Commercial Real Estate Shaping Up To Be A Hot Investment In 2011
Real estate investment trusts are back – and back big time.
While solo developers are for the most part scrounging for cash, REITs are emerging from one of the most brutal downturns in decades poised to capitalize on the coming upsurge.
Boston Properties is leading the way, with its share price having risen through 2010, even as the office market hit bottom.
Now with commercial real estate ready to roll again in 2012, real estate investment trusts like BXP are poised to clean up.
Standard and Poor’s recently boosted its outlook on Boston Properties, arguing the REIT will soon be cashing in on improving rents and declining office vacancies.
The hometown real estate giant also has another big advantage – lots of money to draw upon to scoop up office towers now selling for well below their peak values. (Speak of the devil, Boston Properties just closed on its $930 million deal for the Hancock Tower.)
And they see no letup in 2011, with a lot of upside ahead as the recovery in commercial real estate begins to pick up steam.
Other Neuberger favorites:
· Equity Residential, which owns a nationwide apartment empire and whose stock price soared 50 percent in 2010, to $52 a share. Equity has a big chunk of its portfolio on the coasts in cities like Boston, meaning higher rents ahead as the economy rebounds.
· Public Storage is another favorite, with the storage industry starting to raise rents on both new and old customer as the number of empty storage units falls.
· And Neuberger has also made a big bet on the hotel sector, buying up shares of Hosts Hotels & Resorts. Business travelers are back – and they pay full freight, the young stock pickers contend.