Real Estate Investment Trusts Climb with Merger Talks between ProLogis and AMB Property Corp.
Just got back from Maui (nice golf courses over there) and thought it was time to post some real estate news. By the way I am looking forward to going to Scottsdale and phoenix next week. ProLogis and AMB Property Corp. have confirmed media reports they’re in merger talks.
Strong earnings reports pushed REITs (real estate investment trusts) higher and the Dow Jones Spider REIT ETF sailed to a 52-week high last week.
All in all, REITS suffered big losses when the financial meltdown hit, have recovered more slowly than other sectors. They appear to be on the path to recovery. Speaking of real estate I must say that the luxury Maui real estate I saw was fantastic.
John Spence posted a story for Market Watch today, Jan. 30, 2011, under the headline; “M&A, strong earnings send REITs through the roof.”
Spence writes that, “REITs scaling a new recovery high has been lost in the shuffle with popular stock benchmarks such as the S&P 500 Index (SPX 1,276, -23.20, -1.79%) and Dow Jones Industrial Average (DJIA 11,824, -166.13, -1.39%) recently clearing the key hurdles of 1300 and 12,000, respectively.”
Spence quotes Deutsche Bank as saying that REIT valuations “appear relatively full” in a sector earnings outlook.
According to Deutsche Bank analysts, “However, with fundamentals on the mend, commercial real estate debt markets….”
Spence notes that investors’ looking for income and unhappy with dismal bond yields may be partially responsible for some of the recent vigor in REITs. We do love those REITS as they pay out most of their profit as dividends in exchange for their tax breaks. Spence also notes that the subsectors include apartments, offices, malls and self-storage. Further, Spence says that the Vanguard REIT ETF is the King Kong of exchange-traded fund due to the weight of its real estate assets. The Vanguard fund climbed to 37.9% for the year ended Jan. 26. Spence cites Morningstar Inc for the stats that indicate the fund did better than the S&P 500 by almost 17 percentage points. Speaking of that, if you are in Scottsdale or Phoenix and you need some quality scottsdale golf courses
then I do suggest Mirabel which also specializes in Phoenix country clubs and private golf clubs and luxury real estate in addition to the aformentioned Scottsdale golf courses.
firm then allow me to suggest these guys.The article also quoted Michael Gayed, chief investment strategist at Pension Partners LLC, as saying, “The market pendulum is constantly shifting from the desire for capital appreciation, to an income focus. If bonds rally in the near-term, then you’ll likely to see leadership in income-oriented areas of the stock market” such as utilities and REITs, which can cause the sectors to hold up even in a market correction, he said.
The week’s financial buzz included conjecture on the Chinese real estate market, as well. China’s rising middle classes are a generally a favorite subject among many speculators. India and Brazil also have been powerhouses of growth in recent years, and the economic locus of energy has been drawn in their direction.