Wednesday, September 19, 2007

Are REITs undervalued?

REITs have taken some big hits during the credit crunch, and now some analysts are wondering if there should be an upward correction.

Does this create an investment opportunity for entrepreneurs? Maybe, maybe not. I'm a firm believer in only investing in things I understand completely, (which rules me out from most investing.)

What does seem to be the case is that the underlying fundamentals for commercial loans and commercial real estate are still sound. If anything, the credit crunch has made made lenders become more prudent:

However, because lenders are more cautious, some deals may get postponed or be slower to complete than in the past few years, she said. “We’re seeing a return to the fundamentals and deal structuring of the mid-(19)90’s and may see some dampening in investment activity, but there is a lot of momentum in commercial real estate.”

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