| It's warming up quickly outside, but REITs are even hotter. The NAREIT All REIT Index jumped 6.8% in Q1, outpacing the S&P 500. Where's that equity's headed? We hit up the NYU Schack Institute?s 16th annual REIT symposium last week where Equity Residential CEO David Neithercut (center, with Host Hotels & Resorts CEOEdward Walter and Green Street Advisors chair Mike Kirby), said multifamily fundamentals are great, acquisitions are difficult, there's still a lack of product on the market, and land sales don't havesensible yields. Lodging saw a 45% decline in EBITDA from ?07 to '09, and has only made back 3% to 4%, Edward says. |
| Development, not acquisition, has been a better use of AvalonBay Communities? capital, says chairman Bryce Blair (second from right, with Kimco Realty CEO David Henry, Public Storage CEO Ronald Havner Jr., and Morgan Stanley managing director Seth Weintrob). AvalonBay started building again in '09 and now has $1B under development. ?It's better than acquisition but not for the faint of heart,? he says. (AvalonBay has put two-thirds of its capital into construction and the rest into acquisitions.) For retail, large-scale centers are stillyears away, as retailers have plenty of choices and construction capital is limited, David says. ?The good news is that supply will be constrained for a long time.? |
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