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美國REITs市場介紹
姜堯民
本講義僅供教學之用，勿有商業用途。
價值的決定要素
The traditional real estate cliché about the “3
determinants of value”: “Location, location,
location”.
The modern REIT cliché about the “3
determinants of value”:
“Management, management, management”.
What is a REIT?
A REIT is a company that owns and, in most cases, operates income-
producing real estate such as apartments, shopping centers, offices,
hotels and warehouses. Some REITs also engage in financing real
estate. The shares of a REIT are freely traded, usually on a major stock
exchange.
A company that qualifies as a REIT is permitted to deduct dividends
paid to its shareholders from its corporate tax bill. As a result, most
REITs remit at least 100 percent of their taxable income to their
shareholders and therefore owe no corporate tax. Taxes are paid by
shareholders on the dividends received and any capital gains. Most
states honor this federal treatment and do not require REITs to pay
state income tax. To qualify as a REIT, a company must distribute at
least 90 percent of its taxable income to its shareholders annually.
However, like other businesses but unlike partnerships, a REIT cannot
pass its tax losses to its investors.
Why Were REITs Created?
Congress created REITs in 1960 to make investments in large-
scale, income-producing real estate accessible to smaller
investors. Congress decided that the only way for average
investors to invest in large-scale commercial properties was the
same way they invest in other industries, through the purchase
of publicly traded stock. In the same way as shareholders
benefit by owning stocks of other corporations, the stockholders
of a REIT earn a pro rata share of the economic benefits that
are derived from the production of income through commercial
real estate ownership. REITs offer distinct advantages for
investors; greater diversification through investing in a portfolio
of properties rather than a single building and expert
management by experienced real estate professionals.
Real Estate Investment Trust Act of 1960
The federal law that authorized REITs.
Its purpose was to allow small investors
to pool their investments in real estate
in order to get the same benefits as
might be obtained by direct ownership,
while also diversifying their risks and
obtaining professional management.
美國發展歷史
美國REITs在1960年及1970年代的發展初期展
現榮景，1968年至1972年間REITs資產成長近
2000%，但整體市場仍不大。1973年開始萎縮，
1974年，1975年及1976年總資產連續下降，從
美金20 billion，到12 billion，再到9.7 billion。
主要的原因是初期這些REITs都投資了極大比
例的資金在抵押貸款上(註1)，而當時市場利率
的上升，造成REITs損失，影響其發展。
1980年代中期，REITs市場一度好轉，主要是
因為REITs調整其資產配置，減少抵押貸款的
投資，增加權益型資產的投資，此時少有個別
的REITs市值是超過美金500 Million的。
經過30年的發展，在1990年代初期，由於傳
統可融通不動產市場開發的資金缺乏，促成
REITs的蓬勃發展。在市場總值、個別REITs大
小、及交易量方面都有十足進展，提升了交易
效率。1997年，有25家REITs的總市值超過美
金1 Billion，甚至於有5家是超過美金2 Billion
的。這時REITs的投資標的多選定在權益型資
產，尤其是投資商業不動產，並且不再委外管
理，而採內部自行管理資產(註2)。
Tax Reform Act of 1986
Federal law that substantially altered the real
estate investment landscape by permitting
REITs not only to own, but also to operate
and manage, most types of income-producing
commercial properties. It also stopped real
estate "tax shelters" that had attracted capital
from investors based on the amount of losses
that could be created.
近來美國REITs發行金額愈來愈大，甚至於會
有400 million (Ziering, Winograd, and McIntosh,
1997)。不單是金額增加，REITs成立個數也增
加 ， 1990 年 ， 有 58 家 REITs 總 市 值 為 84.8
Billion 。 Ziering, Winograd, and McIntosh ，
(1997)認為，美國市場適合有40家到50家REITs
存在，172家顯然太多。且如專門投資出租公
寓的REITs在1999年3月有33家也太多了，應只
要 4 或 5 家 即 可 。 Ziering, Hess, Liang, and
McIntosh (1998)也認為數量小，達不到規模經
濟，成本效率不彰的REITs紛紛採合併的方式
增加效率，像是1996年的Simon及De Bartolo的
合併。
REIT Modernization Act of 1999
Federal tax law change whose provisions allow a
REIT to own up to 100% of stock of a taxable
REIT subsidiary that can provide services to REIT
tenants and others. The law also changed the
minimum distribution requirement from 95
percent to 90 percent of a REIT's taxable income -
- consistent with the rules for REITs from 1960 to
1980.
