OAK BROOK, IL-As the economy continues to remain sluggish, theretail and lodging sectors tend to lag behind office, industrialand especially multifamily. But executives at InlandAmerican REIT's Q2 earnings call remained bullish on thesetwo sectors, which makes up approximately two-thirds of the REIT'sportfolio.

There is good reason for this – the portfolio's NOI increased by10.5% year over year (with retail showing a 9.4% increase andlodging up by 24.7%) and same-store NOI was up 1.9% -- retailincreased by 0.1% compared to the same time last year, with lodgingboosted by 5.3%. The numbers and other factors led InlandAmerican's principal financial officer Jack Pottsto say that the FFO guidance would be maintained at $.50-$.51 forthe year. "There's a potential for some disposition and a net ofacquisitions for the latter half of the year, and some slightdilution while rotating capital," he explains.

Targeted for disposition is the multifamilyproperty component of the REIT's portfolio. The timeis right to divest in this area, notes TomMcGuinness, president of Inland American Business Managerand Advisor. Cash flow is good on the multifamily side and with thesector continuing to attract investors, it's time to divest.