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NEW YORK CITY-Regional mall REITs will continue to be one of the best-performing sectors in real estate next year according to a press conference yesterday held by Cohen & Steers executives in Manhattan. “The retail sector will continue to do well,” said Martin Cohen, co-chairman and -CEO of the locally based REIT management firm. “The mall has now proven that it’s the most durable, attractive investment that there is.”

During the press conference, officials also announced their acquisition of a 50% stake in the stock of Houlihan Rovers, a Belgium-based global real estate securities asset manager, with about $500 million in assets. To read that story, please click here .

Despite the negative publicity malls have lately received compared to other shopping venues, most people still buy their holiday goods at the enclosed destinations, Cohen said. And he didn’t speak as favorably about other types of retail real estate. “Strip centers are not going to be the biggest beneficiaries of a strong economy,” Cohen predicted.

Just over 20% of Cohen & Steers Realty Focus Fund is invested in regional malls. Nearly 6% of that fund has interests in the Arlington, VA-based Mills Corp., which Cohen & Steers executives called a strong performer because of its developments in the US and Europe as well as its acquisition strategy. “The Mills can develop and generate high returns, but they’re also buying B-minus malls and adding value,” said Robert Steers, also co-chairman and -CEO of the firm.

Cohen predicted that the only regional mall players in the industry that aren’t in danger of a potential takeover are behemoths General Growth Properties and Simon Property Group. “There’s been a lot of consolidation, and the smaller mall companies might be susceptible to that offer they can’t refuse,” he said.

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