An interesting article in the Wall Street Journal Monday discusses the newfound hope that has swept through the REIT space in recent days.
“Vacancies are still zooming up and property values are still crashing down. But for now, investors seem to have enough confidence in the long-term value of office buildings, warehouses and shopping malls to provide fresh capital to REITs they think can survive the credit crunch and the recession.
Cohen & Steers Inc. Co-CEO Martin Cohen, an influential REIT investor … says he is willing to provide equity to 10 to 20 “realty majors” — the leading companies that will be able to ride out the downturn. The others will have to fend for themselves and about one-third of all REITs, Mr. Cohen estimates, simply won’t survive.
Those might become merger or acquisition targets for private funds and healthier REITs. With a shakeout still to come, investors contemplating the sector need to choose carefully.” [via WSJ]