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#1
06-03-2005, 03:15 PM
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Thoughts on private REITs
anyone have any thoughts on the future of private reits? It could be argued that reits are responsible for driving up commercial prices over the last several years. Would you consider this to be a bubble of sorts?
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#2
06-03-2005, 04:13 PM
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Re: Thoughts on private REITs
The future of private and public REITS is determined by the competence of the management. Most public REITs are lightly leveraged - 50% LTV so the tenant market will drive dividend yield thus stock price. REITs have been largely successful recently due to low interest rates on other alternative investment classes causing people to chase riskier investments such as REITs or limited partnerships.
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#3
06-04-2005, 01:08 PM
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Re: Thoughts on private REITs
No, if REITs are a superior form of organization they can pay more for a property and still make money.
A bubble is when past price increases lead to future price increases either due to credit being too easy to get or some sort of mimicking behavoir by investors. The situation where anyone with any kind of income can get a mortgage is not the same in the commercial market. I wonder if REITs will do to small property owners what big box retailers did to small discounters.
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