Commercial Real Estate May Slow Down The Rebound In REIT ETFs
J.P. Morgan analysts said Tuesday they enter 2010 with a “more constructive outlook” for real estate investment trust stocks as they climb a wall of worry, and think the sector could post a 5% to 10% total return for the year. “We called for negative returns in 2008 and 2009, but our negative stance eased throughout 2009 as the re-opening of the capital markets took liquidity risk off the table, and Street estimates came down to reflect the impact of the downturn,” J.P. Morgan said in a research note. “Looking out to this year, job creation should improve fundamental visibility, acquisitions should become prevalent, and traditional REIT investors (such as income buyers) should re-engage the group.”
“The analysts’ biggest concerns are a lack of earnings growth that could prompt investors to seek out more cyclical stocks leveraged to an economic rebound, and valuation levels that are above long-term averages and will be faced with new issuance activity,” John Spence Reports From MarketWatch.
“Commercial real estate has been socked along with the residential market during the global financial crisis. Although some think the housing market could be close to rounding the corner, the outlook for commercial real estate is even cloudier. REITs, which own and operate commercial portfolios, have been hit by financing problems as well as lower rents and occupancies during the recession,” Spence Reports.
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“The SPDR Dow Jones REIT ETF (RWR) lost about 39% in 2008 and fell harder than the broader stock market as measured by the S&P 500 Index (SPX) . Yet the exchange-traded fund bounced back somewhat last year and racked up a 28% gain, according to Morningstar. It has a dividend yield of 4%, according to sponsor State Street Global Advisors,” Spence Reports.
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The investment (RWR) seeks to provide investment results that, before expenses, correspond generally to the total return of the Dow Jones U.S. Select REIT index. The fund uses a passive management strategy designed to track the total return performance of the Wilshire REIT index. The subadviser seeks a correlation of 0.95 or better between the fundâs performance and the performance of the index. It is nondiversified.
| Fund Name: | SPDR Dow Jones REIT ETF | ||
| Ticker Symbol: | RWR | ||
| Holdings: | As Of 01/11/2010 | ||
| Name | Weight | Ticker | Sector |
| Simon Ppty Group Inc New | 10.15 | (SPG) | Regional Malls |
| Vornado Rlty Tr | 5.83 | (VNO) | Diversified |
| Public Storage | 4.73 | (PSA) | Self-Storage |
| Boston Properties Inc | 4.39 | (BXP) | Office |
| Equity Residential | 4.23 | (EQR) | Apartments |
| Hcp Inc | 4.15 | (HCP) | Healthcare |
| Host Hotels & Resorts Inc | 3.63 | (HST) | Hotels |
| Ventas Inc | 3.19 | (VTR) | Healthcare |
| Prologis | 3.1 | (PLD) | Industrial |
| Avalonbay Cmntys Inc | 3.04 | (AVB) | Apartments |
| Kimco Realty Corp | 2.64 | (KIM) | Strip Centers |
| Health Care Reit Inc | 2.52 | (HCN) | Healthcare |
| Federal Realty Invt Tr | 1.9 | (FRT) | Strip Centers |
| Nationwide Health Pptys Inc | 1.82 | (NHP) | Healthcare |
| Sl Green Rlty Corp | 1.76 | (SLG) | Office |
| Amb Property Corp | 1.74 | (AMB) | Industrial |
| Liberty Ppty Tr | 1.68 | (LRY) | Mixed Industrial/Office |
| Digital Rlty Tr Inc | 1.64 | (DLR) | Industrial |
| Regency Ctrs Corp | 1.47 | (REG) | Strip Centers |