How Has Real Estate Financing
Changed Over Time?
Historically, income-producing commercial real estate
often was financed with high levels of debt. Properties
provided tangible security for mortgage financing, and
the rental income from those properties was a clear
source of revenue to pay the interest expense on the
loan.
Today, properties owned by REITs are financed on a
much more conservative basis. On average, REITs
are financing their projects with about half debt and
half equity, which significantly reduces interest rate
exposure and creates a much stronger business
operation. Two-thirds of the REITs with senior
unsecured debt ratings are investment grade.
How Does a Company Qualify as a REIT?
In order for a company to qualify as a REIT, it must comply with
certain provisions within the Internal Revenue Code. As required
by the Tax Code, a REIT must:
be an entity that is taxable as a corporation;
be managed by a board of directors or trustees;
have shares that are fully transferable;
have a minimum of 100 shareholders;
have no more than 50 percent of the shares held by five or fewer individuals
during the last half of each taxable year;
invest at least 75 percent of the total assets in real estate assets;
derive at least 75 percent of gross income from rents from real property, or
interest on mortgages on real property;
have no more than 20 percent of its assets consist of stocks in taxable REIT
subsidiaries;
pay dividends of at least 90 percent of its taxable income in the form of
shareholder dividends.
How are REITs Different from
Limited Partnerships?
REITs are not partnerships, although as is the case with other
corporations, REITs use partnerships to engage in joint ventures.
There are important organizational and operational differences
between REITs and limited partnerships.
One of the major differences between REITs and limited
partnerships is how annual tax information is reported to
investors. An investor in a REIT receives a traditional IRS Form
1099 from the REIT, indicating the amount and type of income
received during the year. An investor in a partnership receives a
very complicated IRS Schedule K-1. Also a REIT investor must
file less state tax returns than required by a partnership
investment.
The oversight/corporate governance features of a REIT are
believed to be far superior to those of a partnership.
Other important differences between REITs and limited
partnerships are shown in the chart 如下頁
Important Differences:
REITs vs. Partnerships
REITs Partnerships
Yes. The shares of most REITs
No. When liquidity exists, generally much less
Liquidity are listed and traded on stock
than REITs
exchanges
Minimum Investment Amount None Typically $2,000-$5,000
Reinvestment Plans Yes, including some at discounts No
Ability to Leverage Property Yes; this makes REITs suitable
Investments without Incurring for individual IRAs, 401(k), and No
UBIT for Tax-Exempt Accounts other pension plans
No, controlled by general partner who cannot
Investor Control Yes, investors re-elect directors
be easily removed by limited partners
Yes, stock exchange rules or
state law typically requires
Independent Directors No
majority to be independent of
management
At least 100 shareholders
Shared between any number of limited and
Beneficial Ownership required; most REITs have
general partners
thousands
Ability to Grow by Additional
Public Offerings of Stock or Yes Rarely
Debt
Ability to Pass Losses on to
No Yes
Investors
Information to Investors Form 1099 Schedule K-1
Only in state where investor
Subjects investors to state taxes Yes, for all states in which it owns properties
resides
REITs
Do not pay taxes on their earnings.
Asset requirements:
At least 75% of the value of a REIT’s assets must consist
of real assets, cash, and government securities.
Not more than 5% of the value of the assets may consist of
the securities of any one issuer if the securities are not
includable under the 75% test.
A REIT may not hold more than 10% of the outstanding
voting securities of any one issuer if those securities are
not includable under the 75% test.
Income requirements:
At least 95% of the entity’s gross income must be derived
from dividends, interest, rents, or gains from the sale of
certain assets.
At least 75% of gross income must be derived from rents,
interest on obligations secured by mortgages, gains from
the sale of certain assets, or income attributable to
investments in other REITs.
Not more than 30% of the entity’s gross income can be
derived from sales or disposition of stock or securities held
for less than six months or real property held for less than
four years other than property involuntarily converted or
foreclosed on.
