REITS - Buying 1 - 2 weeks before going ex-dividend Message Board

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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend

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To: Ken Reidy who wrote (1920)	8/17/2000 6:20:03 PM
From: Richard Barron	Read Replies (2) of 2561

Ken, When a REIT is in default of it's banking relationship, it's very risky. Some bounce back, others like MT, ETT, PRT, PZN lost 95% or more at their lows. NHI is probably worth $10-15 or more based on the properties, but if nursing homes are all losing money and they are in default of their covenants, they may be paying 2 or 3 points higher in interest as well as some fees. In addition to some tenants in trouble, this can kill cash flow in weeks. I am looking at VTR who cut their dividend a year ago or so, and now looks very stable even though their major tenant's finances are in dire straits. This gives me hope that there is a bottom unless the REIT does stupid things like lend money to their tenants who are falling behind rent payments without securing this properly ( I think ETT and GLR both fell in this category). Jim, I am starting to trade GTA around 14 tomorrow. It looks like a bottom is near, but it's a little early to tell so far. I think it is oversold, but I would be surprised to see an upside greater than 2 points above the lows for the next few months. Richard

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