It is clear that REITs can no longer be considered a safecounter cyclical investment as they have in the past, finds a newlyreleased report by Ernst & Young, called Riding out the storm:Global Real Estate Investment Trust Report 2008."
For the last eight years REITs have been the go-to alternativefor investors, ever since the dot.com implosion, Kjerstin Hatch,principal and portfolio director for Madison Capital Management inGreenwood Village, CO, tells GlobeSt.com. "For a long time nowREITs have benefited from a low interest rate environment. Nowthere is a re-pricing of leverage, which is troublesome for many ofthese companies, of course."
Bill Staton, an investment advisor and author of the forthcomingbook "Double Your Money in America's Finest Companies: TheUnbeatable Power of Rising Dividends," also fingers too muchleverage as the culprit behind many REITs' troubles right now. "Allyou have to do is look as far as General Growth Properties to seethat," he tells GlobeSt.com.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
