REIT Index Drops First Time in Seven Years
SOURCE: Wall Street Journal
According to a series of recent article by Kemba Dunham in a recent WSJ edition, "Judging by the sharp selloff of real-estate investment trusts in recent weeks, it is clear that some investors feel the good times have come to an end for these stocks."
After a seven year climb, real estate investors hit the brakes with end of second quarter 2007 reports showing a 9% drop in returns for equity REIT's, a stark reversal from the trend over the past few years when annual returns averaged a hefty 20%.
"Yet," as the article surmises, "some analysts and investors believe that the heavy selling was too extreme and that some REITs -- particularly those in the office and retail sectors -- could stage a comeback. Indeed, just as the residential housing slump has produced some steals for home buyers, the REIT sell off may similarly yield some good deals for stock-market investors."
But the article itself goes on to note many potentially positive spins on this news, as well as offering a few speculations as to the reasons behind the recent drop in the REIT index.
Dunham offers, "There are many reasons why investors have seemingly turned their backs on REITs, which are publicly traded real-estate companies that distribute at least 90% of their taxable earnings in dividends. Many worry that rising borrowing costs could slow the pace of REIT property acquisitions. Others simply think the trend of the past few years, when annual returns for REITs averaged 20%, is unsustainable."
Here at Steelhead Capital, our new Investment Advisory Services are designed to help you make sense of the market changes and plan for your very best long term strategy in the commercial real estate market.
According to a series of recent article by Kemba Dunham in a recent WSJ edition, "Judging by the sharp selloff of real-estate investment trusts in recent weeks, it is clear that some investors feel the good times have come to an end for these stocks."After a seven year climb, real estate investors hit the brakes with end of second quarter 2007 reports showing a 9% drop in returns for equity REIT's, a stark reversal from the trend over the past few years when annual returns averaged a hefty 20%.
"Yet," as the article surmises, "some analysts and investors believe that the heavy selling was too extreme and that some REITs -- particularly those in the office and retail sectors -- could stage a comeback. Indeed, just as the residential housing slump has produced some steals for home buyers, the REIT sell off may similarly yield some good deals for stock-market investors."
But the article itself goes on to note many potentially positive spins on this news, as well as offering a few speculations as to the reasons behind the recent drop in the REIT index.
Dunham offers, "There are many reasons why investors have seemingly turned their backs on REITs, which are publicly traded real-estate companies that distribute at least 90% of their taxable earnings in dividends. Many worry that rising borrowing costs could slow the pace of REIT property acquisitions. Others simply think the trend of the past few years, when annual returns for REITs averaged 20%, is unsustainable."
Here at Steelhead Capital, our new Investment Advisory Services are designed to help you make sense of the market changes and plan for your very best long term strategy in the commercial real estate market.
