The headquarters of the Woodlands Division, at least,. Of course, some timberlands were. Woodlands then would have. Woodland Divisions not the headquarters,. The lower end. The upper. National firms with timberland managed across the country. Eastern and Western Divisions. Companies with. There is one strong influence on location that is not apparent. Historical de-. For example, the pulp an d paper industry developed in.
Those locations. Many of the very early. So history has aided in aligning these division locations. Most of these Woodland Divisions no longer exist. While Woodlands. Divisions were operational offices that directed large organiza-. Locations have. The history of these locations is an important part of forest. It tells a story.
Timber was a vital natural resource that. Its history helps tell. Bettinger, P. Burlington, MA: Academic Press. Binkley, C. The rise and fall of the timberland investment. Washington, DC: Pinchot In-. Journal of Forestry, 9 4 , Block, N. Industrial timberland divesti-. Chapman, H. Forest management. Albany, NY: J.
Clark, S. From Diamond International to Plum. Creek: The era of large landscape c onservation in the Northern For-. Maine Policy Review, Clutter, M. Strategic factors driving timberland ownership changes in the U. Diamond, J. Mergers and. Forest Products Journal,.
Davis, K. Forest management: Regulation and valuation. Davis, L. Forest management: To sustain ecological, economic, and social. Fiacco, J. A brief TIMO backgrounder. Summerville, SC:. Fu, C. Timberland investments: A primer.
Brookline, MA:. Gunnoe, A. Financialization, shareholder. Critical Sociology, 7, Harris, T. Forest Landowner, 66, United States timberland. Athens, GA:. Hickman, C. Irland, L. Maine Policy Review , Innovative forms of timberland. The Consultant, 34, Lehman Brothers Collection Great Northern Nekoosa Corpora-. Leuschner, W. Introduction to forest resource management.
McCann, P. Meyer, H. Forest management 2nd ed. Strategies for corporate tim-. Journal of Forestry, 80, Recknagel, A. The theory and practice of working plans. Sampson, N. Changes in forest. Alexandria, VA: The. Smith, W. Steeves, B. Special Collections: Guide to the Great Northern. Paper Company records, history. Orono, ME: University of Maine,. Stein, P.
Trends in forestland: Ownership and conservation. Straka, T. Does your client own timberland? Financial Advi-. Timber Harvesting Wood and woodland directory. Yin, R. Industrial timberland: Current situation, holding rationale, and future. Forest Products Journal, 48, Zinkhan, F. Timberland investments: A portfolio perspective. Portland, OR: Tim-. All rights reserved. Advances in Historical Studies This is an open ac cess article distributed under the Creative Commons At- tribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
They were an important owner, with some of the most productive and intensively-managed timberlands in the country. Beginning in the s, other investors realized the value of timberland assets and actively pursued ac- quisition of the forest products companies and their timberland assets. Mergers and acquisitions were common within the industry as a means to discourage takeovers. These timberlands were traditionally managed by woodlands operations located near the mills.
These operations defined classic timber towns, with names like Crossett, Georgetown, Bogalusa, a nd Millinocket becoming syno nymous with the mill and the woodlands. Woodlands operations are nearly extinct as few mills still own timberlands; what might remain is a small wood procurement organization at the same location. These woodlands operations were an important part of forest history and their locations provide much insight into the historical pat- terns of industrial forest management.
Major forest industry woodlands operations are identified by geog- raphy and size as a means to record a fading historical artifact of forest history. At the peak of its timberland ownership in the late s and early s, the vertically in tegrated forest products indus- try owned nearly Today, the industr y owns approximately 9 mil- lion ha.
Some of the timberland was spun off as separate entities; real estate investment trusts REITs that just held the timberland asset. General investors own about 1 million ha of the former forest industry lands Harris, 20 07 and institutional investors, timberland investment management trusts TIMOs own ap- proximately Transactions are still taking place, some of them very large, and areas owned are constantly changing.
It is safe to say that the timberland owned by the vertically-integrated forest products industry has decreased by at least two-thirds and that the trend for divesti- ture of timberland by forest industry is continuing Stein, What remains of forest industry are the smaller firms, many of them family-owned. First, the forest industry firms realized that the security of owning timberland to ensure a constant supply of raw material was an illusion. Ample raw material was av ailable on the open market, including over- seas, and often this supply was cheaper than the locally-pro- duced one.
