REITWeek® 2008 Advance Report

A Look at the retail sector

Retail REITs are among the best-performing segments of the equity market this year. They're currently outperforming the S&P 500 by approximately 10 percentage points on a year-to-date basis. The media coverage attached to this special issue of Real Estate Investment SmartBrief tells the story.

What are the dynamics driving this impressive performance -- which is taking place not just in the U.S., but in markets around the world? And how can investors best take advantage of these opportunities?

Leading real estate executives, investors and financial professionals will provide their answers to these questions at REITWeek® 2008, NAREIT's Investor Forum, which will be held June 4 through 6 at New York City's Waldorf=Astoria Hotel. It's not too late to register to attend REITWeek, the year's most important conference for REIT and publicly traded real estate investment. To learn more about the event, view this video from NAREIT CEO Steve Wechsler.

Also, if you don't receive our regular daily edition of Real Estate Investment SmartBrief, we urge you to subscribe to this daily digest of the most important news affecting the real estate investment industry. This executive news summary is delivered to your e-mail inbox every morning -- for FREE.

Capital Markets

White House economist doesn't see recession in U.S.
The U.S. economy is not in a recession, according to Council of Economic Advisers Chairman Edward Lazear. "The data are pretty clear that we are not in a recession," he said. Lazear also expects stimulus checks to fuel growth in the current quarter. The Wall Street Journal (5/8)

Report: REITs may face trouble accessing capital
Ahead of the industry's two biggest events, including NAREIT's REITWeek Investor Forum, REIT executives say they see mixed signals in the CMBS marketplace. The sector has enjoyed a solid start to the year, but a recent Fitch report suggests access to capital is a concern. "Not a lot's trading on the CMBS side; it's very interesting," said Simon Property Group CEO David Simon. "At this point, it's just very hard to find the paper. We do expect that logjam to loosen up." CoStar Group (5/7)

Investment News

Big mall operators' earnings will be closely watched
Simon Property Group and General Growth Properties, the two largest U.S. shopping mall operators, are scheduled to report earnings this week. Analysts are looking at the reports as a potential bellwether for the overall U.S. retail sector. "Because they're so broad nationally, people are going to be listening about prospective store closings throughout 2008," said Robert Gadsden, portfolio manager with Alpine Realty Income Growth Fund. Reuters (4/29)

Dutch firms form partnership to focus on U.S. retail
United Investment Co. and SNS Property Finance International formed a joint venture to establish a $1 billion real estate investment and development fund. The Dutch companies said the new fund would be dedicated to the U.S. retail real estate market. "We meet retailers every day who can't get financing to build deals for them, so we see this as a great opportunity," said Biff McGuire, CEO of UDC Global in America. Commercial Property Executive (4/17)

Texas pension fund to invest $262.5 million with Parkway
The Teacher Retirement System of Texas plans to invest $262.5 million in a fund managed by Parkway Properties, a Mississippi-based REIT. The investment is earmarked for Parkway Properties Office Fund II LP. American City Business Journals (5/5)

AmREIT emboldened by strong first-quarter numbers
AmREIT executives expect to record at least $2 billion in acquisitions and development within three years. The expectations are based on strong first-quarter numbers, which bucked the trend for most other retail owners. H. Kerr Taylor, AmREIT's chairman, CEO and president, told shareholders and analysts that 2008 would be "a launching pad" for AmREIT. GlobeSt.com (5/8)

British mall operator warns of more write-downs
Liberty International announced a $675.8 million write-down to the value of its $16.3 billion retail holdings during the first quarter. Liberty warned that write-downs are likely to continue across Britain's shopping mall owners. The Times (London) (subscription required) (5/8)

Real Estate Marketplace

Kimco shifts focus to Mexico as U.S. demand slows
Kimco Realty Corp. is tapping into middle-class growth in Mexico, which has fueled demand for suburban-style retail property. The company entered the Mexican market six years ago and now has 34 properties there. "Development in the U.S. is rather limited today," said David Henry, Kimco's chief investment officer. The Wall Street Journal (4/30)

Report: Malls remain resilient, continue to evolve
Most industry executives say the traditional shopping mall is resilient and evolving, according to a report by CoStar Group. Malls are not the retail powerhouses that they once were and face short-term pressure in the current economic downturn, but executives and analysts are not discounting their potential rebound. "All indications are for a stronger second half in 2008," said Greg Maloney, president and CEO of Retail - Americas for Jones Lang LaSalle. CoStar Group (3/26)

Unibail benefits from limited risk one year after merger
Unibail Holding's acquisition of Dutch retail giant Rodamco Europe for $14.39 billion a year ago has helped the company by cutting office exposure and limiting risk. Investors like the merger because they see the office market taking a harder hit than retail in an economic downturn. The Wall Street Journal (4/30)

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