA is Colorado Wealth Management fund. They have a limited focus on Reits and have had a number of good articles on Apartment reits – here is the latest

      1. Maverick61- Thanks for link to Colorado Wealth Management article. He seems pretty thoughtful. Used to follow him along with a lot of others on SA but overall got such a bad taste I stopped following all (will add him back). I just tried to figure out APTS myself last week and couldn’t make heads or tails. He clarified APTS issues for me. What I also like about AVB and ESS is they have it in their DNA not to cut dividends (doesn’t mean they wont in future) FYI. I’m involved in some private multi-family partnerships here is Southern Cal and I can tell you our rent collections are 99% and rent rates are stable. The news makes it look like everyone is leaving California but not really true outside San Fran and core of LA and most of those are moving to other places in CA. I like EQR but the market may beat them up worse than others for a while because they are in the heart of the storm. Buy EQR and don’t look for 4-5 years and you will have a great return.

        1. SDMarc – no problem. Yeah, Colorado Wealth Management is one of the few I like on SA. He stays in his lane focusing just on Reits, and really a subsector or two of reits at that, and does decent analysis.

          I do look for companies that , as you said, have it in their DNA not to cut dividends which is what attracted me to AVB initially as well as a couple other beaten down Reits this past spring / summer

          1. Maverick61. The thing that bothers me about some of the SA guys and I didnt realize it again until today is that I couldn’t figure out the person behind Colorado Wealth?? I like to google and see who these guys really are/were. Example. Brad Thomas puts out some good stuff once in a while on REITs but when I looked him up..he seems a little nuts. Doesn’t mean his research isn’t OK it just makes you pause a bit.

            1. sdmarc – that is true. That said, CWMF is ranked high on Tipranks


              and I have followed him for quite some time now and he has always been a straight shooter. FWIW I followed Brad Thomas several years ago and liked a some of his research and a few of his ideas early on but also realized he is not a straight shooter. I think the key with any of them is to always do your own research. These days, CWMF is one of the very few I trust in the articles he puts out – but I still don’t act on all of them. Just use him for ideas that fit my risk / reward profile

  53. Good evening REIT investors:

    I hope this message finds you all well. As I mentioned previously, I exited this board with regret, but will post a final positive message. After much review, and comments from a number of posters here, I was 99% convinced that the Sock Drawer and Illiquid Pages were being used to promote (and sell to novice investors) securities for their own personal gain. We can all “agree to disagree” but this is the honest and brutal truth. Please note that on any message boards there are many novice investors that will buy securities on recommendations from posters that want to put them in the “Sock Drawer” but will then sell them immediately if they can make a profit.

    Yesterday, I put up a new article on SA and will post the link below. And while I do make a couple of bucks (maybe $40 for the article), all of the recommendations in my article are long-term holds, bought for me and my family members with the expectation for 6% returns. Not great, but not too shabby either. Please also note that my limited proceeds from any article are always donated to my local animal shelter – so I am clearly not writing for any personal profits here. Below is the link, and I certainly wish everyone here continued investing success in the future. Learning, helping and educating people should be what these message boards are about. Wishing continued success to everyone here!

    1. Hi KL–good to see you. Yes a person writing casually on SA will not earn much more than beer money–or in your case donating money to a worthy cause.

      1. Tim – I just write to improve my investment and writing skills and there is never any question about the money.

  54. I would like to thank everyone from this site and SA for reaching out to me in the past couple of days. It has been very humbling to see so many people reach out to me. Thank you all.

    With regret, I do plan on contacting the SEC regarding the strange trading pattern on some of the illiquid issues. I have printouts of many of the “recommendations” on this board with no trading history, but then are mentioned here, SA, and Silicon Investor, etc. Many websites pushing the same issues by the same authors, but done by a few people. Calls to Investor Relations that the issues will “not be called” seems like a similar pattern on this website as well. However, it never seems to end. The trades on some of these can be easily traced.

    No Sleep Till Brooklin

    1. Kaptain, have you ever done one of these? They go after big fish, and especially the ones that involve hundreds or billions of dollars. Remember, they are looking for “headline material,” organizations that are colluding together, and lots of defrauding. They are looking for securities that are being sold in the millions or hundreds of millions of dollars that are mis- represented and not what they are. They are looking for individuals that are defrauding and stealing from investor’s accounts. They are looking for broker dealer insider trading.

