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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: David Jones who wrote (5948)	10/8/2002 12:10:19 AM
From: Elroy Jetson	Respond to of 306849

REIT's have to pay out 90% of income to the shareholders, right? Assuming there is any income. In real estate down-turns REITs have a bad habit of suddenly suspending their dividends. In the short run, REITs often borrow to pay their dividends when things slow down. You often find out they've been doing this at the same time that they announce the suspension of their dividend. Unforseen changes in the market etc, etc. For the past 12 months almost every developer in the country has been selling their dogs to REITs. Demand for REIT shares is strong and the people who manage them aren't particular how the money is put to use. I think the surprise comes sometime in the next 12 months. I'm sure they're already borrowing to pay the dividends.