PUBLIC REAL ESTATE EQUITY
INVESTMENT
ANTHONY B. SANDERS
PROFESSOR OF FINANCE
DIRECTOR, CENTER FOR REAL ESTATE ENTREPRENEURSHIP
GEORGE MASON UNIVERSITY
FAIRFAX, VIRGINIA
HTTP://MASON.GMU.EDU/~ASANDER7/
State of the Market – ULI – August 25, 2009
The Rise and Fall of the REIT Market
Enormous run-up in REIT shares prices which peaked at
January 2007.
The housing bubble peaked 6 months before the REIT
bubble peak.
The major declines in both markets occurred in 2008.
A similar pattern developed in the NCREIF market as well.
The result is that REITs, like housing, have experienced
serious declines in underlying asset values resulting in loan
balances exceeding property values in many cases.
But, USA TODAY reports (Sunday, August 23, 2009)
Investing: Real estate funds soaring from clobbering
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NAREIT Index Since 2000
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NAREIT and Case-Shiller 20 Indices Since 2000
NAREIT
Case-Shiller 20
Peak: July 2006
Peak: January 2007
Fitch REIT Midyear Outlook
Fitch released its 2009 REIT Midyear Outlook and continues to
maintain a negative outlook on ratings of U.S. REITs.
The negative outlook is a result of ongoing liquidity concerns, a
challenging U.S. economy, constrained real estate debt
capital markets, deteriorating property fundamentals and
uncertainty surrounding commercial real estate property
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