      If you are using webblog info as your stated facts, this is not enough. This wont pass step 1 of the lawyers. If your opening line is… “Well, I am reading a webblog, and there are some dudes on there saying stuff, and I dont think that is true, and by the way, i think they are really bad people…, ” you arent going to get very far. They will do an impact assessment and calculate (as an example) 100 trades for a security that is bought and sold a few times a year. Then assess against what they define as fraudulent SEC activities. The amount of work effort going into getting statements, determining what are facts and what is hearsay, getting witnesses to corroborate what you are saying (1 individual is not enough), tracking down statements, getting trade dates and times, assigning an sec investigator, getting judges to sign off on subpoena’s to collect info. Have you ever extracted information from a 50 TB dump of trade data? I could go on, but I’ll stop here.

      1. Without opining on any other aspect of this, sorry but this is not accurate Mr. Conservative. The SEC does not just go after big fish. I can assure you that the SEC has looked into “little guys” and cases of financial blog / message board malfeasance with respect to front-running and coordinated price manipulation.

        Now the SEC may not seek those out on their own, but if complaints are filed the SEC will investigate

    2. Good morning Kaptain Lou; I hope this finds you doing well. While I almost NEVER post anymore due to the same 3 A-Holes I felt it somewhat compelling to chime in on your post from 10/8/2020 at 11:32 PM. You must be a Youngin (LOL) as you stay up late!!!!! I completely agree with Mr. Conservative, as my guess is you will find this experience quite time consuming and very frustrating to say the least. These big Agencies such as the SEC want what I would call the WHALES, not the minnows. About 10 or 12 years ago their was a Venture Capitalist that was in Omaha where I live and he suckered about 100 investors into a company called “Diversified Pharmaceutical Services, Inc”. Long story made short the Venture guy collected some $20 million dollars from the 100 investors and told us how we were going to make a BOATLOAD of MONEY. Just one small problem however: The CEO was an out and out crook and the company NEVER EVEN WENT PUBLIC. I freely give you the CEO’s name: Rudy Williams. An interesting side note I even got a call from our local FBI OFFICE and they conducted a thorough interview of many of the investors in this huge fraud. I even got an attorney and when he looked up the “RAP SHEET” of the Venture Capitalist and the CEO he said Chuck you are wasting your time. He went onto say everybody and his brother was after these scheisters. The last I knew the company had closed their doors and are out of business. It was a very “VALUABLE LESSON” for me and I didn’t have to learn it twice. My point is just this: I think you will find to be a huge waste of your time. By the way I NEVER EVER buy illiquids for two simple reasons: 1. Be prepared to own it a long time as it might be a bitch to get back out of it. 2. They call is an illiquid for a REASON. GOOD LUCK TO YOU.

      1. Hi Chuck,
        Nice to hear from you again. Similar experience with a company Called Tenax and a certain Mike Brown.
        Miss your comments on banking stocks and resort stocks

      2. ChuckP–good to see you. For you interest I have a new forum being installed which will allow all kinds of interaction–including private chat areas where those of similar interest can meet up.

      3. ChuckP – I echo your concerns about this website and have the same as well. However, I am going to ask Tim if he will put up a category called “Pump and Dump” to see if we can discuss a few of these issues. I have been contacted by a number of people that still want me to post – but there are still concerns about a few people on this message board and hopefully they can be addressed.

    3. Lou – if you’re going to be in touch with the SEC think on asking them looking into the HDO bunch at Shrinking Alpha. I have taken close looks at trading patterns around issues they come out recommending and have a strong suspicion that HDO hase been doing a classic pump and dump.

      I have said same on the boards at SA and the reply I get, always from grid’s close buddy, pendy, is that they comply with SA guidelines on disclosure. Which tells me exactly nothing. Because these guys are not RIAs, are not attached to any brokerage, etc., they have zero oversight and, I believe, have used that lack of oversight to their benefit.

    4. Well now, that’s a direction I wasn’t expecting this to go.

      Personally, I think the “problem children” of this site often lack a basic believability. If I could block their comments from the RSS feed, I would. The endless supposed flippings of various preferreds to make a penny here or there… but oh I am just small potatoes, I’m not wealthy. Declarations of things going into the “sock drawer” only to be flipped again and again and again. Announcements of what was bought and sold “on the golf course.” Bragging about alleged battles with people on SA (another site I quit spending time on, again due to simple lack of credibility).

