SCAM ALERT! Don't fall for these REITs!

SCAM ALERT! Don't fall for these REITs! A REIT scam is when a REIT takes advantage of its shareholders. I would sell these REITs asap. Global Net Lease (GNL) and Industrial Logistics Properties Trust (ILPT) are two examples. Unlike a good REIT like Realty Income (O), these REITs are externally managed and suffer significant conflicts of interest. These are NOT among the best REITs to buy, they are among the top 5 REITs to sell. You can access my entire REIT Portfolio by taking a 2-week free trial to my REIT newsletter, High Yield Landlord: https://seekingalpha.com/checkout?service_id=mp_1268 Please follow me on Twitter: https://twitter.com/askjussi and subscribe to my YouTube channel.

The REIT management structure matters. Some REITs are internally managed and others are externally managed. To give you a few examples: Medical Properties Trust (MPW) is internally managed because it hires its management as employees of the REIT. But Global Net Lease (GNL) is externally managed as it outsources the management to an outside asset management firm. The external management structure creates significant conflicts of interest as it incentivizes the REIT to issue a lot of shares, often at dilutive prices, to grow the portfolio as large as possible. It hurts shareholders but leads to higher fees for the manager. It is not necessarily illegal and so calling it a scam may be a stretch, but it hurts shareholders.

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Image sources: GNL, ILPT, Interactive Brokers, YCHARTS, Canva

Important Disclaimer: Leonberg Capital OÜ does not hold positions in the REITs highlighted in this video. This video is impersonal and does not provide individualized advice or recommendations for any specific person. Viewers/readers should not make any investment decision without conducting their own due diligence and consulting their financial advisor about their specific situation. This video is for entertainment purposes only and you are responsible for your own investment decisions. The information is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The opinions expressed are those of the publisher and are subject to change without notice. This YouTube channel is managed by Leonberg Research OÜ, a subsidiary of Leonberg Capital OÜ.

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