REITs - Real Estate Investment Trusts - Info & Discussion: Re: Re: Re: For Experienced Investors Only!

» Happy_2 - Re: Re: Re: For Experienced Investors Only!

In response to Re: Re: For Experienced Investors Only! posted by Normxxx:
I found your post interesting. But, one cross-current to your idea Norm is that if interest rates are rising it can only be because inflation is increasing. And, if inflation is increasing rents of all kinds, offices, apartments, hotels etc, will also go up. For REIT's that are not too highly leveraged, higher rents spell higher earnings.

There are so many other things going on. For example in many areas, up-scale apartments are being converted to condos. These condos can be sold profitably, over their equivalent value as apartments, even at higher interest rates.
This trend is leading to increases in demand for the remaining apartments.

Rents in San Francisco, which have been down 40% in the past 5 years, have no where to go but up.
Prices in NY for hotels and apartments are starting to sky rocket after years of stagnation.

In regards to office REIT's, I would say you may be right. With energy prices where they are more and more people are going to tele-commute. Even a 10% reduction in commuters, would have a huge effect on metro rents.

I have many friends in the Federal government who not only don't do anything at work, hell they don't even have to go to work anymore. But, that is another story.

-- posted by Happy_2