malach hamovess

Mack-Cali Late to the (Follow-On) Party

CLI's wait of a few weeks after the others sold additional equity was quite fortuitous. It sold at a much more favorable price with either a greater amount of proceeds or far less dilution than had it sold 2-3 weeks ago.

Now we know where all that money "sitting on the sidelines" is going; it's recapitalizing the REITs.

The Great REIT Unravelling Begins? Simon Property Group Defaults on Loan

The Source was a uniquely poorly laid out, poorly positioned, poorly tenanted piece of drek in an area overstuffed with shopping.

If Simon is walking away from the property by defaulting on a non-recourse loan, it's to their ultimate credit.

Sooner or later, the idiot who made the loan will be fired, and the holder of the loan will take a lot less than its face for the property.

Real estate investing includes dropping properties; real estate lending includes underwriting for good and bad times - a skill that has long since been forgotten.

6 REITs for a 'Recovery Portfolio'

there's a ton of analysis to be done before making any significant investment in apt reits; they may still suffer rent income erosion when a soft job market steals their pricing power and they are forced to offer significant concessions to attract or retain tenants.

softness in employment, for all the talk of the Wall Street execs being canned, is still concentrated in the lower half of the workforce - those who are more likely to rent. tougher collection and eviction environments, along with the inability to maintain occupancy can wreck havoc with cash flow and income.

Additional softness in these stocks can be anticipated if the credit squeeze continues; even those reits wih reasonably healthy balance sheets are forced to refinance short and intermediate term mortgages which they had gravitated to in 2002 - 2007; as these mortgages must be refinanced, there is often a need to post additional cash if the new lending standards require a lower LTV ratio.

It's not going to be a slam-dunk for quite a while.

Commercial Real Estate Offering 8%-9% Cap Rates, Anyone Interested?

Higher cap rates are reflective of lowered expectations for growth in the underlying property revenue streams. Heading into an indeterminate recession it may not be realistic to assume that an Avalon Bay can roll over rents at higher rates, or that a Simon Properties can keep its inline stores occupied by profitable retailers.

Those who differ are invited to buy these stocks at "bargain prices".