REITs may look south as new lower-growth reality sets in<\/a><\/li>\n<\/ul>\nAnd for CREIT unit holders, the ride was a good one: $10,000 invested in September, 1993 was worth $229,000 at the end of last year and $261,000 when the plan of arrangement was completed last week. Those numbers show the magic of compound interest, which has been described by many, including a certain Albert Einstein, as the \u201ceighth wonder of the world.\u201d<\/p>\n
For most of the more than 21 years that Downey followed CREIT, the stock was rated as an outperformer or a buy, but for a short period around the 2008\/2009 financial crisis.<\/p>\n
In a report, Downey reflected on four lessons that were learned from investing in this REIT as well as investing in general:<\/span><\/p>\n\n- Good governance cannot be regulated or legislated. Instead, he argues, that it must be part of an entity’s “DNA.”<\/li>\n
- The power of compounding over time is the \u201cmost important force in the accumulation of wealth.\u201d And that compounding is made easier through leverage, which can occur when the issuer offers a dividend reinvestment plan (DRIP.)<\/li>\n
- It takes a \u201clot of time, patience and operational execution\u201d to build a good quality REIT capable of delivering \u201cindustry leading returns.\u201d<\/li>\n
- A REIT is usually a good investment if it is trading below NAV.<\/li>\n<\/ol>\n
While CREIT is gone as a public company, some of its unit holders can still enjoy the benefits of the assets held by the new merged entity. In the merger, they had the choice or receiving $53.75 in cash or 4.28365 Choice Properties units for each CREIT unit held \u2014 or some combination.<\/p>\n
It seems that most of the CREIT holders opted to receive units in Choice Properties. By Downey\u2019s calculations, about 43 million units were exchanged for units in Choice Properties.<\/p>\n
So who is the next CREIT? In other words who are the other issuers, which are good at creating long-term value. Downey mentioned four: CAPREIT; Allied Properties REIT; First Capital and Brookfield Asset Management.<\/p>\n
Financial Post<\/em><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"
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