There exists some very lucrative opportunities in small cap REITs at this present moment. If you know what you are doing, you could earn high income along with superior appreciation by building a portfolio today. This is because:
- The difference in valuation between small-cap REITs and large-cap REITs has rarely been this large. While large caps trade at 20x FFO, small caps trade at just around 12x FFO – or a 40% discount to larger peers.
- The massive discount is not justified by fundamental factors, but rather by the discriminate flow of index money towards