Struggling REITs ripe for the picking

“This is probably one of the most exciting times [for REITs],” said Marty Cohen, co-chairman and co-CEO of Cohen & Steers.
APR 03, 2008
One of real estate’s most highly regarded portfolio managers, Marty Cohen, sees growth potential and opportunity in the commercial real estate market. “This is probably one of the most exciting times,” Mr. Cohen, co-chairman and co-chief executive of New York’s Cohen & Steers Inc., said today while speaking to the annual New York University REIT Symposium in New York. “I think the housing crisis and subprime catastrophe is the best thing that ever could have happened to commercial real estate.” A year ago, he said, there was a glut of cheap money chasing after real estate, and if that had continued it would have driven real estate prices off a cliff. “We were about to do that a year ago, but fortunately, the capital markets seized up, and commercial real estate owners, developers, buyers and sellers were brought to a halt,” he said. Financing dried up, he said, and valuations came down from their frothy levels. Since then, real estate investment trusts have been through the “worst bear market” in REIT history, with a 35% decline between a peak in February 2007 and a nadir in January 2008, he said. Many are trading at the biggest discount ever to the value of their underlying assets, or net asset value. A proliferation of investors shorting REITs exacerbated the stocks’ problems further. “If I’m right, I think a lot of the distress and depression will turn into opportunity for our industry,” said Mr. Cohen, noting that this is just the first year of an expected eight-year cycle. He emphasized that it’s perception — not fundamentals — that are keeping REITs and the commercial mortgage-backed securities market down.

Latest News

Federal judge dismisses Eltek manipulation lawsuit against Morgan Stanley Smith Barney
Federal judge dismisses Eltek manipulation lawsuit against Morgan Stanley Smith Barney

Nine-month electronic trading freeze and share lending program at the center of dismissed claim.

RIA wrap: Dynamic strikes South Carolina deal to reach $7B AUM milestone
RIA wrap: Dynamic strikes South Carolina deal to reach $7B AUM milestone

Meanwhile, Rossby Financial's leadership buildout rolls on with a new COO appointment as Balefire Wealth welcomes a distinguished retirement specialist to its national network.

Rethinking diversification amid a concentrated S&P 500
Rethinking diversification amid a concentrated S&P 500

With a smaller group of companies driving stock market performance, advisors must work more intentionally to manage concentration risks within client portfolios.

Merrill pays second settlement to former Miami Dolphins player, client of ex-broker
Merrill pays second settlement to former Miami Dolphins player, client of ex-broker

Professional athletes are often targets of scam artists and are particularly vulnerable to fraud.

Schwab touts AI as its biggest growth lever at investor day
Schwab touts AI as its biggest growth lever at investor day

The brokerage giant tells Wall Street it will use artificial intelligence to reach clients it has never been able to serve — and turn the technology's perceived threat into a competitive edge.

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

SPONSORED Durability over scale: What actually defines a great advisory firm

Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline