National Retail: Property Profits

07/01/2014 8:00 am EST

Focus: REITS

Vita Nelson

Founding Publisher and Editor, Moneypaper

Real estate investors have a saying that their success all comes down to 'location, location, location.' That often translates into high occupancy rates for REITs, a sign of ongoing success, suggests Vita Nelson, editor of Moneypaper.

Anything close to 100% occupancy reflects tenant satisfaction and, of course, the fact that the properties owned are in excellent locations that generate business.

The same principle applies to other lines of business, but shows up in things like brand loyalty and repeat business.

In a stock market where values are hard to find, it helps to remember to focus on companies that have found the key to success over decades of operation.

One such company is our latest featured dividend reinvestment idea—National Retail Properties (NNN).

Founded in August 1984 and based in Orlando, Florida, NNN is a fully integrated real estate investment trust (REIT).

Its assets include real estate assets, mortgages and notes receivable, and commercial mortgage residual interests.

The company acquires, owns, invests in, and develops properties that are leased to retail tenants under long-term net leases and primarily held for investment. NNN owns 1,860 properties located in 47 states.

At the end of 2013, its occupancy rate was 98.2% and it recorded Funds From Operations (FFO) of $1.91 per share for the year, compared with $1.77 in 2012. NNN yields 4.5% and it is expected to increase its dividend in July for the 25th consecutive year.

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