      These folks have, IMO, made this site, and others, far less useful than they could be. But it is what it is.

  55. Not sure if this will be helpful to anyone with children, grandchildren or nieces and nephews, but my only niece recently graduated from college. She has a retirement plan with her employer and is also paying into Social Security. This year I helped her to start a Roth IRA and this past month I provided her with an additional $250 if she would match the funds into the account. This week she was able to pick up 10 shares of MNR-C and 10 shares of UBP-K.

    It is a good way for her to learn about the benefits of having three different sources of retirement income and also to learn a little about the market and preferred stocks at the same time.

    1. Hi KL, I 100% agree with your idea to setup ROTH IRA’s for young workers. Since their income tax rates are low, it is a great time. Only difference is that when we have set up ROTH’s like these, we used REIT commons instead of preferreds. The goal of the account is to fund retirement something like 40+ years in the future. Over that period of time I would expect commons to outperform preferreds. Using automatic dividend reinvestments with hopefully increasing common dividends also is an advantage over preferreds. At a minimum if you use preferreds it should be a brokerage that allows automatic dividend reinvestment. You don’t want to mess with having to reinvest $5 or $10 preferred dividends, even if a zero commission environment.

      1. Tex the 2nd – good point about using common stocks over preferreds. Over time, they will most likely outperform the preferred issues especially with current rates. We actually discussed common and preferred stocks. She is actually pretty conservative and for whatever reason felt a little more comfortable with the stability of preferreds, especially since many of them will be called at par value. As the account grows over the next couple of years, I’m certain there will be a time to add in a few common stocks with a decent history of growth and dividend increases.

      2. When my sons were in high school, I was concerned that they may have too much spending money from their summer jobs, wished to develop a savings habit rather than a spending habit. At the time, I establish Roth IRAs for each and the Bank of Dad matched every dollar that they contributed. Now each has a balance of about 20K in their Roth, one just graduated college, the other is in his final year. The older son is invested in mutual funds, the younger has common, and preferred stocks including a preferred REIT (MNR-C) It has been a good opportunity to discuss investments in general and risks vs reward concepts.

    2. How many REIT’s that are public today were also public in 1976, which is when your 65 year old retiree today graduated college?

      1. Justin asked: “How many REIT’s that are public today were also public in 1976 . . “

        Justin, I count five REITS that are still trading today that were trading in 1976. Most REITS that trade today did not exist in 1976. We can stipulate that IRA’s, ROTH IRA’s, ETF’s, commission free trading and automatic brokerage dividend reinvestment did not exist back then either, so the landscape has changed a lot. The modern REIT industry came alive due to the 1986 Tax Act.

        That said, I am very comfortable allocating a percentage of assets to REITS with a planned holding period of 40+ years. We all agree that the 40 year total return statistics say that a low percentage of stocks will be positive, i.e. most will lose money. So it is a lot more certain to invest in an index, like VNQ instead of individual stocks.

        To my original point, the expected return from common REITS exceeds that of REIT preferreds, so I would stick with that.

        Ignoring that ROTH IRA’s did not exist in 1976 and without hindsight bias, what portfolio would you have constructed for a young person that just started work?

        1. Tex the 2nd – I’m just going to sign off on this message board, but always appreciated your comments. It was good while it lasted. Yahoo Finance was a good board for a number of years, and so was SA, but they have also declined recently. Today we reached a new low on illiquid stocks that are traded once a month, but several posters have now taken over the board – so it is time for me to leave here now. Best wishes to all investors, their families and wish everyone the best in the future. It has certainly been fun here! Huzza!

          1. Wish you would reconsider, kaptain lou. You are one of the few people here whose comments I still value. I have also long been really fed up with the “several posters” you refer to. I know Tim has tried various things to give them a sandbox to babble in but they just don’t get it. They seem to stay out of this article if that is any consolation.

          2. Seconding Larry’s comment, kaptain lou. I’m new to this board, but have valued your comments in the short time I’ve been here. Twenty-two years investing, pfd’s only the past eight of those.

            I actually have a few self-education questions about a few of your posts here. If you’d be open to communicating privately, my email is

            1. Bur Davis – As I mentioned last night, I won’t be posting here anymore, but you are welcome to contact me on Seeking Alpha by private message if you have any general questions on preferreds. Posted a few articles on there and my KL screen name was not professional enough so I’m there as “Early Retirement Advisor” or ERA and it is pretty easy to find me there.

