“Something is rotten in the state of Denmark.”

It’s one of the most famous lines from Shakespeare’s Hamlet, right up there with “Get thee to a nunnery” and “To be or not to be.”

The funny thing is that, while the latter two are made by Hamlet himself, the “rotten” comment, to quote Spark Notes, “is spoken by Marcellus in Act I, scene iv (67),” a minor character. It’s while:

“… he and Horatio debate whether or not to follow Hamlet and the ghost [of his father] into the dark night. The line refers both to the idea that the ghost is an ominous omen for Denmark and to the larger theme of the connection between the moral legitimacy of a ruler and the health of the state as a whole. The ghost is a visible symptom of the rottenness created by Claudius’s crime.”

Something was rotten indeed.

Now, that early in the play, it’s not clear exactly what’s the matter behind the matter. It’s not until the next scene when we realize that Claudius, the new king of Denmark, is in fact the worst of the worst: a man who would (and did) kill his own brother to steal his crown and wife.

Now, I’m not accusing the following three real estate investment trusts, or REITs, of anything so “foul,” as Hamlet’s father calls it. But there’s something rotten nonetheless about the following REITs that need to be recognized.

Recognize the Warning Signs

Personally, I’m happy there’s not a 100% correlation between the two. Because that would mean I was one very unhappy ghost.

As it is, I’m very alive and pretty pleased with my current situation. My brother isn’t after my head or my wife. I have five wonderful children, two sons-in-law, and a grandson I’m insanely proud of. I own a house, a business, and income-producing rental properties, not to mention a portfolio full of dividend-paying REITs.

I know last year was a rough one for REITs on the short-term stock-price appreciation scale. But I expect this year to be much more positive in that regard.

And even if it isn’t, the positions I have are overwhelmingly in strong companies with solid management. Therefore, they promise long-term stock gains and steady, growing dividend payments.

This is very important.

Like any other investor out there, I don’t want to own just any old shares. I want to own the best of the best that drive up my profits in the most meaningfully sustainable ways possible.

That’s everyone’s goal, though we admittedly all have different takes on what those “meaningfully sustainable ways” look like.

This is okay to some degree. We all have our different personalities, wants, needs, responsibilities, income levels, etc. that need to be considered.

But those diverse considerations only need to be considered so far. There are certain risks that are just never worth taking, no matter your specific situation.

When something is rotten, it’s rotten.

And it would be foolish to try to shrug off those warning signs. Ignoring them will only put you and your profits in peril.

A Wise Choice for Investors

“But, Brad,” you might be saying, “Hamlet didn’t ignore the rottenness in Denmark, and he still ended up dead. So why not dance with the devil?”

That’s true, but remember that this isn’t a perfect analogy at all. In this case, not only am I not a very unhappy ghost… you’re also not expected to avenge anything or anyone.

You only need to recognize what’s very, very wrong and avoid it.

Don’t be swayed by the chance of recovery. It’s too slim to take seriously.

Don’t be swayed by high dividend yields. They’re high because they’re unsustainable. And once the company in question finally admits as much, that dividend will come crashing down.

The stock price will suffer, too. This is inevitable. It’s never “priced into the stock already,” as too many investors tell themselves too many times.

In the same vein, don’t tell yourself that “this time is different.” It almost never is. So you’re much, much, much better off avoiding these kinds of companies altogether and putting your capital into the kind of strong, solid, steady assets I already mentioned.

Did you get lucky before? That’s great. I’m happy you didn’t get burned. But you can’t base your long-term success on getting lucky again.

Personally, I wouldn’t recommend basing your short-term success on it again, either.

Take a page from Hamlet in remembering “that one may smile and smile and be a villain” still.

Though, with all due respect to that play, character, and the author behind them… I don’t think the real question is “to be or not to be.” It should actually be, “to be wise or not to be wise.”

My recommendation is to choose the former every time. In which case, just say no to the following three REITs.

Industrial Logistics Properties Trust (ILPT)

ILPT is an industrial REIT that is externally managed by The RMR Group and specializes in the ownership and leasing of industrial and logistics properties.

The externally managed REIT has a market cap of approximately $268.0 million and a 60.0 million SF portfolio comprised of 413 properties located across 38 mainland states and the island of Oahu, Hawaii.

226 of their properties are located on the island of Oahu, Hawaii and consist of buildings, land parcels for lease, and easements. As of their most recent update, almost a third of their annualized rental revenues (“ARR”) came from their Hawaii properties, with their Hawaii properties generating