David Lee, fund manager of T.Rowe Price Real Estate Fund, gave his top picks in an interview with Business Week; David Lee has managed the $2.5 billion T. Rowe Price Real Estate Fund (TRREX) since it opened in October 1997. Lee’s fund has gained almost 13% a year over the past 10 years, beating the S&P 500 by more than 8 percentage points annually and performing better than three-quarters of all real estate funds.

He is very optimistic about supply. There hasn’t been a lot of new commercial real estate construction this year, which is good for an eventual recovery.

He really likes the mall companies. There’s good scarcity value in regional malls and not a lot of construction going on in the mall business. Simon Property Group is one pick.

And, he looks for companies that are international in scope for real estate diversification:

international expansion by AMB (AMB), ProLogis (PLD), Kimco Realty (KIM) and Simon, for example. That’s how he’s getting international exposure. And this might be the best asset class for international expansion

Track David’s picks at:

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