Much has been made about the privatization of REITs, and mostexperts agree that it is indeed a trend. Market forces fromrelative valuations to the cost and burden of Sarbanes-Oxley havebeen credited as the driving forces behind it. But privatization isonly part of a larger trend, one that speaks to the health andvalue of the REIT market. Trusts are being snapped up by privateand public players alike, and while the private side is clearlyhungrier, plays such as Plymouth Meeting, PA-based BrandywineRealty's $3.3-billion purchase of Prentiss Properties and theTrizec portion of the $5-billion GE/Arden deal cannot beoverlooked. Taken as a whole, the message here may not be one somuch of the joys of privatization as much as the wisdom of owningREITs in the current market environment.

We should also keep in mind that nothing is final or fatal, andthe privatization trend in no way signals the end of REITs as weknow them. Rather, it's an expedient, a navigation for the currentmarket waters.

Privatization is "definitely a trend," according to GregoryPressman, a partner in the real estate department ofManhattan-based law firm Schulte, Roth & Zabel LLP. "The marketis simply undervaluing the stock compared to what managementbelieves is the real value of their assets. It's a classic buybacksituation."