PUBLIC REAL ESTATE COMPANIES MAY BE
LAGGING THE BROADER STOCK MARKET,
BUT THEY’RE STILL THE TOPS IN THE
COMMERCIAL REAL ESTATE ARENA.
HOW LONG WILL THE REIT RUN LAST?
Five years ago, a New York Times headline asked, “REITs Are Down, but for How Long?” What reporter Vivian Marino described asan “enduring rally” in real estate investment trusts
came to an end when “turbulence
in the credit markets rattled the
confidence of commercial investors
and effectively halted the frenetic
pace of REIT privatizations.”
Back in 2007, many were asking the question Marino posed in
her headline: How long will REITs stay down? Not too long. After
finally hitting the bottom in 2009, REITs came roaring back to 2007
pre-crash levels by 2012. In 2013, REITs are roaring even louder.
But how long will the bull market last? Is a bear market breathing
down REIT executives’ necks already? History is likely to repeat
itself, but how long before we turn the page? That depends on
whom you ask.
Equity REITs dipped about 7% in August, while mortgage REITs
dropped about 3.5%, according to the National Association of Real
Estate Investment Trusts’ latest Quick Study. Brad Case, NAREIT’s
senior vice president for research and industry information, says,
“The market has been having a tough time, and REIT investors
have been having a little bit tougher time.”
By Jennifer LeClaire