It was just six months ago that my Special Situations portfolio took a starter position in Washington Prime (NYSE:WPG), a real estate investment trust newly spun off from Simon Property Group (NYSE:SPG). Because of a significantly better opportunity on the horizon, I'm opting to sell the stock and redeploy those funds elsewhere.

Why sell now?
Washington Prime originated in Simon's spin-offs of its smaller malls and shopping centers in its bid to refocus on the company's highest-performing properties. But while Washington Prime's properties were the less desirable of the two, they were not undesirable. Occupancy at the smaller REIT has been stable and slightly growing, and it pays a nice dividend yield.

My decision to sell Washington Prime is based on two factors. First, I wonder how much room the stock has to run, given the challenging market for mall properties over the last decade. The stock comprises about 0.5% of my Special Situations portfolio now, and given the stock's 16% decline, not including dividends, the effect is minuscule on the portfolio's results. I took an initial position to follow the company. But it's unclear how much the portfolio is paying for the company's prospects today.

Second, I have an attractive and undervalued stock on my radar, with much clearer upside and an even larger dividend than that offered by Washington Prime. So I think the capital is best put to work somewhere else. If you'd like to know what this high-yield stock is, follow me on Twitter: @TMFRoyal. And check out my dedicated discussion board.

Foolish takeaway
On the next market day, my Special Situations portfolio will sell its position in Washington Prime. Soon after I'll put it to work in a high-yield stock with substantial upside from today's prices.

Jim Royal has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.