PhillyGator (< 20)

6 Comments – Post Your Own

#1) On January 22, 2008 at 3:30 PM, QualityPicks (46.44) wrote:

The lowering of rates only helps to soften the "fall" so that it doesn't become a disaster. Just like the cuts in 2000-02 didn't make technology "hot" again.

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#2) On January 22, 2008 at 3:56 PM, DemonDoug (99.68) wrote:

REIT's will be on sale in the future, no need to jump the gun, especially in REITs.  Remember, REITs are part of the financial based economy (not the consumer production economy), and will be driven down hard with all the banks in the next year or two or 5.  BTW, if you absolutely need to buy a REIT, buy a healthcare based REIT, and absolutely DO NOT buy a REIT index.  Many malls and commercial spaces are going to be empty and decaying in the next 5 years.

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#3) On January 22, 2008 at 4:33 PM, AnomaLee (29.30) wrote:

You can't seriously tell people this stuff. It's like telling teenagers that it's time to drink & drive.

Ditto to QualityPicks:

"The lowering of rates only helps to soften the "fall" so that it doesn't become a disaster. Just like the cuts in 2000-02 didn't make technology "hot" again. "

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#4) On January 22, 2008 at 5:14 PM, floridabuilder2 (99.60) wrote:

I agree with Demon... don't jump the gun on REITs... cap rates are going up and LTV is going down...  CMBS is fairly liquid with a low default rate, but you have to pick and choose carefully... stay away from apts, shopping centers, warehousing, commercial, and hotels... that leaves... well that leaves nothing

REITs will be huge performers but not this year, we shall see about next... also, there are no buyers for REIT assets except at large discounts

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#5) On January 22, 2008 at 7:30 PM, abitare (99.70) wrote:

DemonDoug is right. My favorite real estate investment is SRS. I hope we get a bigger fools rally and I will buy some more SRS. You cannot print money to create wealth or prosperity. There is so much real estate development going on world wide right now to think REITs are going to hold with the supply flood and recession is crazy. If you want to creat a REIT outperform list, I would like to add you as a favorite to underperform the REITs later.

DC has over 16 high rises going up, there is going to be plenty of vacancies and bankruptcies to follow. 

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#6) On January 23, 2008 at 1:38 PM, PhillyGator (< 20) wrote:

So far, so good. my rating jumped from mid 80's to 99+ with this bet. There are a lot of other reasons to buy REITS now, which I did not identify can not list them all now. But here is the short list: RE is the best hedge against inflation which is here and will spike (especially in light of the rate cut), RE offers real dividends which are mid to long-term by nature of existing leases which gets us through our recession and stock losses in other asset classes. Commercial real estate prices are still too high but economics are generally in check, but the most critical factor is many of these companies market caps are less than their underlying real estate values. There is enough private sector money (i.e. pension funds, private institutional investors, foreign money) who would love to have Cash Flow. So, from my vantage, unless their is a complete financial meltdown, can't see how their prices can get much shorter.

Particularly good looking right now is industrial (Pro Logis, First Industrial, AMB, etc): if the economy continues to slow as expected, it could work to the beenfit of the warehouse market because manufacturers will need store excess inventories. Also, the weak dollar is also propping up demand for exports and thus warehouse space.

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