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 Real Estate Investment Trusts.
Real Estate Investment Trusts enable investors to pool their capital to invest in real estate with limited liability. Real Estate Investment Trusts 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 Real Estate Investment Trusts can enhance a portfolio's return and reduce risk. In addition, because Real Estate Investment Trusts are not strongly correlated with other asset classes. The resulting increase in diversification reduces risk.
REIT Investment Strategies
The approximately 200 publicly traded Real Estate Investment Trusts (REITs) are typically categorized by the nature of their real estate investments. They include:
- Apartment Real Estate Investment Trusts
- Industrial Real Estate Investment Trusts
- Healthcare Real Estate Investment Trusts
- Office Real Estate Investment Trusts
- Hotels / Lodging Real Estate Investment Trusts
- Shopping Center Real Estate Investment Trusts
- Diversified Real Estate Real Estate Investment Trusts
- Net Lease Real Estate Investment Trusts
How Cutler Capital Management Invests in REITs
Generally, we are avoiding many of the higher priced office, mall and industrial Real Estate Investment Trusts and are focusing on Real Estate Investment Trusts 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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