Distribution requirements:
Distributions to shareholders must equal or exceed the sum
of 95% of REIT income.(90% after 1999)
What Types of REITs are There?
The REIT industry has a diverse profile, which offers many
attractive opportunities to investors. REIT industry analysts often
classify REITs in one of three investment approaches:
Equity REITs own and operate income-producing real estate. Equity REITs
increasingly have become primarily real estate operating companies that engage
in a wide range of real estate activities, including leasing, development of
property and tenant services. One major distinction between REITs and other
real estate companies is that a REIT must acquire and develop its properties
primarily to operate them as part of its own portfolio rather than to resell them
once they are developed.
Mortgage REITs lend money directly to real estate owners and operators or
extend credit indirectly through the acquisition of loans or mortgage-backed
securities. Today's mortgage REITs generally extend mortgage credit only on
existing properties. Many modern mortgage REITs also effectively manage their
interest rate risk using securitized mortgage investments and dynamic hedging
techniques.
Hybrid REITs both own properties and make loans to real estate owners and
operators.
Types of trusts
Equity trusts
– Blank or “Blind Pool” check trusts
– Purchasing, or specified trusts
– Mixed trusts
– Leveraged REITs versus unleveraged REITs
– Finite-life versus nonfinite-life REITs
– Closed-end versus open-end REITs
– Exchange trusts
– Developmental-joint venture equity REITs
– Health-care REITs
Mortgage trusts
Hybrid trusts
REIT 實行架構
投資銀行
underwriting
購買不動產
投資者 REITs (equity trusts)
投資金額 投資 不動產融資
受益憑證 收益 (mortgage trusts)
Hybrid trusts
買賣
次級市場
REITS can also be distinguished by?
Type of property ...
Some REITs invest in a variety of property types: shopping
centers, apartments, warehouses, office buildings, hotels, etc.
Other REITs specialize in one property type only, such as
shopping centers or factory outlet stores. Health care REITs
specialize in health care facilities: hospitals, including acute care,
rehabilitation and psychiatric, medical office buildings, nursing
homes, and congregate and assisted living centers.
Geographic focus ...
Some REITs invest throughout the country. Others specialize in
one region only, or even a single metropolitan area.
UPREIT
In the typical UPREIT, the partners of the Existing
Partnerships and a newly-formed REIT become partners in
a new partnership termed the Operating Partnership. For
their respective interests in the Operating Partnership
("Units"), the partners contribute the properties from the
Existing Partnership and the REIT contributes the cash
proceeds from its public offering. The REIT typically is the
general partner and the majority owner of the Operating
Partnership Units.
After a period of time (often one year), the partners may
enjoy the same liquidity of the REIT shareholders by
tendering their Units for either cash or REIT shares (at the
option of the REIT or Operating Partnership). This
conversion may result in the partners incurring the tax
deferred at the UPREIT's formation. The Unitholders may
tender their Units over a period of time, thereby spreading
out such tax. In addition, when a partner holds the Units
until death, the estate tax rules operate in a such a way as to
provide that the beneficiaries may tender the Units for cash
or REIT shares without paying income taxes.
Public Investors Private Investors
(Stockholders) (Partnership Unit-holders)
REIT
Umbrella Partnership
(UP)
Operating Partnership Operating Partnership Operating Partnership
(OP) (OP) (OP)
Property Property Property
How Many REITs Are There?
There are about 300 REITs operating in the United States today.
Their assets total over $300 billion. About two-thirds of these
trade on the national stock exchanges:
New York Stock Exchange - 149 REITs
American Stock Exchange - 27 REITs
NASDAQ National Market System - 12 REITs
In addition, there are dozens of REITs that are not traded on a
stock exchange. The balance of this publication discusses
publicly-traded REITs.