Much of this timberland was prime fo r development and these new ownership vehicles provided more profitable ways to develop properties. The main reasons forest industr y sold timberland were 1 the need to increase shareholder retu rns; 2 the need to reduce debt, especially those firms that acqu ired other firms with debt fi- nancing; 3 firm restructuring to increase tax efficiency using REITs and subchapter S corporations; 4 tax strategies that T.
STRAKA allowed for reduced capital gains taxes; and 5 recognition that timber supply security was not as important as assumed in the past the market would supply plenty of timber and land could be sold with timber supply agreements for the mills Clutter et al. The catalyst was when timberland was identified as an un- dervalued asset that could be split off from the larger company for a profit Binkley, By the early s a climate of hostile takeovers emerged and forest industry companies developed defensive strategies like limited partner- ships holding the timberland assets Binkley et al.
The rise of TIMOs also started in the s with several pension funds diversifying into timberland investments Bink- ley, The TIMO provided the acquisition and manage- ment services for portfolios of timberland for large institutional investors like pension funds and insurance companies.
At the same time some forest product companies divested of their timberland, putting it into subsidiaries that traded separately. Tax advantages also favored those that had timberland in sepa- rate real estate investment trusts REITs. Both trends com- bined to separate timberland from the forest products compa- nies Irland, Irland and Howard saw the increased activity in timber- land ownership exchange resulting from issues like fiber supply control, timberland as collateral , timberland for investment, and timberland as a source of capital.
As this transition played out, several major mergers and acquisitions took place in the indus- try Diamond et al. Timberland emerged as an attractive nontraditional asset class. By the first institutional investment in forest industry timberland began Fu, Toda y, none of the larger tradi- tional woodlands operations exist.
A few of the smaller ones still exist for now. The geographi cal locations of these opera- tions correspond to the general location of forest industry tim- berlands. Woodlands operations are described in terms of size timberland area owned and location. Forest industry had a huge impact on American development and these locations continue to have significant hist orical ties to the former dominant forest products industry.
Woodlands Operations What was the traditional woodlands operation? It was the operational management unit for a large block or area of tim- berland. It represented the forest management structure for administering that large area of timberland. The structure tended to be decentralized with managerial authority radiating out to area offices and down to district offices. A woodlands operation could be small perhaps 20, ha to very large perhaps , ha.
Obviously, decentralization had to in- crease with overall size. Each operation had a headquarters office, for logistical reasons often located centrally to the tim- berland, that would report to a corporate or division headquar- ters. American forestry has Central European roots and a strong administrative structure has always been a starting point in forest management.
The earliest texts centered on a German framework of central control Recknagel, An entire sec- tion of an early forest management textbook was devoted to forest organization Chapman, , with chapters devoted to subjects like principles of forest organization, evolution of for- est organization, organization of a large forest enterprise, ac- quisition and consolidation of forests, boundaries, the coordina- tion of land uses, the subdivisions of the forest area, and plans for development of the forest.
Woodland operations tended to be very similar in appearance and structure; this was not a co- incidence. Foresters were taught organizational structure from the same textbooks and differences were few. The earlier textbooks were very detailed on setting up administrative structure, as it was a task that was a very current need. These components comprise a woodlands operation. This result is ac- complished by giving subordinate executives all the responsi- bility they can bear and depending on inspection to see the work is properly conducted.
While he does not call his organization a wood- lands operation, that is what he is describing. The southeastern opera- tion has a land department with a nursery supervisor, equip- ment supervisor, and survey engineer and a wood procurement department with superintendents and field representatives. Plus, the southeastern woodlands operation has a technical department forest inventories, research, and cruising and ac- quisition control and conservation public relations depart- ment.
The Lake States woodlands operation has a chief forester forest management, silviculture, acquisition, inventory, wood quality and scaling, forest engineering, nursery, and forest pest problems. In addition, the Lake States operation has a produc- tion superintendent with district foresters responsible for both land management and wood procurement , a forest products marketing manger, and a plant and equipment superintendent. Careful analysis of the various job functions will show both organizations accomplish ex actly the same tasks.
Work load and the kind of total organization are two of them. These were the considerations that went into development and location of woodlands operations. Note that many had wood procurement departments attached or integrated into the woodlands department. The mills may have sold the timberland and gotten rid of the woodlands operations, but many retained the wood procurement operations. Thus, many of these loca- tions still have timber-related operations. That is just part of the interesting history of this large forest products industry transition.
