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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (187300)	3/1/2009 8:02:00 PM
From: ChanceIs	Read Replies (3) \| Respond to of 306849

With Little Choice, REITs Raise Capital MARCH 1, 2009, 7:52 P.M. ET By ANTON TROIANOVSKI U.S. REITs are preparing to grit their teeth and issue stock. It'll be a rough ride. Investors are already shell-shocked from the 60% swoon suffered by many real-estate investment trust shares since September. Moves that could dilute their ownership might rattle them further. But REITs need more equity: to replace debt coming due, and, for the lucky ones, to buy distressed commercial property. Healthier REITs, at least in relative terms, such as office REIT Vornado Realty Trust and mall giant Simon Property Group Inc., have already decided to pay chunks of their dividend in stock to conserve cash. But if they can raise more capital to get through the worsening slump, there should be cheap commercial property deals, with unusually high yields, to take advantage of. Others, like shopping center owner Macerich and warehouse developer Prologis, need to pay down debt that's coming due. Facing declining demand for space and a frozen debt market, REITs are scrambling to avoid the fate of mall owner General Growth Properties Inc., which has been teetering on the brink bankruptcy. Overseas, where real-estate stock prices have sometimes fallen even further than in the U.S., leading REITs are raising new equity. Three U.K. giants hope to raise more than $2.9 billion through rights issues. Westfield Group, the Australian mall owner, launched a $1.9 billion capital raise last month. While Health Care REIT raised about $200 million in the U.S. in January, the chances are that equity sales wouldn't go as smoothly for companies more desperate for cash. After all, pension funds and college endowments, among the biggest investors in REITs, don't have money to throw around right now. But for less leveraged REITs there could be an opportunity. With many private-equity property investors paralyzed by losses on debt-heavy, top-of-the-market buys, REITs that can round up enough equity to play another day could yet emerge as winners.