NEW YORK CITY-Panel discussions throughout the day at the NAREIT Institutional Investor Forum seemed to outline the changing shape of the real estate market on both a national and global basis. While REIT leaders at one panel put the high-ticket sales trend into perspective, others addressed the influx of Australian players in the market and the likelihood of REITs coming to the UK.

Real estate has been repriced and, according to Steven Roth of Vornado, "This is not a spike. This is for real. People who say 'sell' to take advantage of prices are wrong."But the trend does make potential buyers more selective, as David Simon of Simon Properties stated: "We're deliberately not bidding on malls at these prices, so we're stepping up our development pipeline."

And while the highs of the current market can't last forever, Simon, like Roth, doesn't define it as a bubble. "Not as long as money and liquidity are where they are," he stated. "Retail is strong."

And that strength can only continue, Roth added. "Outside of malls, retailers like Home Depot and Best Buy have to build 1,000 new stores a year," he said. "Rents will rise even though interest rates may flip round."

On the office side of the market, the Vornado chief pointed out that replacement costs are tracking the market trend, and he noted that if Midtown replacements are currently at $550 per foot, there's every reason to expect them to hit $700 or even $1,000. "The winner," he said, "is the investor who buys confident about what the future will bring."

Asked if the global players were getting too big, Michael Pralle of GE Commercial Finance's real estate division stated that, with "a $30-billion balance sheet, size is not an advantage in the US."

"We've been criticized for years because of our size," reflects Simon. "Yet a lot of people have tried to replicate us. In the end, size and strength of financial performance wins out."

Global reach is being expressed increasingly by Australian players, and in a seminar that treated this topic, NAREIT president and CEO Steven A. Wechsler reported that Australian investments in the US totaled about $3.5 billion in 2004, second only to German players.

But that may not last as long as the repricing trend, and moderator Don Suter of Macquarie Capital Partners stated frankly that while we should all expect Australia to continue as "an importer of capital, that capital will probably start going to other markets," than the US as offshore investors hunt for better yields.

But that capital is still finding opportunities in the US, as Mark Baillie of Macquarie Countrywide Trust proved. Before the firm's recent, $2.7-billion acquisition of CalPers/FirstWashington's retail portfolio (a deal it did with partner Regency Centers), "Our exposure in the US was approaching 50%. Now, three quarters of our portfolio exists in the US."

The ongoing conversation of REITs in the UK continued at the event yesterday, and at a seminar addressing the topic panelists agreed that current legislation would pass. But there are worries.

Martin Barber of Capital & Regional plc expressed his concern that the final law would be "overlegislated and overdesigned."

Stephen Hester of the British Land Co. plc countered that there is "such a massive flow of funds leading the charge that reasonable legislation will come through without artificial restrictions."

If the government does fall down, he worries it will be over the issue of cross-border taxation. "The only area of difficulty can be in details of the tax," he said, "especially when it comes to tax treaties."

The NAREIT Institutional Investor Forum concludes today.