Buy Now for Huge Discounts and Dividends

Since the end of the Great Recession, commercial real estate, and the real estate investment trusts that own those buildings, have performed marvelously. Residential, medical and even retail properties have experienced high rent growth and cap-rates as the economy has climbed out of recession. Likewise, investors in REITs have experienced similar gains. The broad iShares U.S. Real Estate ETF (IYR) is up 42% over the last five years.

For the office REITs, only one thing matters. Jobs. After another recent bullish jobs report, the purveyors of cube farms and other office buildings are now finally hitting their stride. Hiring is up and the July jobs report marked the 65th consecutive month of private sector employment growth. Analysts are now pegging that unemployment should hit 5.2% by the end of the year. So for investors looking for REIT values, office building owners provide an optimal blend of attributes: Easterly Government Properties (DEA), Kilroy Realty (KRC) and First Potomac Realty Trust (FPO).

Source: InvestorPlace

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