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Stock Picker: REITs Are About to Bottom

Thursday, 28 Jan 2010 | 3:02 PM ET

How will the Federal Reserve’s policy affect real estate investors going forward? Greg Genovese, president of securities at Thompson National Properties, and Jordan Sadler, REIT analyst at KeyBanc Capital Markets, shared their outlooks and stock picks.

Fed's Commercial Real Estate Impact
Greg Genovese, of Thompson National Properties, and Jordan Sadler, of Keybanc Capital Markets, discuss how the Fed's policy will impact commercial real estate players.

Genovese told CNBC that the commercial real estate markets are near a bottom.

“So it’s a good opportunistic time to start investing in real estate,” he said.

“We’re in the land of uncertainty and mixed signals right now.”

However, he warned investors to be careful when investing, saying they should watch where they're investing, what asset type they're investing in and how much leverage they're going to put on those particular properties.

“Overleverage brought us to this situation, but it’s going to be an appropriate amount of leverage in the right target areas that will get us out of it,” he said.

In the meantime, Sadler told investors that there are opportunities to make money in the REITs.

“After three years of being more bearish on the group, we’ve finally become more optimistic,” he said. “There’s a bottoming process about to take place in fundamentals, and valuations are actually fair.”

Sadler Likes:

DuPont Fabros

Camden Property

Entertainment Properties

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Disclosures:

Keybanc Capital Markets has investment banking clients who own shares of DFT and EPR.

Keybanc has managed or co-managed a public offering of equity securities of EPR within the past 12 months. Keybanc expects to receive or intends to seek compensation for investment banking services from CPT within the next three months.

No immediate information was available for Genovese or his firm. ______________________________

Disclaimer

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