Geography of the American Forest Geography plays a large role in determining the locations of woodlands operations. Many operational factors were just dis- cussed that impact location. But there is one large factor that breaks the operations into large geographical regions.
The American forest based on tree sp ecies and forest composition is broken into a northern, southern, and western forest. Latitude divides the northern and southern forest, with the Appalachian Mountains allowing some northern tree species to expand their range into the South. The Great Plains separate the eastern and western forests. Then commercial factors like transportation costs, markets, geographical barriers the Great Lakes, for ex- ample , natural transportation routes the Mississippi River and the Great Lakes again , and native tree species further define the geographical regions of thes e operations.
The northern and southern forest shows up quite well, with the darker Appalachian Mountain hardwood forests extending into the South. The Lake State forests stand out well and the western forests show the large timber volumes i n the Pacific Northwest. Woodlands operations will be characterized as northern, south- ern, Lake States, or western. Figure 2 illustrates the pattern of industrial timberland hold- ings in the contiguous United States.
The northern, southern, Lake States, and western forests are even more obvious on this map. Western timberlands are also distinct, even the concentration of timber- land in the Pacific Northwest st ands out. The eastern timberland is distinct, but the division be tween north and south is not ob- vious. The historical Mason-Di xon line is a logical place to divide the two.
The southern border of Pennsylvania is part of that line. The most recent RPA data does not break out the industrial timberland. It uses a category of private corporate that includes all timberland administered by entities that are legally incorpo- rated.
REITs are also incorporated. TIMOs and many other types of forest hold- ings are also incorporated. Much of the old forest industry land is still in this category, as it moved from incorporated forest industry land to incorporated other timberland. The breakdown of private corporate land provides insight into timberland own- ership. Table 1 shows timberland area breakdown by region, giving an indication of where woodlands operations would be expected. Based on Table 1 most of the woodland operations ought to be in the South with just over half the timberland area.
That will be shown not to be the case. Many firms decided to locate a woodlands operation in each forest region, even if some op- erations did not administer large areas. Many factors came into play in determining location, not just the timber resource. If one was to plot the locations of woodlands operations, the map would look similar to Figure 2. The location decision involved a tradeoff. Mill location and timber location drove the decision, but part of the function was wood procurement.
So there was an advantage in not being located too close to competitors so there would be less competition for outside wood. These loca- tion decisions were complex and often the optimal location was not the choice that seemed to make sense at first. Figure 1. Open Access T. Table 1. The directory included most of the major woodlands divisions that operated in the United States. The list of locations developed below came from this directory. The fifteen years from to were chosen as representative of the peak of the forest products industry and those fifteen directories were used to develop the listing.
Size makes much sense and the listings will be by size, with the larges op- erations first. Within size grouping, the largest operations will be presented first. The directory did not include timberland areas owned. Operations Man agi n g 1, 0 00 , ha or More These are the large multi-national corporations with huge timberland holdings backing major lumber, plywood, and pulp and paper mills.
They tend to have a major corporate head- quarters, often in New York City or nearby; Atlanta, Georgia and Portland, Oregon are also major headquarter cites. Timber- lands and wood products tend to be a major division of the corporation and usually very large regional timberland divi- sions are established. Divisions tend to be organized geo- graphically Northeast, Midwest, Southeast, South Central, Rocky Mountain, and Pacific Northwest , by wood product lumber, plywood, pulp and paper , or by historical ownership patterns a division might be a purchased lumber company.
International Paper listed its corporate headquarters as New York in and its timberland area was 2,, ha. Weyerhaeuser Company listed its corporate headquarters as Tacoma Way, WA and its timberland area was 2,, ha. Timber Harvesting Magazine was a southern magazine and some very western companies like Weyerhaeuser did not supply much data for their western operations.
The Crossett Division was broken into smaller timber operations in Arkansas and Mississippi. Regis Paper Company listed its headquarters as New York and its timberland area was 1,, ha. Champion International Corporation was listed as headquar- tered at Stamford, CT and its timberland area was 1,, ha. Great Northern Nekoosa Corporation was listed in as owning 1,, ha of timberland. It was operated as two divisions and a subsidiary McCann Paper company mergers began well before the s. Operations Man agi n g 1,, t o 50 0, ha These were still large timberland operations and were often organized similar to the very largest firms.
