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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend -- Ignore unavailable to you. Want to Upgrade?

To: shoe who wrote (2153)	8/16/2001 6:36:34 AM
From: Richard Barron	Read Replies (2) \| Respond to of 2561

Paula, I would sleep better owning KIM for the long term, but REIT prices are starting to get expensive short term whenever they trade much more than 5% above NAV. KIM at 50 is getting mildly expensive. If FFO continues to grow in excess of 7% long term, then KIM is cheap long term. KIM has been growing FFO more than 10% for many years, so 7% may be very do-able. NXL is fairly priced here if one assumes that FFO will be 2.00 or more in 2002 or 2003 and can grow 3%+ a year from there. Based on the last 3 years, this is not an assumption that most conservative institutions will be making, so only retail investors are likely to push this up until the growth is a fact. Retail investors can be fickle. I personally think REITs should trade 5-10% above NAV for the highest quality management teams, until the S&P 500 trades around a 14-16 multiple in order to get similar value, but I am biased towards real estate steady returns compared to the sort of swings where a leader like INTC drops 70-80% of the previous years profit levels. Richard