(單位：百萬美元，年底數字)
合計 權益型 抵押貸款型 混合型
年 家數 總市值 家數 總市值 家數 總市值 家數 總市值
1971 34 1,494.30 12 332 12 570.8 10 591.6
1972 46 1,880.90 17 377.3 18 774.7 11 728.9
1973 53 1,393.50 20 336 22 517.3 11 540.2
1974 53 712.4 19 241.9 22 238.8 12 231.7
1975 46 899.7 12 275.7 22 312 12 312
1976 62 1,308.00 27 409.6 22 415.6 13 482.8
1977 69 1,528.10 32 538.1 19 398.3 18 591.6
1978 71 1,412.40 33 575.7 19 340.3 19 496.4
1979 71 1,754.00 32 743.6 19 377.1 20 633.3
1980 75 2,298.60 35 942.2 21 509.5 19 846.8
1981 76 2,438.90 36 977.5 21 541.3 19 920.1
1982 66 3,298.60 30 1,071.40 20 1,133.40 16 1,093.80
1983 59 4,257.20 26 1,468.60 19 1,460.00 14 1,328.70
1984 59 5,085.30 25 1,794.50 20 1,801.30 14 1,489.40
1985 82 7,674.00 37 3,270.30 32 3,162.40 13 1,241.20
1986 96 9,923.60 45 4,336.10 35 3,625.80 16 1,961.70
1987 110 9,702.40 53 4,758.50 38 3,161.40 19 1,782.40
1988 117 11,435.20 56 6,141.70 40 3,620.80 21 1,672.60
1989 120 11,662.20 56 6,769.60 43 3,536.30 21 1,356.30
1990 119 8,737.10 58 5,551.60 43 2,549.20 18 636.3
1991 138 12,968.20 86 8,785.50 28 2,586.30 24 1,596.40
1992 142 15,912.00 89 11,171.10 30 2,772.80 23 1,968.10
1993 189 32,158.70 135 26,081.90 32 3,398.50 22 2,678.20
1994 226 44,306.00 175 38,812.00 29 2,502.70 22 2,991.30
1995 219 57,541.30 178 49,913.00 24 3,395.40 17 4,232.90
1996 199 88,776.30 166 78,302.00 20 4,778.60 13 5,695.80
1997 211 140,533.80 176 127,825.30 26 7,370.30 9 5,338.20
1998 210 138,301.40 173 126,904.50 28 6,480.70 9 4,916.20
1999 203 124,261.90 167 118,232.70 26 4,441.70 10 1,587.50
2000 189 138,715.40 158 134,431.00 22 1,632.00 9 2,652.40
2001 182 154,898.60 151 147,092.10 22 3,990.50 9 3,816.00
Who Determines a REIT's Investments?
A REIT's investments are determined by its
board of directors or trustees. Like other
public companies, a REIT's Directors are
elected by, and responsible to, the
shareholders. In turn, the directors appoint the
management personnel. As with other public
corporations, REIT directors are typically well-
known and respected members of the real
estate, business and professional
communities.
How are REITs Managed?
Like other public companies, the corporate officers
and professionals that manage REITs are
accountable both to their boards of directors as well
as their shareholders and creditors. Most REITs
became public companies within the past 10 years,
often transforming to public ownership what had
previously been private enterprises. In many cases,
the majority owners of these private enterprises
became the senior officers of the REIT and rolled their
ownership positions into shares of the new public
companies. Thus, the senior management teams of
many REITs today own a significant portion of the
company's stock, which helps to align the economic
interests of management with shareholders.
Agency Costs: Conflicts of Interest
Some major issues to watch out for…
1) Transaction bias in UPREITs:
· Due to tax-based conflict (different cost basis for LP investors vs
public stock investors)?…
2) Real estate interests outside the REIT:
· Do REIT managers have other real estate interests that compete with
the REIT’s properties or for the managers’ time & energy (other
properties not in the REIT, other interests such as brokerage or
management firms)?…
3) Potential for “self-dealing”:
· Do REIT managers have incentives to have the REIT engage in
“Sweatheart” deals with brokerage, management, development firms in
which they have interests?…
委外管理 vs 內部管理
Economies of Scale
Are there scale economies in REIT administrative
costs?…
Are there scale economies in REIT capital costs?…
Where are the limits of such economies?…
Are there economies of scope in REIT service
provision?…
What is "Funds From Operations"?
The most commonly accepted and reported
measure of REIT operating performance.
Equal to a REIT's net income, excluding
gains or losses from sales of property, and
adding back real estate depreciation.
FAD (Funds Available for Distribution)
Start with FFO.
Then:
Deduct: Capital improvement expenditures (CI).
Deduct: Amortization of debt principle (AMORT).