| Macerich Co | 1.45 | (MAC) | Regional Malls |
| Hospitality Pptys Tr | 1.42 | (HPT) | Hotels |
| Duke Realty Corp | 1.37 | (DRE) | Mixed Industrial/Office |
| Mack Cali Rlty Corp | 1.31 | (CLI) | Office |
| Senior Hsg Pptys Tr | 1.29 | (SNH) | Healthcare |
| Alexandria Real Estate Eq I | 1.27 | (ARE) | Office |
| Camden Ppty Tr | 1.2 | (CPT) | Apartments |
| Weingarten Rlty Invs | 1.18 | (WRI) | Strip Centers |
| Udr Inc | 1.13 | (UDR) | Apartments |
| Essex Ppty Tr Inc | 1.13 | (ESS) | Apartments |
| Highwoods Pptys Inc | 1.05 | (HIW) | Office |
| Corporate Office Pptys Tr | 0.99 | (OFC) | Office |
| Apartment Invt & Mgmt Co | 0.92 | (AIV) | Apartments |
| Bre Properties Inc | 0.85 | (BRE) | Apartments |
| Taubman Ctrs Inc | 0.84 | (TCO) | Regional Malls |
| Douglas Emmett Inc | 0.82 | (DEI) | Office |
| Washington Real Estate Invt | 0.76 | (WRE) | Diversified |
| Tanger Factory Outlet Ctrs | 0.73 | (SKT) | Factory Outlets |
| Home Properties Inc | 0.71 | (HME) | Apartments |
| Equity Lifestyle Pptys Inc | 0.7 | (ELS) | Manufactured Homes |
| Biomed Realty Trust Inc | 0.69 | (BMR) | Office |
| Brandywine Rlty Tr | 0.69 | (BDN) | Mixed Industrial/Office |
| Hrpt Pptys Tr | 0.68 | (HRP) | Office |
| Cbl & Assoc Pptys Inc | 0.67 | (CBL) | Regional Malls |
| American Campus Cmntys Inc | 0.66 | (ACC) | Apartments |
| Mid-Amer Apt Cmntys Inc | 0.65 | (MAA) | Apartments |
| Lasalle Hotel Pptys | 0.65 | (LHO) | Hotels |
| Kilroy Rlty Corp | 0.64 | (KRC) | Mixed Industrial/Office |
| Healthcare Rlty Tr | 0.58 | (HR) | Healthcare |
| Developers Diversified Rlty | 0.55 | (DDR) | Strip Centers |
| Diamondrock Hospitality Co | 0.51 | (DRH) | Hotels |
| Dct Industrial Trust Inc | 0.49 | (DCT) | Industrial |
| Extra Space Storage Inc | 0.46 | (EXR) | Self-Storage |
| Franklin Street Pptys Corp | 0.46 | (FSP) | Office |
| Sovran Self Storage Inc | 0.45 | (SSS) | Self-Storage |
| Eastgroup Ppty Inc | 0.45 | (EGP) | Industrial |
| Ps Business Pks Inc Calif | 0.44 | (PSB) | Mixed Industrial/Office |
| Sunstone Hotel Invs Inc New | 0.43 | (SHO) | Hotels |
| Post Pptys Inc | 0.43 | (PPS) | Apartments |
| Colonial Pptys Tr | 0.37 | (CLP) | Diversified |
| Alexanders Inc | 0.36 | (ALX) | Regional Malls |
| Cousins Pptys Inc | 0.32 | (CUZ) | Diversified |
| Dupont Fabros Technology In | 0.32 | (DFT) | Industrial |
| Acadia Rlty Tr | 0.31 | (AKR) | Strip Centers |
| Equity One | 0.3 | (EQY) | Strip Centers |
| Inland Real Estate Corp | 0.29 | (IRC) | Strip Centers |
| U Store It Tr | 0.26 | (YSI) | Self-Storage |
| Parkway Pptys Inc | 0.22 | (PKY) | Office |
| First Potomac Rlty Tr | 0.19 | (FPO) | Mixed Industrial/Office |
| Pennsylvania Rl Estate Invt | 0.19 | (PEI) | Regional Malls |
| Cedar Shopping Ctrs Inc | 0.18 | (CDR) | Strip Centers |
| Ashford Hospitality Tr Inc | 0.17 | (AHT) | Hotels |
| Universal Health Rlty Incm | 0.16 | (UHT) | Healthcare |
| Sun Communities Inc | 0.16 | (SUI) | Manufactured Homes |
| First Industrial Realty Tru | 0.14 | (FR) | Industrial |
| Ramco-Gershenson Pptys Tr | 0.13 | (RPT) | Strip Centers |
| Education Rlty Tr Inc | 0.13 | (EDR) | Apartments |
| Kite Rlty Group Tr | 0.13 | (KRG) | Strip Centers |
| Felcor Lodging Tr Inc | 0.12 | (FCH) | Hotels |
| Saul Ctrs Inc | 0.12 | (BFS) | Strip Centers |
| Hersha Hospitality Tr | 0.1 | (HT) | Hotels |
| State Str Instl Liquid Resvs | 0.07 | 85749P9A | Unassigned |
| U.S. Dollar | -0.07 | CASH | Unassigned |
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