Is Real Estate A Good Play?
Real Estate is one of most volatile sectors within the market. Prices ranging from only the mind can imagine. As the saying goes, “Location, location, location” matters anywhere from the Upper East Side in Manhattan to a small lot in Mississippi. Crafty companies and certain funds often buy property–either flipping it for profit, or leasing it for an annual income.
Yet after the real estate crash in 2007-2008, the common persons opinion towards real estate has been iffy
The properties market isn`t “booming,” but let’s just say there is definitely room for improvement. As the general economic situation improves, it has had a positive effect on the real estate market.
So why buy tangible property when you can buy stock? Here are some companies to invest in.
-A company that has a huge potential to grow, with the market, is The St. Joe Company (JOE). St. Joe has 574,000 acres in Florida. JOE has a total of 31,600 residential units it leases as land lords. On the commercial side, JOE contains 11.6 million square feet of space yet owns 642 acres of commercial land-use entitlements. When the market was down, JOE acquired new territory, netting the company larger returns when held to current day.
-A heavy hitter in the commercial industrial business is Prologis, Inc. (PLD) with a market cap of $18.36 billion. PLD buys commercial warehouses and office spaces to lease them. Prologis is a global company owning industrial real-estate worldwide, to service many corporate companies’ needs.
-Kennedy-Wilson Holdings, Inc (KW) is a company that is located in Beverly Hills California with a market cap of $1.33 billion. KW is found in the United States, the United Kingdom, Ireland, Spain and Japan. This holding consists of 61 million square feet of properties and ownership in 14,764 multifamily apartment units. KW specializes in more of the family and residential sector of real estate.
This acquisition is presented to the younger generation and new investor for the long-term potential real-estate carries. If you look through history, the average house in the 1950s cost $8,450. Twenty years later, in 1970, the average cost of a house was $23,000. Yet in current day, the average house costs around $152,000, increasing dramatically in a relatively short amount of time-even taking inflation into account.
Another important side of real estate to consider is that of the real estate brokers and realtors. This is a huge business, and if the investment side is going well, so will the brokers side. Here are some companies to watch.
-Prudential Financial Inc. (PRU) - With a current stock price of $80.50 with a current market cap of $37.47 billion, this company is on the move reaching a 52-week high.
-Realty Holdings Corp. (RLGY) - With a current stock price of $45.68 with a market cap of $6.66 billion, RLGY is scheduled to release its next quarterly earnings on October 28, which is analyzed to be in positive territory.
-Realty Income Corp. (O)- With a current stock price of $43.53 with a market cap of $8.54 billion, Realty Income pays a $2.18 (5.00%) dividend and yield.
Real Estate will be a growing and thriving market for as long as human nature requires shelter. In order to have a well diversified portfolio, real estate, no matter in what form, needs to be present.