REIT 'Em and Weep
Posted on December 18, 2006 by Her and tagged investments
I purchased 6 shares of Prologis (PLD) Real Estate Investment Trust (REIT) on 10/15/2003 for $36.89 per share. Today it is worth $62.18 per share.
This is an increase of over 68%!
I first learned about REITs during a real estate class I took as an elective in college. A REIT representative came to our class and explained what a REIT is. A REIT is an investment company that manages a portfolio of real estate (usually large buildings like office and hotel towers, not single family homes) to earn profits for shareholders. He also hyped his company's REIT as a "great investment!" This piqued my interest. Later I researched his company and discovered that it was probably not the money-maker he claimed it was. But during my research I found Prologis. It had very good projections and seemed to be managed responsibly, so I invested. I am very pleased with the performance of this investment. I am hoping that it will eventually split shares as it seems to be heading pretty high in price.
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Rick | Dec 19, 2006
Check out RAS. 8% dividend and good REIT.
How did his company's REIT do compared to the one you bought I wonder?
The Wealthy Geek | Dec 20, 2006
Are you sure you bought in Oct. 2003? The price on that date was never higher than $31.99. The Oct. 2004 closing price was $36.90, which is bang on what you mentioned in your blog entry.
Your total return if it's 2004 is 75% and if it was the 2003 price, it's more like 113% including dividends.
Either way you've done great.
@ autologic:
Yeah, and that's exactly why they're *not* my broker anymore! At the same time, though, this was my first venture into a REIT so I was testing the water with just a few shares...the fee would have averaged lower per share if I had bought more shares.
The Wealthy Geek | Dec 21, 2006
Check out FolioFN. Their REIT ready made portfolio has Prologis in it.
lawnboy | Dec 22, 2006
I had 300 shares bought at about 42 and sold a year later at 51 on my broker's advice. So much for the expert knowledge.
I love my REIT fund. Before I bought my apartment, I figured I should buy into some real estate and an REIT was the best way to do it. I've held on to mine for about 3 years as well. I don't think my returns are quite as good as yours (only 29% annually), but it's still one of the best performing investments in my 401k plan.
Avi | Dec 18, 2006
Actually, you made more than 68%, Prologis (pld) has a 2.6% dividend yeild, and i imagine it was just as high or higher since you purchased it. That means you probably earned something like 75-80% total return.
It looks like you made an ~18% return on an annual basis before dividends (probably something like $4-$5/share over the years assuming a constant 3% dividend rate) which translates to about 20% annual growth.
Looks like you did well with buying an holding, though one might argue that a REIT mutual fund has been earning the same return or better but also has the benefit of giving you a piece of a diversified portfolio which means lower risk.
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