              Wishing everyone here nothing but the best in their future investment decisions and it has certainly been fun here for me. Always appreciated the hard work Tim has done with the website as it has been very educational for many investors. Thanks much!

              1. Just when you got my REIT ears perked up, KL… Sorry to see you go…….Add me to the please reconsider list.

                1. 2WR – it was with great regret that I decided to leave the board. There are so many great opportunities with REITs and their preferreds over the next couple of years – so clearly a difficult decision for me. Many of the posters here may be new to this area and it was always nice to discuss, especially for those that are new to this area. Probably one of my biggest regrets was that I did not help my niece open up a Roth account when she was in her first year of college – but I will help her catch up in the next few years. It is a marathon and not a sprint. But this was clearly an error on my side.

                  Some of the illiquid preferreds may actually be a good investments, but 99% of the of the investors are not able to get into those, so the board has now actually become useless to me and other serious investors. I’ve seen this before on Yahoo and now are here again when several posters take over the board. But I will now allow the board to get back to their discussion on preferreds that were issued 100 years ago.

                  As always, continued success to everyone here as it has been very enjoyable with the discussions. Thanks much to everyone!

                  1. KL, I’m not sure why we can’t have discussions on many topics on this site. There is plenty of room for discussions on REITS, illiquids, high risk, low risk, trading, dividend capture etc. Just because there is some interest in illiquids does nothing to reduce the interest in the other topics. Just food for thought.

                    1. kapil, yes it should be possible to have discussions on many topics. That requires that the various discussions be kept separate. Tim is doing the best he can by having these topic-focused threads. The problem is that certain users (I won’t name names but you all know who, or is it whom) often refuse to make their comments in the right place, often refuse to stay on-topic, often refuse to self-screen their comments for even basic relevance.

                      This eventually happens to all discussion sites. Even if proper forum software is being used, which is not the case here. Tim has largely taken a hands-off approach. Other sites go heavy-handed with moderators screening every comment, and we all know that creates more problems than it solves.

                      I have not posted much here in about 2 years. I read the new articles and I watch comments through RSS feeds. It is very easy to see the same handful of users eventually dominate every single comment thread. They refuse to ask themselves “does everyone need to know that I played golf today, is that relevant to the discussion?”. Or they do ask themselves and decide the answer is yes. Thus threads veer off-topic pretty consistently.

                      kaptain_lou is just pointing what I pointed out 2 years ago. I suggested a daily posting limit of say 5 comments per user. I think that would put a focus on being relevant, at the expense of limiting potentially worthwhile discussion. But as I said, Tim chooses to run things with a light touch, and that’s his right.

                  2. Captain, I dont know where to start, and i will just ramble with my honest comments and thoughts. I read Kapil’s response and that sparked mine. The below is just me typing as it flows… I am not angry… but maybe sad or disappointed?

                    – Do i agree with all posts? all comments? all discussion boards? allowing anyone to join? allowing all posts? I can list about 10 more things here… The answer is no.
                    – You are leaving because you don’t agree with commentators or an idea posted here like an illiquid which is an investment idea.
                    – If everyone had to agree with everyone on every post, concept, thesis, idea, trade execution… that is called confirmation bias. How can you do a risk assessment if everyone agrees with you? This gives you a false perception that your idea is “sound” and there are no risks.
                    – You state a very good anti-thesis against illiquids. Perfect. I was glad to read that as others. But then you post, that you are leaving because you don’t agree with that? What? Thank you for posting your thoughts against the idea, but then leave because of this?

                    Site has a vast wealth of info:
                    – What site can you go to today that has more ideas that pertain to thinking about investment ideas?
                    – Yes it is largely income investing, but Tim has accommodated other ideas with the idea of bringing a broad based set of ideas to a broader audience.
                    – Just look at all the topics
                    – I am hoping that at a worst case scenario, you were saying that you won’t comment any more.. but i think you are doing yourself a big disservice if you meant that you wont be reading anything posted and not coming to this site at all.
                    – Are you saying that you wont visit this site at all, because you disagree with an investment idea? If so.. that is kinda like walking into a Baskin Robbins and saying I don’t like chocolate moca with vanilla swirl and so I’ll be leaving now.

