These REITs operated by founding families may make great investments

Industry Observer

Real estate investment trusts offer an excellent way to get into real estate by investing in several properties instead of just one or two. REITs can be less risky, and they make it easy to invest in real estate because they are traded on stock exchanges.

But how do you know which REITs would make great investments? Studies have shown that companies which are still operated by their founders or their founders' families tend to be more innovative and offer higher returns. Thus, we can look to the Entrepreneur Index for help picking REIT stocks to invest in. 

Simon Property Group

One of the more well-known companies is Simon Property Group, which invests in malls. However, not everyone is aware that it is organized as a REIT. Malls have been going downhill with the increase in e-commerce, especially during the pandemic. However, as the economic recovery picks up steam, malls will make a comeback.

Investors have already been betting on Simon Property Group rebounding, as its stock has been rallying since November. The only downside to this stock is that you don't want to wait too long and miss out on the rest of the rally. 

Boston Properties

Like Simon Property Group, Boston Properties has also been rallying since November. The company the largest publicly-held developer and owner of Class A office buildings in the U.S. Boston Properties is concentrated in Boston, Washington, D.C., New York City, Los Angeles and San Francisco. 

The company shares another similarity with Simon Property Group. During the pandemic, most office workers had to work from home, which negated the need for office space. However, as things start opening back up, most employees will be returning to the office. Thus, the economic recovery and ending of lockdowns also offer opportunities for Boston Properties.

Choice Properties

Choice Properties isn't operated by its founding family, so it is the one exception on this list. Choice Properties is Canada's largest REIT and mostly owns properties anchored by Loblaw Companies, the largest grocery store chain in Canada. 

The REIT was formed when Loblaw announced in 2012 that it would spin off most of its real estate properties into a REIT. The move enabled Loblaw to monetize its real estate holdings and use the proceeds to invest in its grocery business while taking advantage of the REIT structure. Choice Properties started trading on the Toronto Stock Exchange in 2013. 

Loblaw initially transferred more than 400 properties to the REIT, representing 75% of its real estate assets. Choice Properties acquired Canadian Real Estate Investment Trust in 2018, becoming Canada's largest REIT. After the transaction, the company's assets consisted of 78% retail properties, 14% industrial properties and 8% office space.

Buttonwood Property Management

As an alternative to REITs some high-net-worth clients already have their own real estate portfolio, or want to hand pick their own real estate investments yet don’t want to property manage real estate assets on day to day basis. Then you can hire a commercial or residential property management services company to take care of the headaches for you. Buttonwood Property Management in Toronto is a family owned and operated company since 2012 and has been consistently named the best rated property management company in Greater Toronto Area.

Comments (3)

Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for sharing your experience and your advice.

Have a productive month.

Mar 12, 2021 08:41 AM
Winston Rowe & Associates CRE Investing Financing
Winston Rowe & Associates - Saint Clair Shores, MI
No Upfront Fee Commercial Loans

Nice post

Mar 12, 2021 02:15 PM
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Aug 02, 2021 08:41 AM