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REITs Attract Yield-Hungry Investors

David Bogoslaw Business Week
REITs Attract Yield-Hungry Investors - REITs - United States - property investment - property market


The U.S. commercial real estate market has so far averted the catastrophe that many strategists were predicting last year.



Even after sales of existing homes plummeted 27 percent to record lows in July, threatening further home-price declines, analysts see commercial real estate values stabilizing. Vacancies for apartment buildings, office complexes, retail mall, and self-storage facilities are no longer rising meaningfully, rents are no longer falling, and many Real Estate Investment Trusts, the main vehicle for individual investors to participate in the sector, continue to reduce their debt loads.

Equity investors are taking notice: FTSE NAREIT's All-REIT index, comprised of 148 publicly traded REITs, was up 11.7 percent year-to-date as of Aug. 26 while the Standard & Poor's 500-stock index was down 4.9 percent. Publicly traded REITs represent 15 percent of the total U.S. commercial real estate market.


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