                    A lot of things going on with our personal lives, covid, jobs, working and living things and doing things differently. I was kinda hoping you would post in a few days and say… sorry guys, i forgot my hormone injections or something… i had to get out a rant, and now coming back. We all have those days every year where we get on a soap box or do some rants. Hey, that is ok.

                    You have great ideas and thoughts. If you are planning on living for 20 years +, I just dont understand why you are turning down a great set of people here. Turning down a great set of minds to agree or disagree with you. Turning down a great set of ideas to invest in. Turning down opportunities to where were Tim is going to take this website (when he convinces his wife that we are more important than his day job).

                    I have read your posts for a few years, and you like to educate, teach, show your ideas. The great example you posted is with your niece. I’ll leave you with this. If you are going to be around in this world…. If you don’t post, you cant teach, and surround yourself with like minded individuals. What better site out there than this can you teach people?

                    1. Mr Conservative–I will add ‘illiquid’ thread–maybe that is helpful. Thanks for your input.

                    2. Mr. C I will have to go , work is calling. But I for one wish more people commented on common stocks here not just preferred’s. Yes higher risk but quite a few provide income and some have been around as long as some of the 100 yr illiquids.

                  3. kaptain, I have benefited from your posts through the course of time and appreciate them. I think that many readers feel the same way. I hope you continue to post.
                    Thank you and best regards, No. 12

                  4. Kaptain – I usually would not comment if someone chooses to leave or not. Everyone has their thinking and reasons and I respect that. But I am making an exception and chiming in here

                    1. I have never been one to post daily. I chime in when I feel it is pertinent. I know others like to chat more. Not saying either approach is wrong but sometimes the volume of posts, especially if on a subject one is not interested on, does get high.

                    2, I own some illiquids, have for many years. But they are not suited for everyone and I think your concern is that some readers may not fully understand them and their potential risks which is commendable.

                    3. There are areas of the board – like Canadian securities – I don’t care about at all. As long as those discussions are kept on that page it is easy to bypass them.

                    4. Kudos for Tim for adding a new page dedicated just to illiquids. Hopefully all illiquid discussion can be put there so it makes it easier for people to navigate to subjects that interest them.

                    5. As a fellow REIT investor, I hate to see someone who is also very knowledgeable about Reits leave. Especially since there are not a ton of people posting about Reits here. Hopefully with the change Tim has made, that alleviates some of your concern and you reconsider. However, you have to do what you think is right

                    All the best

              2. Sorry to see you leave, KL. As 2WR says, hope you will reconsider.

                Wishing you the very best in life & Investing.


                1. Lou, you know how much I value you and Tim and have expressed such many times. Of course I follow you on SA. I hope when time allows you write more there or maybe start a monitored blog series as a contributor to SA where we can gather. maybe call it “REIT CHAT BLOG” ..I was part of a blog chat there but it devolved into politics and covid and name calling as is the case so often over there anymore like Yahoo was.. Your years as an investor and CPA provide insight that most do not!

                  An active participant on III early on, and a user of Yield Hunter from the start, I have become more of a lurker for many of the reasons you point out. I notice a lot of early adopters here are gone.. well maybe they lurk.. the site is just a source of reference for me now
                  As far as your niece’s investment goals, you expressed ‘conservative’ and a nice 6-8% from a pfd over time or until she feels her investing oats is beyond appropriate in the bubble we live in for stocks and bonds. ANY registered investment advisor or new stock account requires you to express your goals when opening an account to allow you access to a group of investments, options, margin etc. SO you are respecting her wishes.. again in perilous times to preserve and grow capital.
                  Following your advice as someone who could retire early, a CPA who does a deep dive into any invesment- and with so many years of expertise will benefit her for sure. See you on SA where thankfully there is a mute button! Bea

          3. kaptain lou–sorry to see you go…watch in the future for a new commenting add in, that will maybe help you resolve whatever concerns you might have.

            1. Tim, your dedication to making the site as useful as possible for different people’s needs and interests is really fantastic. Thanks again for all the work you put into it.

  56. Also, for the REIT investors that like the sector and are willing to take a risk with a few companies, I’ve been buying these positions in the past few weeks:

    BFS common with a nice yield over 7%. However, I’m a buyer under $26.

    WSR common with a yield of about 7% as well, but only a buyer at $6.

