REITBull

Decline in REIT Prices Is Likely to Continue

What are you using as a cap rate to get to $20-$27 on IYR?


On Sep 26 12:36 PM Anthony Alfidi wrote:

> Forget about the 50-day MA and look at the cap rate instead. Evaluate
> a REIT or ETF like a physical piece of property. Fair value IMHO
> for IYR is somewhere between $20-27 depending on how you calculate
> the yield.

Commercial Real Estate - Make Up Your Own Mind

"Almost 60% of the loans out there, at least, were securitized in nature."

User,

I have to disagree with you on this. At the end of Q1 only 21.4% of CRE loans were securitized (MBA). New loans are getting done at 60% LTV for class A, infill markets. I wouldn't take Sam Zell's comments at face value either. Remember that he called a bottom in Residential real estate in Spring 2008.


On Aug 03 09:09 PM User 465743 wrote:

> Good article. But you are missing something. The lending at 60% is
> a fantasy. If you have a Class A office building in a major city,
> you may be 50%. If you have a hotel, a strip mall, a big box retail
> center, an asset located in a small town, etc, forget it. There is
> no financing. The banks are not lending the money that the Feds gave
> them. The only money available, really is money for apartments from
> HUD, Fannie Mae or Freddie Mac. Securitization expanded the credit
> markets so that assets that previously did not get financed were
> financed. Almost 60% of the loans out there, at least, were securitized
> in nature. So, maybe TALF will work, but I don't see the same focus
> on the dangers as I did when AIG was going bust. They focused on
> housing first, because it is politically correct. But they are missing
> the boat on commercial in terms of urgency and this will bring on
> a double dip. Commercial real estate doesn't work without debt. And
> the banks are not helping and the Feds are not helping. If there
> is no debt, there is no market and values are suspect. The jobs multiplier
> for commercial real estate is huge. Big players are taking advantage
> of low Libor rates and sitting on assets. Debt service is being paid
> but their values are in the tank. Zell is right. Eventually assets
> have to be refinanced and it will be a bloodbath. Write your Congressman,
> because they aren't focused on this and are clueless.

General Growth Properties Files for Bankruptcy

Okay, I feel like a total hypocrite, but I just put a very small position on SRS. It was just too attractive at 26 and change. I still have a much larger position on the long side and will continue to buy URE....Just a short term trade but I thought I would come clean.

General Growth Properties Files for Bankruptcy

Or are the dilutions already priced in? Everyone and their mother saw the offerings coming.

General Growth Properties Files for Bankruptcy

Take a look at the holdings in IYR for your answer on SRS. GGP is nowhere to be found and is the exception not the rule. SPG, KIM, AMB have had success raising capital in the public markets. SRS was bled dry a long time ago. When your average Joe is talking about getting in on the action (i.e. shorting CRE) the bubble is about to pop or already has.

Disclosure: long URE


On Apr 16 11:49 AM [e-mail] wrote:

> Can someone ... ANYONE ... explain to me why GGP, the second largest
> mall operator in the US, is declaring bankruptcy and SRS is within
> spitting distance of an all-time low on the same day?

A Prefabricated Future?

User310318,

I was about to respond the same way to smlcap.

Many people mistakenly think that modular homes are trailers. They are not. Modular homes are normal homes constructed in large wharehouses as modules. The modules are shipped to the construction site and assembled on a concrete foundation. A passerby would not be able to tell the difference between a stick built and a modular home and has no effect on financing.

September Case-Shiller Housing Analysis

Another seeking alpha article relating IYR to residential housing...hurts credibility

Housing Data Shows Downturn Could Be Prolonged

I agree with this article, however, I am not sure why IYR is referenced as a related stock. IYR covers commercial real estate, not residential.

Time to Pick Up the Pieces of the Global REIT Thud

I agree that CRE has some pain to face ahead. There will be a correction in values as lenders push LTV's lower and the consumer continues to be weak. Many REIT's are highly leveraged with short term debt. However, alot of these loans will not come due in the coming year. It is risky to be long REITs, but I feel that equity traders will oversell this sector. Do not get me wrong, I am bullish on REITs at their values traded this past week. I do not believe they will return to their 2007 values anytime soon nor will I be a buyer if they continue to rebound as they did late Friday.

Time to Pick Up the Pieces of the Global REIT Thud

I recently sold off my bear position in REITs and bought URE. It may not be a good comparison but URE is trading at close to the same price as XHB, which tracks homebuilders. This tells me that URE is oversold or XHB is overbought. Commercial real estate will recover before residential so I am long URE at these prices.