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Investors nervous about real estate fundamentals might breathe a lot easier if they took the time to review the latest data for office and industrial markets, nationwide. What does it take to earn an investment-grade rating? How much debt is too much? Is real estate condemned to relive its past? For answers to those and other burning questions of the day, we turned to Lisa Sarajian, who oversees the REIT rating effort at Standard & Poor’s.  1998 is a year real estate fund managers would no doubt just as soon forget. For the first time since the REIT bull market began in 1991, roughly half of the funds are trailing their benchmarks.  Only a handful of REIT managements have strong franchise value and are adept at life in the public markets. Those that don’t may be able to stay public for a while, but ultimately they will become takeover bait, argues Salomon Smith Barney’s David Sherman. 
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Nearly six years after it came public, Taubman Centers is doing an abrupt about-face, returning to its roots as a shopping mall developer. Can its new strategy pay off for shareholders? |
 Real estate fundamentals remain strong. Most REITs are trading at discounts to their net asset values. Dividends are more conservative than in the past and growing at a healthy clip. And REIT earnings growth should outpace estimates for the S&P 500 next year. So what’s wrong with this picture?  Michael Hoeh’s steady hand and an investment strategy with a twist make Dreyfus Real Estate a fund worth keeping your eye on.  1998 is likely to be the worst year for REITs since the sector rebounded in the early 1990s. What happens next will be driven by technical factors rather than property fundamentals. |
 
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