However, most had perhaps two divisions, often geog raphically based northern and southern, southern and western, or northern and western. Often the cor- porate headquarters was at the larger or older of the two divi- sions. These firms tend to be fairly similar to the larger companies in terms of organization. Scott Paper Company listed its headquarters as Philadelphia, PA and its timberland area was , ha. Crown Zellerbach Corporation was headquartered at Portland, OR and had a timberland area of , ha.
Crown Zeller- bach was one of the early take-over targets. Time spun off the companies and they became Temple-Inland Inc. Diamond International Corporation listed its timberland area as , ha. Diamond International was one of the early takeover targets. The Mead Corporation had its headquarters in Dayton, OH and listed its timberland area as , ha.
Potlatch Corporation is headquartered in Spokane, WA and listed its timberland area as , ha. Operations Managing , to , ha These are the medium-sized firms. Most occupy a single re- gion, rarely more than two regions. There tends to be a single timberlands division. Sometimes small geographical divisions are established within one ge ographical region. Much innovation came from these mid-sized firms. Louisiana-Pacific Corporation was headquartered at Portland, OR and listed a timberland area of , ha.
Container Corporation of America, owned by Mobil Corpo- ration, listed its timberland area as , ha. The woodlands were managed out of West Monroe. American Can Company listed its timberland area as , ha. Operations Managing Less than , ha While these were the smallest of the forest products compa- nies, concentrated timberland area in small regions could create some relatively large single landholdings.
But, in general, these were smaller timberlands, most always associated with a region or sub-region. All of these were large enough to be generally well-known in the forestry community. Longview Fibre Company was headquartered out of Longview, WA and listed its timberland area as , ha. The woodlands were managed out of Long- view.
The woodlands were managed out of Bolton. The woodlands were managed out of San Francisco. The Pacific Lumber Company was headquartered at Scotia, CA and its timberland area is listed as 66, ha and its woodlands are managed out of Sco- tia. Medford Corporation had its headquarters in Medford, OR and listed its timberland areas as 35, ha.
Arcata Redwood Company had a wood- lands division in Humboldt Count y, CA and listed its timber- land area as 30, ha. They were still large enough to be listed in the woodlands di- rectory. Joe Paper Company at Port St.
Conclusion Woodlands Divisions locations followed a very distinctive pattern. Divison locations listed were plotted on a map of the United States, producing a map that was not very usable. Divi- sion locations tended to be in clusters that produced a muddled, difficult-to-read map. Figure 2 with does a better job of giving a general geographical pe rspective on location. As one would ex- pect Woodlands Divisions were located near the mills.
Since the timberlands tends to be close to the mills, and the divisions close to the timberlands, that relationship follows common sense. The headquarters of the Woodlands Division, at least, would be close to the mills. Of course, some timberlands were spread out over fairly vast areas. Woodlands then would have some sort of regional pattern based on minimizing transporta- tion and travel costs. Woodland Divisions not the headquarters, but the operational first-level subdivisional level would man- age a timberland area of 20, to , ha.
The lower end would be for smaller woodlands with limited area. The upper end would be very large woodlands with very large subdivi- sions. National firms with timberland managed across the country usually had regional woodlands based on the North and South in the eastern United States, with the Midwest or Lake States usually managed separately.
Eastern and Western Divisions were almost always the case, due to the large differences in timber types, logging conditions, and customs. Companies with large ownerships in the South usually managed them as a Sou- theastern Division and a Mid-South Division. There is one strong influence on location that is not apparent from just studying the map and mill locations. Historical de- velopment of the industry has much influence on division loca- tion.
For example, the pulp an d paper industry developed in certain parts of the Northeast and Midwest. Those locations tended to have Woodlands Divisions. Many of the very early lumber companies with reasonably large timberlands were bought up by the larger firms. However, the same factors that influenced how the locations were first selected and historical development have tended to encourage the TIMOs and REITs that acquired the timberlands to maintain operations offices at these same locations.
While Woodlands Divisions were operational offices that directed large organiza- tions that managed the trees on the ground, these new divisions are more managerial offices, with the field work usually con- tracted out to consulting forestry organizations. Locations have only changed moderately, but functio n is very much different. It tells a story of how forest management was organized and where forest industry was strongest. Its history helps tell the history of the nation.
