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

To: Skeeter Bug who wrote (249387)	5/23/2010 11:16:42 AM
From: Perspective	Read Replies (1) \| Respond to of 306849

I know you wanted me to share any CRE thoughts I had. I am over halfway through my homework for this weekend - first time in several months. I'm not prepared to share everything I've come up with, but I will tell you this: I am absolutely stunned by the pricing being reflected in many of the REITs. At the recent peak, many, many, MANY of them were trading for HIGHER capitalizations than at the 2007 peaks. Their stock prices aren't as high, but that doesn't reflect the massive dilutions in most of them. Take MAC for instance. In 2007, they traded around $70 for a short time. Just recently, they ticked up to $45. Not nearly as high as 2007, right? Wrong. Shares outstanding 2007 were 71.6M; now there are 130M. Market cap then: 5.0B. Now 5.8B. Many, many, many names are in similar position. Sure, they got something for the shares issued, but at heavy price to outstanding shareholders. I doubt it was worth nearly a billion in market cap. Perhaps they are trading on the belief that they will be able to issue financing when others can't, and snap up distressed assets. That's something I can't figure out how to value. But I think it's more likely that they get their snouts smacked away from the liquidity trough again, and soon. I have small positions against several of the names already, but I do expect to rebuild them. `BC