Adjust for: Straight-line rents.
註：Straight lining averages the tenant‘s rent payments over
the 之life of the lease.
How do Shareholders Treat REIT
Distributions for Tax Purposes?
REITs are required by law to distribute each year to their shareholders at least 90
percent of their taxable income. Thus, as investments, REITs tend to be among
those companies paying the highest dividends. The dividends come primarily from
the relatively stable and predictable stream of contractual rents paid by the tenants
who occupy the REIT's properties. Since rental rates tend to rise during periods of
inflation, REIT dividends tend to be protected from the long term corrosive effect of
rising prices.
For REITs, dividend distributions for tax purposes are allocated as ordinary income,
capital gains and return of capital, each of which may be taxed at a different rate.
A return of capital distribution is not taxed as ordinary income. Rather, the
investor's cost basis in the stock is reduced by the amount of the distribution.
When shares are sold, the excess of the net sales price over the reduced tax basis
is treated as a capital gain for tax purposes. So long as the appropriate capital
gains rate is less than the investor's marginal ordinary tax rate, a high return of
capital distribution may be especially attractive to investors in high tax brackets.
What Real Estate Fundamentals
Should I Consider Before Investing?
REIT investors often compare current stock prices to the
net asset value (NAV) of a company's shares. Net Asset
Value is the per share measure of the market value of a
company's net assets. At times, the stock price of a REIT
may be more or less than its NAV.
The net "market value" of all a company's assets, including
but not limited to its properties, after subtracting all its
liabilities and obligations.
Exhibit 12-2:
NAREIT vs NCREIF As s e t Value s & Cas h Flow s
(All indice s s e t to ave rage value = 1)
1.6
1.4
1.2
1.0
0.8
0.6
81 83 85 87 89 91 93 95 97
NCREIF Value (unsmoothed) NAREIT Value (unlevered)
NCREIF CF (NOI) NAREIT CF(unlevered div.)
How Are REIT Stocks Valued?
Like all companies whose stocks are publicly traded, REIT shares are
priced every day in the market and give investors an opportunity to
value their portfolios daily. To assess the investment value for these
shares, typical analysis involves one or more of the following criteria:
Management quality and corporate structure;
Anticipated total return from the stock, calculated from the anticipated price
change and the prevailing yield;
Current prevailing dividend yield relative to other yield-oriented investments
(e.g., bonds, utility stocks);
Dividend coverage from funds from operations;
Anticipated growth in funds from operations per share; and
Underlying asset value of the real estate and/or mortgages, and other
assets.
DIV1 DIV 2 DIV 3
E
1 r (1 r ) 2
(1 r ) 3
DIV1
E
r g
r r f E[ rM ] r f
DIV 1
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E
What Factors Contribute to REIT
Earnings?
Growth in FFO typically comes from several sources, including
higher revenues, lower costs and new business opportunities.
The most immediate sources of revenue growth are higher rates
of building occupancy and increasing rents.
Property acquisition and development programs also create
growth opportunities, provided the economic returns from these
investments exceed the cost of financing.
Like other public companies, REITs and publicly traded real
estate companies also grow earnings by improving efficiency
and taking advantage of new business opportunities.
Who Invests in REITs?
Thousands of investors, both U.S. and non-U.S., own shares of
REITs. Other typical buyers of REITs are pension funds,
endowment funds and foundations, insurance companies, bank
trust departments and mutual funds.
Investors typically are attracted to REITs for their high levels of
current income and the opportunity for moderate long-term
growth. These are the basic characteristics of real estate. In
addition, investors looking for ways to diversify their investment
portfolios beyond other common stocks as well as bonds are
attracted to the unique characteristics of REITs.
REIT shares typically may be purchased on the open market,
with no minimum purchase required. Many investors also are
choosing to own REITs through mutual funds that specialize in
public real estate companies.
Why Should I Invest in REITs?
Why Should I Invest in REITs?
REITs are total return investments. They typically provide high
dividends plus the potential for moderate, long-term capital
appreciation. Long-term total returns of REIT stocks are likely to
be somewhat less than the returns of high-growth stocks and
somewhat more than the returns of bonds. Because most REITs
also have a small-to-medium equity market capitalization, their
returns should be comparable to other small to mid-sized
companies.
