Real Estate Investment Trusts (REITs)
Founder Mel Cutler has been involved in the commercial real-estate industry since 1954 and founded Cutler Associates, an architecture, engineering and contracting firm, in 1972. He has applied his knowledge of real estate to shape Cutler Capital's approach to researching REITs.
REITs enable investors to pool their capital to invest in real estate with limited liability. REITs can avoid double taxation of dividends, because they are exempt from income taxes if they distribute 90% of their taxable earnings.
The dividend income from REITs can enhance a portfolio's return and reduce risk. In addition, because REITs are not strongly correlated with other asset classes. The resulting increase in diversification reduces risk.
REIT Investment Categories
The approximately 200 publicly traded Real Estate Investment Trusts (REITs) are typically categorized by the nature of their real estate investments. They include:
- Apartment REITs
- Industrial REITs
- Healthcare REITs
- Office REITs
- Hotels / Lodging REITs
- Shopping Center REITs
- Diversified Real Estate REITs
- Net Lease REITs
How Cutler Capital Management Invests in REITs
Generally, we are still avoiding many of the higher priced office, mall and industrial REITs and are focusing on REITs within the healthcare and hotel sector which demonstrate stronger fundamentals and more reasonable prices.
Companies we follow include: Ashford Hospital, Nationwide Health Properties, Host Marriott, Wind Rose Medical Properties Trust, and Health Care REIT, Inc.
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