Three REITs Flying Under the Radar
But the smaller players are growing, too, and deserve some attention. In particular, three smaller Triple Net REITs are flying under the radar. Investors may want to consider them. (Triple Net REITs, a relatively new area, refer to property owners whose tenants agree to pay real estate taxes, building insurance and maintenance costs (the three nets), in addition to rent and utilities.)
Gramercy Property Trust
Gramercy is the smallest Triple Net REIT in the Triple Net or Industrial sectors, and it doesn't pay a dividend, which is unusual for a Triple Net REIT.
Still, Gramercy has been one of the top performing equity REITs this year. Year-to-date, it has returned over 58%, and based on its recent accelerated growth, I expect a dividend will come soon. I think the stock - trading around $4.70 -- is undervalued, and could grow by 25% this year, based on a peer multiple of 16 times price/funds from operation.
Agree Realty Corporation
Agree recently announced a first-quarter dividend of 41 a cents a share, up from 40 cents previously. It is fairly valued with a P/FFO multiple of 14.7x. and carries a healthy 5.33% dividend yield.
Finally, in May, I wrote about Chambers Street Group
Since the listing, Chambers Street has dropped below $9, a sound entry point. The market cap is about $2.1 billion, and the P/FFO valuation of 15.1x is in the fair value range.
At the time of publication, the author owned shares of Realty Income.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.