Granite REIT vs. Dream Industrial: Which Stock Offers the Better Income Case?

A warehouse rarely makes the news until someone can’t get the thing they ordered.

For investors, that’s part of the charm.

Tenants pay for the space whether the boxes inside hold running shoes or car parts.

Two landlords can collect similar rent cheques and still offer investors very different deals.

Start with the rent Industrial real estate investment trusts (REIT) own space for manufacturing, storing and moving goods.

They pay out some of the cash as distributions.

If a tenant leaves, the owner can lose rent and still have to pay for repairs, taxes and interest while it looks for a replacement.

I’d start with the cash each landlord has left after routine property spending.

Adjusted funds from operations (AFFO) is one way a REIT estimates that amount.

Definitions differ, so I like to compare each trust’s payment with its own cash earnings before comparing the yields.

A rent increase can take years to show up across the whole portfolio.

Leases expire on different dates, and a landlord may have to offer a tenant money for renovations.

I’d watch how much higher rents add to the cash left after those costs.

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