“REITS ARE THE RIGHT WAY”
We're glancing toward New York City this week because top-level REIT execs are making presentations to investors at NAREIT's annual REITWorld conference. Even if you're not involved in high finance, you should pay attention to REITs—they're a leading indicator of the health of the industry. We tracked down plenty of muckety-mucks who actually know what REIT stands for. (We believe it's "Recession Ending Investment Thingies.") In 2011, non-profit NAREIT (the national association, whose members own CRE assets totaling about $500B) will work to support new legislation that will help REITs achieve greater operating efficiencies across a broad range of business areas. That was announced yesterday by incoming NAREIT chair (and Avalon Bay CEO) Bryce Blair.
|Literally a talking head, outgoing NAREIT chair (and Ventas CEO)Debra Cafaro says REITs invested more money in 2010 than private equity, institutions, and foreign investors. 2010 returns (25%) are 3x the S&P 500, and 4% dividend yields are twice the S&P. All proving that liquidity does indeed equal value, Bryce says. Recent NAREIT analysis shows that a 33% REIT allocation boosts returns and reduces volatility. Just imagine if pension funds and institutions boosted their typical 5% REIT allotments to one-third.|
|Here's Bryce with REIT bigwigs Marty Cohen of Cohen & Steers, Unibail-Rodamco CEO Guillame Poitrinal, Vornado CEO Mike Fascitelli, and Archstone's Scot Sellers. (Archstone is private—for now; Mike called this appearance Scot's pre-roadshow.) Guillame wants to communicate REIT benefits to Europe, where the UK, France, Belgium, and the Netherlands use the structure. With Italy and Spain on board, Sweden and Central Europe would follow, he says. In the US, prices and rates fell quickly, Mike says, and the recovery will be quicker than in the '90s. Office is still lagging hotels and apartments. NY retail is back with a vengeance, from $800/SF at the peak, down to $500, and now back to $750.|