Lehman Bros. Raises Price Target for REIT Index

NEW YORK CITY-With the Dow Jones Industrial Average up only a couple of hundred points for the year, the S&P 500 down more than 4%, the Nasdaq down over 10%, and the Morgan Stanley Real Estate Index (RMS) at or near its all-time high of 387, many investors continue their to put their money into REITs. With 8% growth projected for REITS this year and next, the equity research analysts at Lehman Brothers are raising their projected end-of-year price target for the RMS.

They are now projecting a 2001 close for the Index at between 410-430, up from 400-420, which translates into a 17% annual return. Analysts David Shulman and Stuart Axelrod have raised their price targets for many high-yielding, small-cap REITs while reducing them a bit for trusts will large development programs. High-quality, lower-yield REITs still get their recommendation. No changes have been made to company ratings.