In outlook stories --- such as with real estate investment trusts --- business writers have to be careful not to lump all companies in the same category when individual operations specialize in different segments, reminds Grumpy Editor.
Thus was the case in yesterday’s Wall Street Journal story, Is REIT Rally Rooted in Reality or Wrongly Rising?
After noting REITs have rebounded big from their recent lows and “the sector is trading at a premium to the value of the underlying assets,” writer Anton Troianovski mentioned in the second paragraph: “To some stock-pickers, that is one of several signs that REITs are overvalued and a correction is around the corner.”
But the almost half-page story focuses mainly on office REITs and devotes three long paragraphs on Atlanta-based, New York Stock Exchange-listed Cousins Properties Inc., which the writer reported “posted a 3 percent loss in the third quarter --- making it the worst performer in the Dow Jones index among REITs with a market capitalization greater than $500 million.”
Cousins' portfolio includes commercial and office properties, including a troubled 25-story office tower in Atlanta.
While the office (and industrial) segment is a major part of the REIT industry's mix, others in the field --- with about 200 REITs publicly traded --- distinguish themselves by specialization:
• Retail
• Residential
• Health care
• Self storage
• Mortgage backed
• Lodging/resort
• Diversified
• Specialty
So a true REIT roundup should touch on representative companies in all categories.
As with baseball teams in the same league, some do better than others. And smacking timely home runs remain key factors.
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