    1. I snagged some BFS too, Lou, at 24.75. As we have discussed on SA, I like these mostly family owned strip/grocery anchored properties and like UBA/UBP as well and the pfds on both co’s. Saul goes xd 10/15 for .53. They have maintained the div and regardless if they tweak or cut, the properties are great.

      1. Bea – you have me beat by about $1 on the entry point, but I’m really not complaining! Both Saul and the Urstadt properties have great locations, super-high family ownership and the real estate is clearly not worth 50% of what it was a year ago. BFS does have some properties located outside the D.C. metro area, but every one of their locations (about five) in Florida is anchored by Publix, which has no debt. It is possible there could be some type of cut on BFS, but I’m expecting an increase in the next year on the UBA shares, so hopefully it will equal out.

        There is no way I would ever consider buying a perpetual preferred with rates in the 4% area now when there are so many other good opportunities.

      2. I’ll toss in the RPT-D preferred for consideration, currently yielding 9% (it also could potentially convert before the heat death of the universe).

        1. Qniform – I actually have a few of the RPT-D shares as well that I bought in the mid 30’s, but just a very small position in my higher risk area. Thanks for mentioning.

    2. Kaptian Lou. Thanks for keeping the discussion going. For other good 6%ers on common. Have to Like NNN. I own common and preferred. How do you feel about the Taubman preferreds. I used to own them. The buyout is going to court I guess in NOV but have to figure it will be settled. Their balance sheet is confusing because of the joint ventures but can’t think the family will still want get paid on the common and preferreds even if sale doesn’t happen. Mall are a mess but any value in the preferreds?

      1. SDMarc, the NNN preferreds were one of my long-term favorites and held them for years. Currently I don’t own any of the F shares because the coupon rate of 5.2% was a little low for me, but still a very, very solid holding. The common stock is probably undervalued now and they also have a great (and conservative) management team.

        At least for me, I am currently avoiding anything in the mall sector and this would include their preferreds – so at least for me I am not a buyer of TCO preferreds. Overall, I think there is just too much risk, especially when you can buy up quality companies like your NNN at reasonable prices. When I talk about “mall” stocks, I generally consider them to be companies that generate most of their revenue from clothing retailers, so I avoid anything having to do with SKT and SPG as well.

    3. kaptain lou,
      Just saw that insiders bought $ 500,000 of stock at HIGHER levels !.
      I just picked up a 500 shs in WSR at 6.33.
      I will add more, but I have more commons of Reits than ever before.
      The Common does offer more growth than the Preferred.
      Thank You

  57. While I certainly understand that investors have different income criteria based on their age and risk tolerance, I’m having a pretty good time in REIT preferreds and may write an article on SA in the next few weeks (as time allows) just to discuss some investments in the 6% range. Actually, it is still fairly easy to get returns like this if investors have a diversified portfolio. Currently I probably hold close to 40 issues. Here are some of my REIT preferreds at the present time and they clearly beat the PSA issue that was below 4%, although the credit quality of PSA is incredible.

    GOODN – right around 6.5%
    MNR-C – I like this 6.15% yield with their top tenants
    BFS-E – just a little over 6% now and they just went ex-dividend
    UBP-K – nice small company just a little over 6% now

    1. Thanks Kaptain,
      For my parents, I’ve picked up GOODN, MNR-C, and UBP-K based on your earlier comments. I’ve begun to make small purchases of BFS, UBP and REG in tax-deferred accounts. As mentioned earlier, my real estate is mostly TIPWX, but after doing some additional digging I think they are worth adding to. Your comments (and SDMarc) are very much appreciated.

      1. Mrinprofet, I actually do a little income advising for my brother and niece and I have them owning the same preferreds that I do – similar to what you are doing with your parents. Just helped my niece start up her Roth IRA (she has just finished college) and thought some good stable 6% returns in a tax-free account would be good for her. For me, as I retired early, the yields on those securities provide me with a stable income during retirement as I don’t have a traditional pension or social security.

        Also, carefully selecting a portfolio of common REIT stocks that I feel are undervalued at the present time. Probably will pick a portfolio of about a dozen of those, but know that all my selections will be winners. At least for now, it is amazing to see some of those securities trading at a 50% discount to where they were a year ago. The process will be slow, but should provide good returns (including dividends) over the next several years.

