February 22, 2010

Investors' Investment in CRE - REITs?

In two different articles on Friday from non-real estate publications, this one from the New York Times' Your Money section, and this one from Investors Business Daily, REITs took center stage. Both articles focus on investing in REITs, though the NYT article is broader, discussing the overall investment climate for commercial real estate.

Why have REITs done so well? We think because people ultimately find real estate intriguing and can't justify (or afford) buying some building directly. A good investment that provides investor liquidity and cash flow? Sure. But CRE is more intriguing than "safe," as we've all experienced over the last two years. Beyond the epic destruction of value since mid-to-late 2008 lies a pool of investors, itching and waiting for the proverbial shoe to drop. These articles simply highlight the continuing momentum we're seeing; the tidal wave of capital that we're expecting. Maybe not directly, but to be sure, they were written because people want to discuss commercial real estate.


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