A.I.M. Users Bulletin Board

[lostcowboy]

Hi Bernie, sorry to take so long to get back to you. The cold snap we have had here in Texas has keep me out of my computer room. As you noted in your reply there are two parts of the article that are of interest.

Says Stuart Seeley, head REIT analyst at UBS Warburg and a master of understatement: Bush's proposal "may be a negative for the REITs." David Shulman, who runs real estate research at Lehman Brothers, puts it more plainly: Even a watered-down version of Bush's plan "looks likely to the detriment of REITs. It is a big deal." Shulman believes many REITs could ultimately choose to lower their dividends and convert to ordinary taxable corporations.

The thinking is simple. REITs aren't getting an effective 50% hike in dividend yields. But other stocks would. So any investor who'd been holding REITs primarily for the dividend income would bail out.

The bottom paragraph, would be good for anyone AIMing the stock.

The top paragraph, is even more interesting, if the REITS decide to convert back to ordinary taxable corporations and lower their dividends. In the short term, this could be bad for people depending on the dividends, but could be good in the long term, as the REITS could keep more of the net income for re-investing.
As you said, Naturally there will be analysis at that time to check out the company's financial situation.