  58. To all investors here, I do look at some of the REIT articles on SA, just to get some information and sometimes they are helpful. Today, I saw this article posted by Brad Thomas, the guy that claims to be the REIT guru. Here was his post from earlier today. But here is my question: why in the hell would any investor take financial advice from someone that has a loss like this? It was posted on his Brookfield Property article from today. I weep for the SA posters that take his advice.

    Full disclosure – I have a personal NOL that is just under $2 million…. and when I was a developer I paid millions in property taxes and also created hundreds of jobs.

    1. Kaptain Lou,
      Thanks for the helpful comments on REITS and their preferreds. I’ve been following Brookfield for a while and bought into BEP, BIP and BPYU. Unfortunately, I started nibbling on BPYU around $18 a couple years ago and then watched it get cut in half recently. My mistake. I did purchase full positions of BEP and BIP very near market lows in March of this year, so have been very happy with that. After BPYU, I did some digging and realized that the return profile I was looking for was more NCREIF and less NAREIT. I invested 5% (normal position for me is 2.0%) in TIPWX (Bluerock Total Income interval fund). I liked that it was largely institutional partnerships, focused on apartments and industrial sectors, and low leverage (27%). My timing was poor… as I did it Jan 1 of this year, but the performance has been good on a relative basis.
      With the market rebounding, there’s very few commons that I’ve found interesting but REITs still look like there are pockets of value, which is where your comments come in. Thank you.

      1. mrin – I’m not really familiar with the Brookfield properties, but think their leverage and debt is fairly high. At least for now, there still remain some pretty decent values in the REIT sector both with common and preferred shares. PSA recently issued a new one with a rate less than 4%, so I will just stick with my 6% yield on MNR-C for now. It should be a stable investment because it can be called next year. Wishing you continued success with your investments.

  59. After doing a longer term deep dive I took an large position (for me) in three “grocery anchored” shopping center REITs. (REG, ROIC, and UBA). I think the public markets are more off the mark in this sector than any other at the moment (30-50% under real NAV – real because these type of assets are still in demand). There are others like KIM in this space and they mostly seem to trade in tandem looking at past history but my three are the only “pure plays” in this category. The others have added more power centers and are venturing in to other asset classes over the past few years (ie mixed use, residential, etc). Anyone else have thoughts on these. Thanks

    1. SDMarc, I agree that the grocery anchored shopping centers have been beaten down way below NAV as well, as many of them have great locations and the properties can be used for various purposes. In the past few months I’ve gone long on UBA and BFS common stock because I feel they are undervalued. Not followed REG and ROIC very much in the past and went with the other two because I have followed the companies and owned their preferred stock for a number of years. Not really a fan of KIM, as some of their properties have a number of retailers that look somewhat weak to me.

      1. Kaptain Lou-
        Thanks for feedback. REG and ROIC are both investment grade so they have very low cost of funds in this environment. ROIC (they temp suspended dividends which I am OK with now) owns 80 similar grocery anchored centers on the West Coast as UBA owns in NYC metro area (I think B/B+ quality but in areas that hard to build more). REG owns 400 centers nationally in best markets but has keep their full dividend intact and plans to keep it that way. REG properties seem to me to more A/A+ quality (10 locations in my market and all top quality). Both REG and ROIC also have almost no mortgages on the properties which gives them more flexibility. I also own BFS preferreds but harder for me to handicap the common because of change of focus to “transit” oriented large mixed use development projects. They seem to be doing OK with the new projects so far and actually might help the common over time because the market hates retail but also more question marks. Thanks for all your insights on these pages.

        1. SDmarc – thanks for your comments as well. I’m out here on the east coast and close to Gettysburg, PA, so I do try to buy some grocery anchored REITs where I know the territory and the tenants. Overall, Ahold is a good tenant and so is Weis Markets (WMK) because they have no debt. In the south, BFS does have some centers, but they are anchored by Publix and they have no debt as well and are employee/employer owned. Yes, BFS is moving into some other areas, but they are right outside of the metro area in Washington DC and Maryland has the highest per capita income of any state.

    1. Both BRG-A and C went x-div today and shares bot now won’t be subject to call… yet BRG-C 7.625% is at 25.30 and BRG-A 8.25% is at 24.97 last… Go figure…… BRG-C isn’t callable until 7/21

  60. If you like REITs and if you like Monmouth REIT, you might like this article
    appearing today in NAREIT. I did.