4 Real estate players poised for growth in 2016 – a boon for income seekers

    Since December 2015, when interest rates started increasing from a low, Real Estate Investment Trusts (RETIs) which were taking advantage of low interest rates started experiencing low earnings. RETIs were using the money for refinancing. Apart from low interest rates, US economy improvement and high occupancies also proved to be beneficial for RETIs from 2009 to 2015. For those investors who are looking at income generation in 2016 need to focus on RETIs with moderate debt levels. Let’s look at four companies where investors can bet their money on safely in 2016. 

 

    Crown Castle International

 

    Crown Castle International Corporation (NYSE: CCI) focusing on US market is into wireless tower industry which is a growing market and a cash flow generator. The companyowns, operates and leases wireless infrastructure, including towers, rooftops and distributed antenna systems. The return of the company is growing as the demand for wireless data and the infrastructure for towers is increasing.

 

     The company is well experienced in leasing one tower site to different wireless carriers without any disputes and every ten years when the rent contract of the tower is renewed there is an increase in rent. Crown Castle International having an international repute and expanding worldwide yielded a dividend of 4.23% as of January 2016.

 

 

    With Affordable Care Act into vogue, a real estate company like WelltowerInc which is into leasing of senior housing communities, nursing facilities, medical office buildings, inpatient and outpatient facilities, and life science building is poised for a huge growth. Also coupled with this is the increasing aging population of the US.

 

    Yielding a dividend of 4.85% as of January 2016, Welltower is also poised for a steady cash flow which is not affected by the economic cycles as the number of retired people also increases with time in the US.

 

 

    HCP Inc. (NYSE: HCP) which has dividend yield of 6.13% as of January 2016 is another real estate company which is catering to health care sector like senior housing, hospitals and medical offices of the US. They have many projects in hand like Memorial Hermann, Bayfront and Sky Ridge which yield them huge income which is recession proof to certain extent, though their cash flow may get affected by their largest tenants ManorCare, which may face some financial challenges.

 

 

 

    Another company into senior housing and health care properties of the US, Canada and the UK is Ventas Inc. (NYSE: VTR) which has dividend yield of 5.22 in January 2016. Their strength is their high quality and markets with strong demand. They have expanded into senior housing too recently. Expecting a very high growth because of their quality and market conditions, they rent out their properties based on triple-net leases which confirm their quality.