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1. Realty Income Corp. (NYSE:O)
• Share Price: $52.05
• Dividend Yield: 4.37%
• Frequency: Monthly
• Type of real estate
investments: Retail
2
April 8, 2015
• Realty Income owns more than 4,300 retail properties
• 98.4% occupancy rate, which has never fallen below
96%
• Tenants sign long-term leases (15 years or more) with
rent increases built in, and pay variable expenses such
as taxes, insurance, and maintenance
• Since going public in 1994, Realty Income has increased
its dividend 80 times, by an average of 4.7% per year
• Average annual total returns of 17.1% over the past 20
years
• Largest tenants are Walgreens, FedEx, and Dollar
General
April 8, 2015
3
Realty Income Corp (NYSE: O)
2. American Campus Communities (NYSE: ACC)
• Share Price: $43.36
• Dividend Yield: 3.51%
• Frequency: Quarterly
• Type of real estate
investments: Student
housing
4
April 8, 2015
www.audio-luci-store.it via flickr
• American Campus Communities builds and operates
student housing communities
– Currently has 163 properties in 74 university markets
• Target market is 4-year public institutions with enrollment
greater than 15,000
– 3 largest markets (by income) are Arizona State
University, University of Texas at Austin, and Texas
A&M
• Average occupancy rate of 97.7% and average rental
growth of 2.4% annually
• Seeks growth through acquisitions, as well as through
development of new properties
April 8, 2015
5
American Campus Communities (NYSE: ACC)
3. Chambers Street Properties (NYSE: CSG)
• Share Price: $7.92
• Dividend Yield: 6.44%
• Frequency: Monthly
• Type of real estate
investments: Industrial
and office properties
6
April 8, 2015
Source: wikipedia
• Chambers Street’s portfolio consists of 42% industrial and
58% office properties
– 128 total properties with nearly 38 million rentable
square feet
– The portfolio is geographically diverse, as well as
diversified across different industries
• 98.3% occupancy rate
• Has been focused on debt reduction and selective
acquisitions of new industrial properties
• Most tenants are on “triple-net” leases, which means they
pay taxes, insurance, and maintenance as part of the rent
• Top tenants are Amazon.com, Barclays, and Raytheon
April 8, 2015
7
Chambers Street Properties (NYSE: CSG)
4. Annaly Capital Management (NYSE: NLY)
• Share Price: $10.45
• Dividend
Yield:11.48%
• Frequency: Quarterly
• Type of real estate
investments: Agency
Mortgages
8
April 8, 2015
Source: 401kcalculator.org
• Annaly invests in high-quality, agency guaranteed mortgages
– Most of the portfolio (95%) consists of fixed-rate
mortgages
• In order to produce high returns, Annaly uses leverage
(borrowed money) to finance its investments
– The company’s profit is the “spread” between the interest
rate it pays and the interest rate is collects from the
mortgages
– Current leverage ratio is 5.4:1
• The downside is that this business model is very vulnerable to
interest rate spikes, since that can cause the spread to narrow
• Shares currently trade for a 20% discount to book value
April 8, 2015
9
Annaly Capital Management (NYSE: NLY)
5. PennyMac Mortgage Investment
Trust (NYSE: PMT)• Share Price: $21.34
• Dividend Yield:
11.43%
• Frequency: Quarterly
• Type of real estate
investments:
Distressed mortgages
10
April 8, 2015
• Unlike most mortgage REITs, PennyMac primarily
invests in distressed mortgage loans
• Since distressed mortgages can be bought at a discount
to underlying property values and pay higher yields,
PennyMac can produce high dividends without much
leverage
– Current leverage ratio is 2:1, unlike most mortgage
REITs which use 5:1 or higher
• PennyMac has increased its dividend consistently since
going public
– Dividend has risen 7% over the past two years
April 8, 2015
11
PennyMac Mortgage Investment
Trust (NYSE: PMT)
6. Health Care REIT Inc (NYSE: HCN)
• Share Price: $77.83
• Dividend Yield: 4.24%
• Frequency: Quarterly
• Type of real estate
investments: Health
care properties
12
April 8, 2015
Photo: pixabay
• Health Care REIT was the first of its kind, founded in
1970
• Currently owns more than 1,300 properties with an
enterprise value of $37 billion
– Properties include senior housing, LTC facilities,
medical offices, and more
• Great growth opportunity, as the 75+ population is
projected to grow more than five times as fast as the
overall U.S. population
• Strong balance sheet, good access to capital
• 16.1% average annual return since inception
April 8, 2015
13
Health Care REIT Inc (NYSE: HCP)
7. Digital Realty Trust (NYSE: DLR)
• Share Price: $65.84
• Dividend Yield: 5.16%
• Frequency: Quarterly
• Type of real estate
investments: Data
centers
14
April 8, 2015
Photo: wikipedia
• Digital Realty Trust owns data centers in America,
Europe, Asia, and Australia
• The company maintains a conservative capital structure,
and has investment-grade credit ratings
• Dividend has increased at an average rate of 14% per
year
• Diversified group of high-quality tenants
– No single tenant represents more than 7.2% of
revenue
– Major tenants include CenturyLink, IBM, Facebook,
AT&T, and Morgan Stanley
April 8, 2015
15
Digital Realty Trust (NYSE: DLR)
16
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