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Stock Screens April 25, 2008, 12:01AM EST

REITs Show Strength

Standard & Poor's has buy or strong buy recommendations on 17 names in the industry

by Beth Piskora From Standard & Poor's Equity Research

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Did someone say something about the deflating of a real estate bubble? Sure, home prices may be falling, but real estate investment trusts (REITs) outperformed broad market averages in the first quarter of this year. Standard & Poor's REIT equity analysts believe this outperformance can continue.

The REITs' performance in the first quarter is particularly impressive, considering their returns this decade. In the past 10 years (ended March), the S&P REIT composite index posted a total return of 4%, vs. the S&P 500's 3.5%. Then, in 2007, as news about a real estate bubble and subprime mortgage problems filled the headlines, REITs fell about 16%.

But in the first quarter of 2008, the group posted a 0.8% total return, at a time when the S&P 500 index fell 9.4%.

We screened our database for REITs with 4- (buy) or 5-STARS (strong buy) rankings from S&P Equity Research. Seventeen REITs made the cut:

  REITs Favored by S&P

Company Symbol
Alexandria ARE
AMB Property AMB
Annaly Capital Management NLY
Developers Diversified Realty DDR
Essex Property ESS
Federal Realty FRT
First Industrial Realty FR
General Growth Properties GGP
Macerich MAC
Mack-Cali CLI
National Retail Properties NNN
ProLogis PLD
PS Business Parks PSB
Regency Centers REG
Simon Property Group SPG
Taubman Centers TCO
Weingarten Realty WRI

Piskora is managing editor of U.S. Editorial Operations for Standard & Poor's .

All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure

Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.

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