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Concern about the potential impact of overbuilding on office market economics has been supplanted by worries about a falloff in the demand for office space. Does current market pricing already reflect this concern? Real estate has long been an industry in which very high debt levels were common. Since there are no compelling reasons why the real estate industry should carry high debt levels, the current trend toward high leverage ratios is of some concern.  Real estate funds are having their worst year since the industry came of age in the early 1990s. Even after taking September's REIT rally into account, only two of more than 50 such funds were in the black for the year as of September 30.  The real estate industry is significantly better positioned to weather a recession today than in prior periods, posits PaineWebber's Jonathan Litt. 
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Building a national apartment REIT wasn't easy, but you wouldn't know that by talking to Equity Residential's Doug Crocker. |
 BancBoston Robertson Stephens' Jay Leupp says REITs have turned the corner. Why does he think so? And where does Leupp think you can find the best bargains?  UAM Heitman Real Estate Fund co-portfolio managers, Dean Sotter, Tim Pire, and Randy Newsome know a bargain when they see one. So where do these practitioners of GARP (growth at a reasonable price) say they are finding the best values today?  Brokerage firm analysts argue the correction in REIT prices is over. Are they right or was the recent rally only a bounce magnified by the stocks' relative illiquidity? |
 
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