If you are gonna invest in the stock market what better way to keep your fingers in real estate than by looking at a REIT, aka Real Estate Investment Trust. Put simply, REITs are companies that manage investment properties and sell shares of their business like stocks. Their earnings will come from rents and other fees (and appreciation when they sell) and the earnings are either reinvested or paid out in dividend form to the stock owners.
I like keeping an eye on Entertainment Property Trust located here in the Kansas City area. Today’s Kansas City Star has them ranked as the #18 publicly traded company in the Kansas City market area. You can follow them, as I do, on by their ticker symbol EPR on the NYSE.
One of the reasons I like them is they are Kansas City based. And as many of you know, I’m a homer. But their business model is extremely sound to me, as well. This from today’s Kansas City Star:
“The real estate investment trust develops, owns, leases and finances entertainment related businesses, primarily movie megaplexes, of which Kansas City-based AMC makes up more than half. Its total assets exceed $2.1 billion. Last year, the firm loaned $81.6 million to the developer of the proposed Schlitterbahn Vacation Village water park development near Kansas Speedway.”
Let’s be clear about this. Even with the influx of dvd’s and direct-to-your-cable-box movies there is no way people, even in a bad economy, are going to quit going to the movies. Furthermore, with their inroads into the surrounding shops and specialty properties like Schlitterbahn (which will be a slam dunk, by the way) you have to like the outlook.
Am I a securities dealer? No. I just thought I would mix a little stock market in with our usual discussions on residential investment property ownership.