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SAN DIEGO-If you want to know what’s going to happen to real estate values and performance, just watch what happens to REITs. That was one of the themes sounded Wednesday at the opening of Nareit’s annual conference here as a series of speakers and panels tackled topics relating to the impact of the economic downturn and the continuing credit crunch.

REITs represent a good indicator of how the commercial real estate world is going to perform, Nareit first vice chair Connie Moore commented in remarks preceding a panel that she moderated called “Navigating in Turbulent Waters.” REITs constitute “a window to the commercial real estate market,” said Moore, who is , president and CEO of San Francisco-based BRE Properties Inc., an apartment REIT.

Moore compared the world of commercial real estate to an iceberg and said that REITs represent just the tip of the iceberg, and the rest of the iceberg is hard to see. Nonetheless, Moore said, “The iceberg is all one structure,” so wherever the tip goes, you can be sure the rest of the structure goes too.

The panelists for “Navigating in Turbulent Waters” included execs from retail, office and healthcare REITs, all of whom agreed that the economic downturn and capital markets shutdown are bound to affect all companies. “No one is exempt from these powerful macro forces,” commented panelist Debra Cafaro, the chairman, president and CEO of Chicago-based healthcare REIT Ventas Inc.

Despite the negative news that’s been hitting the press regarding the retail sector, chairman and CEO David Simon of Indianapolis-based Simon Property Group said that, “From the outside, it looks a lot worse than it is.” Simon observed that press reports might create the impression that retail is in a panic mode. “We’re not panicked about retail,” he said. “It’s not as bad in the trenches as the media would seem to indicate.” In particular, Simon noted, retailers are faring better today than they did in the downturn of the early 1990s because retailers today have a much better handle on inventory control.

Another shopping center REIT exec, CEO Peter Lowy of Westfield LLC, pointed out that it’s difficult to make broad, global observations about the state of the retail sector because it varies considerably from country to country and from region to region within nations. For example, UK retailers are struggling but retailers in Australia are doing well because consumer spending there remains strong, Lowy explained. Retail is slowing in the US, he said, but retailers are still taking space in strong markets while vacating underperforming stores.

The panel on “Navigating in Turbulent Waters” was the first in a series of discussions at this year’s annual Nareit conference that included a session Wednesday on “The Real Estate Economy: Weathering the Storm.” The conference, which continues today and Friday, will also include panel discussions today on “The Credit Crisis: Pursuing Debt Finance,” “Across the Border: Searching for Safe Harbors,” and “Preserving Value in Troubled Times.

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