“The case for true commercial real estate catastrophe, I think, is totally bogus,” Cramer said during Tuesday’s Mad Money. Just look at the relative success of Federal Realty Investment Trust.

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Wall Street pundits and the business press alike have been forecasting commercial real estate’s collapse for some time now. It looms, they say, like an end-of-days event that will erase any hopes we had for a full recovery, both in the markets and the economy. But Cramer’s seen little evidence to prove this. 

If the industry were so near the precipice, then retail should have produced more failures than just Linens & Things and Circuit City, especially given the 10.2% unemployment rate and tight credit markets. There’d be more store-space vacancies, too.

But “money’s plentiful” for most real estate investment trusts, Cramer said, thanks to the market’s hunger for secondary offerings, and occupancy rates seem to remain high. He recommended the iShares Dow Jones US Real Estate Index Fund

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[IYR  Loading...      ()   ] as “the best way to get broad exposure to real estate investment trusts that have retail properties.”

For a more specific play on the business, though, investors should buy Federal Realty

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[FRT  Loading...      ()   ], whose business stands in contrast to the alleged commercial real estate collapse. The company’s occupancy rate dipped just 2.5% from the fourth quarter of 2007 to the end of September, when it was 94.2%. And rental rates were either even or up, with Federal’s average contractual rent on the first year of new leases climbing 25% versus Q3 2007. 

Management has said that its markets have stabilized, and, in fact, the company’s expanding. Again, this isn’t the kind of news that accompanies an expected downturn. Cramer also likes Federal’s diversified portfolio, as no client makes up more than 2.6% of the business. Plus, the stock is up 9% since the Aug. 11 secondary offering, which priced at $57.50. Investors who bought the deal are up even more: 14%. And there’s a healthy 3.9% dividend yield.

No doubt a big part of Federal Realty’s success is attributable to great leadership, namely CEO Donald Wood. He’s “a man this show has come to bank on,” Cramer said. Wood returned to Mad Money to make his case for commercial real estate. Watch the full interview here.

Call Cramer: 1-800-743-CNBC

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