Forest management and planning. The rise and fall of the timberland investment management organizations: Ownership changes in US forestland. In Pinchot Distinguished Lecture. Institutional ownership of US timberland: History, rationale, and implication for forest management. Industrial timberland divesti- tures and investment: Opportunities and challenges in forest con- servation. Lyon Company, Publishers. Mergers and acquisitions in the forest products industry. Forest Products Journal, 49, Forest management: Regulation and valuation 2nd ed.
Forest management: To sustain ecological, economic, and social value 4th ed. Financialization, shareholder value, and the transformation of timberland ownership in the US. United States timberland markets: Transactions, values and market research.
Innovative forms of timberland ownership: What are t h e driving forces? The gross margin and profitability can and does change significantly from quarter to quarter. The refining MLPs pay operating and general expenses out of the gross margin, set some money aside to cover future turnaround costs, and pay out all or almost all of the remaining cash flow as distributions to the LP unit holders. Distributions will change from quarter to quarter. Besides crude and fuel prices the other factor that can affect distributions is any refinery downtime, either from a planned event like a turnaround, or unplanned such as a fire in one part of the refinery.
Here is the updated data chart that will be the focus of each article in this series. Since the last article, all three MLPs reported their third-quarter results and are ex-dividend. NTI and ALDW reported nicely higher operating margins and were able to increase the quarterly distributions significantly. In contrast, the CVRR distribution was nearly halved, primarily due to a refinery fire that shut down for a month one of the two the MLP owns. Crack spread is the calculated difference between published market prices for crude and fuels.
This is an average value, and will show if the current quarter should produce a higher or lower refining margin compared to the previous two quarters. I include this crack spread data for the areas closest to where the MLPs operate, as published by Howard Weil and spot prices from the U. Energy Information Agency. The drop in the price of crude is affecting the spread in different parts of the country differently.
Up north in Chicago the spread has widened and on the Gulf Coast you find tightening of the profit potential for refiners. I covered the transaction in detail here. I recently covered the CVRR third-quarter results in this article. My unanswered question about CVRR is why the company's operating margin continues to lag its benchmark crack spread.
My investment philosophy for these variable pay MLPs is to accumulate when the distributions are small and the unit prices drop. Currently only CVRR is near the low end of its week price range and provides a reason to pick up units at the current value. Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it other than from Seeking Alpha.
The tax treatment of ISAs depends on your individual circumstances and may be subject to change in the future. AJ Bell Review. Interactive Investor Review. IG Review. REITs became an available option for companies in January , when the UK government introduced legislation that brought them into effect. REITs were modelled after mutual funds , and function in a similar way.
When you invest in a REIT, you pool your money in one company alongside other investors. Typically, this can include a range of residential properties, including rental properties. It cannot include owner-occupied property.
Most REITs tend to specialise in specific property assets, building property portfolios for the type of investment they choose. For example, one trust might exclusively be a property rental business, while another only invests in commercial property. While the majority of REITs are equity-based, there are also some that provide the financing to other companies to purchase property instead.
Instead of investing directly in property, mortgage REITs give their money to other businesses looking to buy property. Then, much like any other mortgage or loan, the mortgage REIT generates income from interest paid by the other company. First, the process involves a review of the company, determining whether or not the business is able to meet and maintain the various conditions that the REIT regime requires.
Next, they will undertake the full conversion process. This usually involves working with a set of financial advisors to create a detailed work plan for the conversion. This might include elements such as tax advice, initial public offering IPO support, accounting support, and any necessary legal advice. At this stage, there may need to be some discussion with HMRC to ensure that the company meets the necessary requirements.
After this, the company may need help in launching its IPO to receive capital funding from investors. Finally, the REIT can launch. It will be monitored and managed for compliance reasons throughout its operation. After this process is completed, there are some further criteria that UK REITs must continue to meet to keep their eligibility.
Below are just a few of the conditions the REIT must continue to meet. Bear in mind that this list is not exhaustive. For example, in shopping centres, each unit or floor that can be rented separately is considered to be an individual property. As a result, a single REIT could potentially own one shopping centre but rent out multiple properties within it.
The benefits of REITs can be broken down into two separate categories: the benefits for companies, and the benefits for individual investors. All profits and gains within a REIT are entirely tax-exempt. Of course, as the REIT may also participate in non-property related business, any profits or gains from these activities are subject to Corporation Tax.
