I am reading through the 10-Qs of several non-traded REITs and coming across some interesting items. One REIT bought the building where its sponsor is headquartered. Apparently, the sponsor no longer owned the building, but developed it (more than twenty years ago), leases it, manages it and occupies 9% of the space. The transaction occurred late last spring. In reading articles in local papers, apparently the price was fair, still though, it was the most affiliated non-affiliated transaction I have seen in a while.
I always viewed the ratio of Net Cash Flows from Operations (Operating Activities) to Dividends Paid (Financing Activities) as a sign of financial health. I am seeing that this analysis is too simplistic and timing needs consideration. Also, dividend reinvestment is not included in this figure because it is a non-cash transaction, but it has the impact of making the ratio better than it is, especially for firms that have a large amount of dividend reinvestment.
The REIT redemption rates were much higher in 2008 than in 2007. This makes intuitive sense but it is disturbing to see. These investors must be looking at the cash flow to dividend ratios.