09-01-2015, 08:40 PM
I think that in general they should be dropping hard. Under 4% yields for the biggest and best REITs is beyond ridiculous. I'll not touch them untill VNQ is yielding north of 5% once again. Yields are pretty good on most of the smaller REITs which is why I hold ROOF and KBWY. Eventually the REITs will suffer a 1-2 punch. First rising rates will make the shares less attractive. Secondly, rising borrowing costs will decrease margins and will hurt FFO. IMO REITs won't represent deep value for at least a couple of years. For that reason they will remain closer to the lower end of my 10%-20% weighting range.
Alex