The ability to become a REIT means becoming even more available to investors and shareholders, particularly in the retail market. REITs are also particularly well-known for the way that they attract international investment. This can open up avenues of funding that the business simply could not have accessed before. REITs present a potentially tax-efficient option for investors because it is possible to purchase them through efficient accounts.
This figure counts towards your overall ISA allowance. As a result of the processes that REITs have to go through in order to achieve the status, most REITs have strong governance values at the board level. This is good for investors as it means they can be more sure that the company is well run, giving confidence that the REIT will be managed properly and investment decisions will continue to be prudent and sensible.
REITs give access to property investments for individuals who may not be able to afford to buy them outright. British land and property are notoriously expensive, often making property investments also quite expensive. Meanwhile, REITs present a good chance to get involved in property and potentially see a high yield on their investment for a far lower price than having to buy any of the properties outright.
Meanwhile, UK REITs offer investors access to liquid property investments that they can fairly easily dispose of if they no longer meet the requirements of their portfolio. As with any investment, REITs also come with a range of disadvantages, both for companies and investors.
This high figure significantly reduces company profit and also limits their ability to invest in more property. As the REIT and its managers decide which investments are contained within it, investors have no choice over the properties contained within them. This means investors have no say in investment decisions and, in turn, have no control over the performance of their investment. This could severely reduce the amount of income that you might potentially receive from a REIT investment.
However, REITs are by no means immune to the wider impact of economic cycles and changes. This means changes in interest rates or big market dips put you at risk of losing money rapidly. If you want to know whether your personal risk tolerance is suited to investing in a REIT, make sure you take impartial financial advice from a professional financial advisor.
REITs have share prices just like any other investment which determines how much you need to pay when investing in one. As with any investment, the greater your holdings, the greater the potential for returns. Of course, this also means that there is a potential for bigger losses and falls in the value of your investment.
As asset classes go, property investment is a favoured choice in the UK, and REITs are certainly a good, low-cost way to take part in the market. Property assets are physical and tangible, unlike stocks and shares. There goes more of your investment returns up and out the chimney.
Not to mention home insurance, and all the other maintenance costs required. Now, of course, all of this is the worst case scenario. In most cases, your tenants will pay on time, and your air conditioning unit will work. The principle is this : REITs allow you to get most of the benefits of investing in real estate, without real estate headaches. What type of returns? Many hedge funds have outperformed the stock market by investing in specific sectors and industries.
Most investors have portfolios made up of stocks and bonds. Investing in REITs will expose your portfolio to an entirely different industry that has almost no correlation to stocks and bonds—real estate. Because if the entire stock market is down, and your portfolio is made up of mostly stocks, then your entire portfolio will be down. However, if you have investments outside of the stock market, those investments will balance out your portfolio in case of a downturn. Equity REITs are the most common type of real estate investment trust.
These REITs own and operate income-producing real estate and are publicly traded on the stock market. Instead, they provide financing for the use of purchasing income-producing real estate. Sort of like a bank provides financing for you to buy a home. Because PNLRs are not publicly traded, they are less common to see in investment portfolios. Private REITs are generally sold to institutional investors such as banks, hedge funds, pensions, mutual funds, and insurance companies.
There are always pros and cons to everything in life. In the case of REITs, there are more advantages than disadvantages when it comes to this investment vehicle. For starters, REITs invest in real estate. Nothing else. This means your investment is backed by real, tangible assets. Not only that, but REITs have little correlation with other popular investments like stocks and bonds. This is a good thing.
Liquidity is a term used to describe how fast an asset can be converted into cash while still maintaining its value. For example, stocks are very liquid because you can buy and sell them quickly on the stock market for cash. On the contrary, the home that you live in is not liquid, because it can take months, sometimes years to list and sell on the housing market.
During that period, the value of the house could change significantly. Because REITs trade on the stock market , they are naturally very liquid and can easily be bought and sold while the market is open during the day. Suppose you experienced an unpredictable expense in your life, or another financial crisis situation happens.
In that case, you want to ensure that at least part of your portfolio is liquid and can be easily converted into cash quickly. Dividends can be especially nice if you are trying to create passive income. Many investors use a mixture of REITs and dividend stocks to earn over six figures per year from their dividend payments alone.
That may not seem like a big difference, but when it comes to getting a return on your investment, every bit counts. Buying REITs is like buying stocks in a company. You open your brokerage account, type in the trading symbol also known as the ticker , enter in how many shares of the REIT you want to buy, and then execute your order. You can start investing in REITs with any broker. If you already have a brokerage account that you are happy with, just use that broker.
