Real estate investment trust: evaluation of a union administrator

Private real estate investment trusts are becoming an increasingly popular investment tool in Canada. But with so many options, how can you know which one to choose?

Here are ten questions to ask:

10. Do you know about real estate?

Before deciding to invest with a private REIT, try to determine if the trust owns and manages a wide range of diversified income-producing and development properties in commercial, residential, and office spaces.

9. Do they own and manage diverse assets?

While we typically think that a REIT should diversify across different types of spaces (retail, residential, and office as mentioned above), a good real estate investment trust should also manage properties in different geographic locations, not just in Canada, but also ideally in the United States. .

8. Do they have good relations with their tenants?

Ask about the support services the REIT offers its tenants. Is there an opportunity for tenants to communicate with property managers 24/7? Has the union manager demonstrated that the tenants are really happy and that their requests are being listened to and, where possible, heeded? Happy tenants will generally pay higher rents, and higher rents generate more profit.

7. Are your properties attractive?

What types of properties does the trust own and manage? Where are these properties located? The most attractive properties tend to attract more attractive tenants who can afford higher rents.

6. Are they consistent?

This is a two-part question, and it really comes down to focus. Does the union attract a base of tenants with common needs whose needs are easy to meet? Is management focusing on low-risk tenants who will be located in the properties for the long term? In addition, it is important to determine whether the management has developed a strategic approach to meet the needs of the tenants. By staying focused and by being focused on consistent activities, a REIT will help generate more profit.

5. Do you have flexible office hours?

Tenant needs are not limited to office hours. There may be roof leaks in the middle of the night or some other problem that needs to be fixed at any time. A REIT manager should be available to help address and resolve these issues; Again, this makes for happy tenants, and happy tenants tend to pay higher rents and leases, and tend to stay in the property long-term. For investors, this means potentially higher profits and distributions.

4. Do they have significant associations?

It is a good idea to examine who the real estate investment trust is associated with. Partners will help add knowledge and experience to a REIT, and the presence of such relationships can once again help generate more profit.

3. Do you have custom building spaces?

REITs are always trying to attract tenants who can afford higher rents and leases. In addition to providing exemplary services and space in prime locations, a union should also seek to offer personal and purposeful locations that meet the specific requirements of tenants. When tenants get the space they need, once again, they will stay longer, and this contributes to higher rents and higher profits.

2. Are your business practices transparent?

REIT management must always provide clear financial information to investors in a timely manner.

1. Are they focused on values?

The most important attribute of a real estate investment trust is its values. It is important to determine if the REIT has basic guiding values, and it is even more important to ensure that these values ​​are followed.