There is a relatively low correlation between REIT and publicly
traded real estate stock returns and the returns of other market
sectors. Thus, including REITs and publicly traded real estate
stocks in your investment program helps build a diversified
portfolio.
REITs offer investors:
Current, stable dividend income;
Dividend growth that has consistently exceeded the rate of consumer
price inflation;
High dividend yields;
Liquidity: share of publicly traded REITs are readily converted into
cash because they are traded on the major stock exchanges;
Professional management: REIT managers are skilled, experienced
real estate professionals;
Portfolio diversification: minimizes risk;
Performance Monitoring: a REIT's performance is monitored on a
regular basis by independent directors of the REIT, independent
analysts, independent auditors, and the business and financial media.
This scrutiny provides the investor a measure of protection and more
than one barometer of the REIT's financial condition.
2001 Total Return Proxy Data
(January 1997 - December 2001; Benchmarked at December 1996 = 100.00; Returns in percent)
NAREIT Composite NAREIT Equity NAREIT Mortgage NAREIT Hybrid S&P 500 Russell 2000
Date Return Index Return Index Return Index Return Index Return Index Return Index
Dec-00 6.92 113.59 7.04 119.58 5.18 56.91 2.43 52.28 0.49 188.66 8.59 140.89
Jan-01 1.46 115.25 1.04 120.83 14.17 64.97 14.51 59.86 3.55 195.35 5.21 148.23
Feb-01 -1.30 113.76 -1.60 118.90 4.26 67.74 8.62 65.02 -9.12 177.54 -6.56 138.50
Mar-01 0.91 114.79 0.97 120.05 3.35 70.00 -3.04 63.04 -6.34 166.29 -4.89 131.73
Apr-01 2.63 117.81 2.39 122.91 8.04 75.63 9.01 68.72 7.77 179.22 7.82 142.03
May-01 2.53 120.79 2.42 125.89 8.41 81.99 2.89 70.71 0.67 180.42 2.46 145.52
Jun-01 5.85 127.86 5.86 133.27 3.45 84.82 7.06 75.70 -2.43 176.03 3.45 150.55
Jul-01 -1.73 125.64 -1.99 130.62 6.25 90.12 2.53 77.61 -0.98 174.29 -5.41 142.40
Aug-01 3.39 129.90 3.66 135.40 -5.46 85.19 0.15 77.73 -6.26 163.38 -3.23 137.80
Sep-01 -4.01 124.69 -4.15 129.77 4.16 88.73 -4.53 74.21 -8.08 150.19 -13.46 119.25
Oct-01 -2.69 121.33 -2.86 126.06 1.79 90.32 -0.23 74.04 1.91 153.05 5.85 126.23
Nov-01 5.35 127.83 5.50 133.00 0.87 91.10 4.01 77.01 7.67 164.79 7.74 136.00
Dec-01 2.64 131.20 2.44 136.24 10.78 100.93 2.34 78.81 0.88 166.24 6.17 144.40
Constituent Companies and Relative Weights in the NAREIT Real-Time Index for October 1, 2002
(Ranked by property sector/subsector and equity market capitalization in millions of dollars; September 30, 2002)
1
Equity Market Capitalization
Number Millions of Percent of
of REITs Summary by Property Sector and Subsector dollars Total
34 Industrial/Office 48,044.9 29.4403
20 Office 28,869.5 17.6903
7 Industrial 10,154.9 6.2226
7 Mixed 9,020.4 5.5274
41 Retail 38,877.9 23.8231
26 Shopping Centers 18,361.9 11.2516
9 Regional Malls 17,658.7 10.8207
6 Free Standing 2,857.3 1.7508
24 Residential 29,797.7 18.2590
19 Apartments 27,478.8 16.8381
5 Manufactured Homes 2,318.9 1.4209
20 Diversified 12,917.7 7.9156
16 Lodging/Resorts 7,900.4 4.8411
3 Self Storage 5,209.0 3.1919
13 Health Care 8,518.5 5.2198
7 Specialty 5,592.3 3.4268
19 Mortgage 6,335.9 3.8824
12 Home Financing 4,336.7 2.6574
7 Commercial Financing 1,999.1 1.2250
177 Industry Totals 163,194.3 100.0000
