malach hamovess

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.