3 REITs That Turned $ 1,000 Into $ 40,000 – Or More
Real estate investment trusts, or REITs, are considered “boring” stocks by many real estate investors. However, their long-term growth potential can be quite exciting. Here are three great examples of REITs that have used combinations of smart investing strategies, good management, and the power of time to deliver phenomenal returns to their investors.
Real estate income
Real estate income (NYSE: O) is a net leasehold REIT that owns primarily single tenant commercial properties, with over 6,600 properties in all 50 states, Puerto Rico and the UK The company has certainly come a long way since its inception. creation in 1969 and acquired its first property (a Taco Bell) in 1970.
Now you and I couldn’t have invested in Realty Income at the start. The first blow that ordinary investors had to add the company to their portfolios came in 1994, when Realty Income’s shares were listed on the NYSE. Over the next 27 years, shareholders were rewarded with a total return of 4,250% (approximately 15% annualized), meaning that a $ 1,000 investment in the IPO would have turned in $ 43,500 today.
To give you a glimpse of what’s still to come, Realty Income is the less impressive long-term performance of the three actions in this article.
Welltower (NYSE: WELL) is the largest healthcare-focused REIT, and its publicly traded roots date back to the early 1970s, when the predecessor company Health Care Fund was founded with just two qualified nursing facilities in its wallet.
The growth over the years has been impressive. By the mid-1980s, the company changed its name to Health Care REIT and had reached an asset value of $ 182 million. It first expanded internationally in 1998, and by 2005 it had a $ 3 billion property portfolio. And in 2015, when the name was changed to Welltower, the company was approaching a cumulative $ 30. billion real estate investments.
If you had the foresight to invest in Welltower in its early days, you would have been richly rewarded. A $ 1,000 investment in Welltower in the 1970s when it went public would be worth over $ 180,000 today if you had reinvested your dividends along the way.
For self-storage REITs, Public storage (NYSE: PSA) is the dominant leader, bigger than its next competitors combined. But it didn’t start like that. Founded in 1972 as a corporation (not a REIT), it founded a REIT called Storage Equities in 1980 to purchase self-storage properties, while Public Storage acted as manager and collected management fee income. In 1995, the operations were consolidated into a single entity and structured as a REIT, retaining the name of public storage.
Today, Public Storage has nearly 2,500 storage facilities and is one of the largest REITs of any type in the world. However, investors who bought shares in its subsidiary Storage Equities REIT in 1980 and reinvested their dividends along the way have a staggering 13,380% total return, meaning that an investment of $ 1,000 would now be worth more than 130,000. USD.
Who are the next big winners?
Of course, when these return calculations began, these three REITs were much smaller companies than they are today, so I wouldn’t exactly expect returns of a hundred bags from one. of those three over the next 20 or 30 years. However, these are perfect examples of the long-term compound power of real estate assets, and I would bet that there are some young REITs in the market today that will deliver this kind of return to investors who buy stocks and hold. for the long term.