Amid positive signals emanating from the uptick in housing prices and an improving outlook for consumer spending, the housing sector is gradually stabilizing. Both new and existing home sales have increased during the last four consecutive months and are now 32% and 17% above their recent lows, respectively. Single-family housing starts have also risen 37% from their low point, and inventories of homes-for-sale have fallen sharply.

Equity REITs rebounded nicely in the third quarter, recording total returns of 33% (total return FTSE NAREIT Index) vs. a 15% gain each for the S&P and the Dow. The strong third quarter returns marked the second consecutive record-setting performance of equity REITs after a dismal performance in the first quarter of 2009.

In what has been a volatile year, equity REITs gained approximately 29% (total return FTSE NAREIT Index) in the second quarter after falling 32% in the first quarter. So far in October, equity

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Amid positive signals emanating from the uptick in housing prices and an improving outlook for consumer spending, the housing sector is gradually stabilizing. Both new and existing home sales have increased during the last four consecutive months and are now 32% and 17% above their recent lows, respectively. Single-family housing starts have also risen 37% from their low point, and inventories of homes-for-sale have fallen sharply.

Equity REITs rebounded nicely in the third quarter, recording total returns of 33% (total return FTSE NAREIT Index) vs. a 15% gain each for the S&P and the Dow. The strong third quarter returns marked the second consecutive record-setting performance of equity REITs after a dismal performance in the first quarter of 2009.

In what has been a volatile year, equity REITs gained approximately 29% (total return FTSE NAREIT Index) in the second quarter after falling 32% in the first quarter. So far in October, equity

...

Amid positive signals emanating from the uptick in housing prices and an improving outlook for consumer spending, the housing sector is gradually stabilizing. Both new and existing home sales have increased during the last four consecutive months and are now 32% and 17% above their recent lows, respectively. Single-family housing starts have also risen 37% from their low point, and inventories of homes-for-sale have fallen sharply. Equity REITs rebounded nicely in the third quarter, recording total returns of 33% (total return FTSE NAREIT Index) vs. a 15% gain each for the S&P and the Dow. The strong third quarter returns marked the second consecutive record-setting performance of equity REITs after a dismal performance in the first quarter of 2009. In what has been a volatile year, equity REITs gained approximately 29% (total return FTSE NAREIT Index) in the second quarter after falling 32% in the first quarter. ...

Equity REITs have rebounded nicely over the past few months. So far this quarter, equity REITs have posted total returns of 36% (total return FTSE NAREIT Index). All sectors are up in the 2nd quarter; the best performing sectors were lodging (102%), regional malls (68%), shopping centers (42%), and industrial (37%).

Overall, REITs are still down 7% in 2009, vs. a drop of 3% in the Dow and a gain of 2.8% in the S&P.

OPPORTUNITIES

* Many REITs are still trading at discounts to NAV [net asset value], a good buy signal. Historically, over the past 7 or so years, REITs have traded near or in excess of NAV * Even with dividend cuts and share price gains, the average yield for equity REITs is still over 6%. Yields are well in excess (300 bps) of the 10-year Treasury, although the spread has narrowed considerably.

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Equity REITs have rebounded nicely over the past few months. So far this quarter, equity REITs have posted total returns of 36% (total return FTSE NAREIT Index). All sectors are up in the 2nd quarter; the best performing sectors were lodging (102%), regional malls (68%), shopping centers (42%), and industrial (37%).

Overall, REITs are still down 7% in 2009, vs. a drop of 3% in the Dow and a gain of 2.8% in the S&P.

OPPORTUNITIES

* Many REITs are still trading at discounts to NAV [net asset value], a good buy signal. Historically, over the past 7 or so years, REITs have traded near or in excess of NAV 

* Even with dividend cuts and share price gains, the average yield for equity REITs is still over 6%. Yields are well in excess (300 bps) of the 10-year Treasury, although

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Equity REITs posted somewhat of a comeback last week after a rough 1st quarter. So far in March, REITs have rebounded 7% (total return FTSE NAREIT Index). All sectors are up in March; the best performing sectors were apartments (16% return), industrial (16%), and lodging (15%).

Overall, REITs are still down 30% so far in 2009, well behind the S&P and Dow. The March mini-rally is nothing to get excited about and the sector could continue to sell off.

OPPORTUNITIES

That said, there are still some positives: 1) Most REITs are trading at large discounts to NAV [net asset value], a good buy signal. Historically, over the past 7 or so years, REITs have traded near or in excess of NAV 2) Even with dividend cuts, the average yield for equity REITs is still over 9%. Yields are well in excess (600bps+) of the 10-year Treasury 3) If commercial real estate fundamentals do ...

Equity REITs posted somewhat of a comeback last week after a rough 1st quarter. So far in March, REITs have rebounded 7% (total return FTSE NAREIT Index). All sectors are up in March; the best performing sectors were apartments (16% return), industrial (16%), and lodging (15%).

Overall, REITs are still down 30% so far in 2009, well behind the S&P and Dow. The March mini-rally is nothing to get excited about and the sector could continue to sell off.

OPPORTUNITIES

That said, there are still some positives:   

1) Most REITs are trading at large discounts to NAV [net asset value], a good buy signal. Historically, over the past 7 or so years, REITs have traded near or in excess of NAV     2) Even with dividend cuts, the average yield for equity REITs is still over 9%. Yields are well in excess (600bps+) of the 10-year Treasury     3) If commercial ...

Highlights include Avalon Bay Communities, Inc. (AVB) and Vornado Realty Trust (VNO).

Equity REITs posted somewhat of a comeback last week after a rough 1st quarter. So far in March, REITs have rebounded 7% (total return FTSE NAREIT Index). All sectors are up in March; the best performing sectors were apartments (16% return), industrial (16%), and lodging (15%).

Overall, REITs are still down 30% so far in 2009, well behind the S&P and Dow. The March mini-rally is nothing to get excited about, and the sector could continue to sell off. Here's why:   

1) REITs still depend on access to debt to fund growth, and with the credit markets still frozen, it will be difficult for companies to raise cheap debt     2) Going forward, ...