Google just bet billions on NYC property — here are three REITs to get in the game
It might be time to bet on the return of the Big Apple
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Commercial real estate is making a comeback, and investors might want to pay attention.
Last week, tech giant Google announced it will pay US$2.1 billion for an office building in New York City. In fact, the deal marks the most expensive sale of a single office building in the U.S. since the pandemic began.
What does that mean for investors? It gives the market a new reason to warm up to real estate investment trusts (REITs), which are publicly traded companies that own income-producing real estate. On the day that Google’s purchase was reported, several office REIT stocks shot up.
If companies continue to expand their office facilities, it could lead to increasing demand for office space — a major catalyst for office REITs.
Paying quarterly dividends of US$0.98 per share, Boston Properties offers an annual dividend yield of 3.5%.
While Boston Properties trades around US$110 per share, you can get a piece of the REIT using a popular stock trading app that allows you to buy fractions of shares with as much money as you’re willing to spend.
Vornado Realty Trust (VNO)
If you’re bullish on real estate in NYC, look no further than Vornado Realty Trust . This REIT concentrates on premier office and retail properties and consists of 20.6 million square feet of Manhattan office space in 33 properties, 2.7 million square feet of Manhattan retail space in 65 properties, nearly 2,000 units in 10 NYC residential properties, and more.
Vornado earned an adjusted FFO of US$0.69 per share in the second quarter of 2021, up from the US$0.56 per share it generated a year ago. The amount was also in excess of its quarterly dividend payment of US$0.53 per share.