Both are free. M1 Finance also has expert pre-built portfolios that you can invest in and get the same results from even billionaire-dollar hedge funds. The service is completely free. Adding REITs to your investment portfolio are a great way to diversify into different markets without adding any of the risks that come with owning physical real estate.
REITs are highly accessible and can be bought or sold from the comfort of your home at most brokers. Skip to content Investing. Advertiser Disclosure. Joshua Mayo July 4, You can trust The Investor Post. Therefore, know that any references to products or services from our partners in this post, although they may compensate us, have not influenced our evaluations. Read about how we make money.
This means your investment is backed by real, tangible assets. Not only that, but REITs have little correlation with other popular investments like stocks and bonds. This is a good thing. Liquidity is a term used to describe how fast an asset can be converted into cash while still maintaining its value. For example, stocks are very liquid because you can buy and sell them quickly on the stock market for cash.
On the contrary, the home that you live in is not liquid, because it can take months, sometimes years to list and sell on the housing market. During that period, the value of the house could change significantly. Because REITs trade on the stock market , they are naturally very liquid and can easily be bought and sold while the market is open during the day.
Suppose you experienced an unpredictable expense in your life, or another financial crisis situation happens. In that case, you want to ensure that at least part of your portfolio is liquid and can be easily converted into cash quickly. Dividends can be especially nice if you are trying to create passive income. Many investors use a mixture of REITs and dividend stocks to earn over six figures per year from their dividend payments alone. That may not seem like a big difference, but when it comes to getting a return on your investment, every bit counts.
Buying REITs is like buying stocks in a company. You open your brokerage account, type in the trading symbol also known as the ticker , enter in how many shares of the REIT you want to buy, and then execute your order. You can start investing in REITs with any broker. If you already have a brokerage account that you are happy with, just use that broker. Both are free. M1 Finance also has expert pre-built portfolios that you can invest in and get the same results from even billionaire-dollar hedge funds.
The service is completely free. Adding REITs to your investment portfolio are a great way to diversify into different markets without adding any of the risks that come with owning physical real estate. REITs are highly accessible and can be bought or sold from the comfort of your home at most brokers. Skip to content Investing. Advertiser Disclosure. Joshua Mayo July 4, You can trust The Investor Post. Therefore, know that any references to products or services from our partners in this post, although they may compensate us, have not influenced our evaluations.
Read about how we make money. Key Points. REIT stands for real estate investment trust. REITs let you invest in real estate without ever having to touch physical real estate. Typically, investing in real estate requires having a lot of upfront capital. So why are they kept a secret? Why are they not in more investment portfolios? About the author. Joshua Mayo is the founder of The Investor Post, runs a self-branded YouTube channel , and is an avid investor and entrepreneur.
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This compensation may impact how, where and in what order products appear. All rights reserved. Advertiser disclosure. Links on this website may lead you to a product or service that provides an affiliate commission to the owners of this site should you make a purchase. Acadia Realty Trust AKR focuses on urban areas with high barriers to entry that are supply-constrained and highly populated.
It also takes the approach of not falling in love with one particular retailer, because a popular retailer today might not be a popular retailer tomorrow. Instead, it invests in a street, block, or building, allowing it always to make adjustments so hot retailers are in place. Despite the advantages, nobody should invest solely in REITs. As with any asset class, these should always be a portion of a diversified portfolio.
Dan Moskowitz does not have any positions in AKR. Real Estate Investing. Your Money. Personal Finance. Your Practice. Popular Courses. Alternative Investments Real Estate Investing. Related Articles. Real Estate Fund: What's the Difference? Partner Links. Related Terms. Learn more about REITs. Commercial Real Estate Definition Commercial real estate CRE is property used solely for business purposes and often leased to tenants for that purpose.
Real Estate Definition Real estate refers broadly to the property, land, buildings, and air rights that are above land, and the underground rights below it. Learn more about real estate. Investopedia is part of the Dotdash Meredith publishing family.
Real estate investment is not just a playground for the rich and well connected. #RealEstateInvestment #PassiveIncome #REIT. The term "securities" encompasses a broad range of investments, Instead of investing in stocks or bonds, however, REIT investors pool their funds to buy. Real estate investment trust consulting; Bank Financing; Tax credits – energy, solar, enterprise zones, and low-income and affordable housing; Business and real.