Wednesday, August 8, 2012

How to buy REITs in a crowded market

Bargains are gone, but thin supply supports prices

June 01, 2012|Rachel Koning Beals

CHICAGO (MarketWatch) — Real Estate Investment Trusts have been a shelter in the storm.
REITs make for a near-perfect recovery story. This battered area bounced back from the credit crisis faster than the rest of the financial sector and has provided income-oriented investors with juicy yields. REIT mutual funds, for example, rose 7.5% on average in 2011, beating the Standard & Poor’s 500 Index’s(US:SPX) 2.1% total return.
Indeed, the popularity of this bond and stock hybrid is largely due to those plump yields. The average REIT yielded 4.34% last year, compared to an average 1.87% yield for a 10-year Treasury note, according to the National Association of Real Estate Investment Trusts.
Except REITs’ attributes are no secret. Demand for REITs may have squeezed out much of their value.
Scott Crowe, global portfolio manager at Cohen & Steers, said the run-up, especially in U.S.-focused investments, has dulled some of REITs’ appeal. Still, he expects average earnings growth across REITs in the respectable high-single-digits.

Yet, as a diversifier and inflation hedge, REITs have a place in most portfolios. And if you already have REIT exposure, it’s probably worth keeping.
REITs hold physical properties that generate revenue from rent payments — think shopping malls, hotels, hospitals, offices and timberland. They receive favorable tax treatment for distributing a significant portion of revenue as dividends: a win-win for both the REIT and investors.
“REITs provide another layer of diversification since the assets show lesser correlation to the overall stock market,” said Tom Lydon, president of Global Trends Investments and editor of “REIT ETFs provide investors with a broad, diversified mix, which helps investors to avoid picking out the wrong REIT security,” he added.
Scant supply
Some experts argue that REITs are too closely aligned with stocks under tough market conditions. Investment in REITs plunged almost 50% during the real estate market collapse and financial crisis. And the category’s recent gains are already showing signs of cooling. The Dow Jones All REIT index posted a total return of 10.5% in the first quarter, down from a 15% gain in the fourth-quarter of 2011.
Marc Halle, managing director at Prudential Real Estate Investors, said the fundamental case for REITs is intact.
“Nothing moves up in a straight line,” he said. “Real estate is a simple business of supply and demand and a look through the major markets reveals no significant new supply down the road.”
After all, major commercial projects don’t pop up overnight; construction typically lasts three to five years from groundbreaking. And, as global banks deleverage, only real estate firms able to borrow in capital markets have had the financing to expand. Balance sheets are back in order, favoring the soundest REITs.
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Tuesday, August 7, 2012

NAI Global’s Chief Economist Sees Unprecedented Global Government Intervention in his Latest White Paper


NAI Global’s Chief Economist Sees Unprecedented 
Global Government Intervention in his Latest White Paper

“As regulatory legislation becomes increasingly burdensome, 
businesses are at the mercy of an unfamiliar and ever changing political landscape,” 
states NAI Global Chief Economist Dr. Peter Linneman.

PRINCETON, NJ, August 6, 2012 – In his latest white paper, “Unprecedented Global Government Intervention,” NAI Global Chief Economist, Dr. Peter Linneman, discusses the dangers and pitfalls of the extraordinary wave of global government intervention we are currently witnessing in capital markets. Citing historical examples, he demonstrates that intervention leads to prolonged periods of stagnation and uncertainty; “In all, government activity is now deterring the very investment it was hoping to spur.”

“As we enter the third quarter of 2012, we are seeing the pattern of unprecedented government intervention continue,” states Dr. Linneman. “Governments around the world are using the powerful tools at their disposal; spending, regulations, fiscal policy, and taxes to interfere with the free market in hope of sparking economic recovery. The result is that instead of recovery, we are experiencing further distress as the Euro crisis intensifies and even Brazil and China’s economies slow.”

On the U.S. economy, Dr. Linneman notes, “the irony is that the belief in big government is occurring even as trust in the U.S. government (and most other governments) is near an all-time low.”  He adds, “Huge deficit spending causes private spending to decline as the private sector realizes that it has a greater future tax liability of equal magnitude. We have witnessed this in the U.S., almost dollar-for-dollar in deficit spending.”

The white paper also addresses the historical cause and effects of regulatory intervention, unemployment statistics, and the upcoming Fiscal Cliff set to unfold in January 2013.

Unprecedented Global Government Intervention follows Global Economic Round-Up where Dr. Linneman evaluated the state of the global economy in Europe, Asia and the United States, including the impact of the continuing European debt crisis, the rise of China and India and the current state of the U.S. economic recovery.  NAI Global’s white papers and research resources are available for free download under Publications/Articles & White Papers.

About NAI Global
NAI Global is one of the leading commercial real estate services providers worldwide. Headquartered in Princeton, New Jersey, NAI Global manages a network of 5,000 commercial real estate professionals and 350 offices in over 55 countries, and completes over $45 billion in annual transaction volume. Since 1978, NAI Global clients have built their businesses on the power of NAI’s expanding network. NAI Global’s extensive services include corporate real estate services, brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain consulting and related advisory services. To learn more, visit

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Contact:  Vito Barbiera, Director of Communications,

Monday, August 6, 2012

FD Stonewater Sells McAllen, Texas Property To GSA Investor Group

FD Stonewater announced today that it has sold a recently delivered, build-to-suit facility under long-term lease to the U.S. Government in McAllen, TX. The buyer of the 24,000-square foot U.S. Immigration and Customs Enforcement (ICE) facility was a New York City-based investment group focused on buying Government assets with long-term leases in place.
Arlington, VA (PRWEB) August 03, 2012
FD Stonewater announced today that it has sold a recently-delivered, build-to-suit facility under long-term lease to the U.S. Government in McAllen, TX. The buyer of the 24,000 square foot U.S. Immigration and Customs Enforcement (ICE) facility was a New York City-based investment group focused on buying Government assets with long term leases in place. The facility, which houses ICE’s Office of Investigations at the U.S.-Mexico border, is under a 10 year lease to the Government. Claiborne Williams, FD Stonewater’s lead development principal, said ...