REIT I rate's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/295006/comments http://seekingalpha.com/article/105021-reits-is-now-the-time-to-buy?source=feed#comment-301910 301910 This article seems "oxymoronish" or self contradictory. At first the author makes a good case for why the REITS are in trouble and should go lower at least through year 2009 (which is the truth): ... The author then goes on to recommend REITS simply because they have gone down so much or are "overblown". I ask why, if you see REIT dividends declining, vacancy rates increasing, property values declining, tight credit, declining leverage, declining rents, with no clear sign of any of these trends reversing, How can you recommend investors buy REITS now? Is it so they can catch the beginning of the uptrend in the year 2010, 2011 or 2012. With all the pain to come in the commercial real estate sector, I don't see the logic in jumping in now or even the first half of 2009. The second half of 2009 may even be too early because the commerical real estate market is less than one year into the decline stage of its cycle. In the past, decline cycles have lasted upwards of three years on average, and are then followed by a long flat period.
Quotes from this article:
-"Housing will not be coming back anytime soon"
-"with job growth negative in most markets in the US, it will be difficult for landlords to increase rental rates"
-"REIT yields are now averaging over 8%, the highest in about five years. Some REITs have already cut their dividends, and more will in 2009 as companies try to conserve capital"
-"Loan delinquencies in commercial real estate are definitively picking up, and this will continue in 2009. With less debt capital available and a weakening economy on all fronts, cap rates are rising and commercial property values are decreasing"]]> Mon, 10 Nov 2008 10:58:39 -0500 This article seems "oxymoronish" or self contradictory. At first the author makes a good case for why the REITS are in trouble and should go lower at least through year 2009 (which is the truth): ... The author then goes on to recommend REITS simply because they have gone down so much or are "overblown". I ask why, if you see REIT dividends declining, vacancy rates increasing, property values declining, tight credit, declining leverage, declining rents, with no clear sign of any of these trends reversing, How can you recommend investors buy REITS now? Is it so they can catch the beginning of the uptrend in the year 2010, 2011 or 2012. With all the pain to come in the commercial real estate sector, I don't see the logic in jumping in now or even the first half of 2009. The second half of 2009 may even be too early because the commerical real estate market is less than one year into the decline stage of its cycle. In the past, decline cycles have lasted upwards of three years on average, and are then followed by a long flat period.
Quotes from this article:
-"Housing will not be coming back anytime soon"
-"with job growth negative in most markets in the US, it will be difficult for landlords to increase rental rates"
-"REIT yields are now averaging over 8%, the highest in about five years. Some REITs have already cut their dividends, and more will in 2009 as companies try to conserve capital"
-"Loan delinquencies in commercial real estate are definitively picking up, and this will continue in 2009. With less debt capital available and a weakening economy on all fronts, cap rates are rising and commercial property values are decreasing"]]>