After a year of roller-coaster performance, the real estate investment trusts are ending the year on a high note; but investors shouldn’t expect as much excitement in 2010, according to The Wall Street Journal. One of the few REITs that may perform well next year is self-storage, as it isn’t dependent on job creation.
Early in 2009, REIT investors were discouraged by tight credit and overall stock volatility. But many REITs survived the year by selling stocks to pay down debt, cutting dividends, and paying dividends with stock instead of cash. The hotel REITs were the most successful this year, with the sector jumping 69 percent.
The outlook for 2010 is still pretty grim, as REITs carry too much debt and are expensive relative to other stocks and bonds, according to Mike Kirby, chief analyst for real-estate research firm Green Street Advisors. Other analysts say not many REIT sectors have much upside left.
Chris Lucas, a senior analyst at Robert W. Baird & Co., expects the self-storage, industrial and student-housing REITs to outperform.
Source: The Wall Street Journal, REITs End Roller-Coaster Year on a High
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