Lehman Brothers latest industry update nutshells its expectations for the year right from the start of its 2002 Outlook: Watching the Paint Dry. "The outlook for REIT shares in 2002 is, to be frank, quite boring," the study reads. Of course, REIT performance over the last couple of years--total returns of 27% in 2000 and 13% last year--is a hard act to follow.

Still, as a result of its findings, the financial services giant downgraded the shares of 13 REITS: Moving from Strong Buy to Buy are Avalon Bay Communities, Equity Office Properties and Kimco Realty; AMB Property Corp., CarrAmerica Realty, Cousins Properties, Equity Residential Properties Trust, Prentiss Properties Trust and TrizecHahn Corp. from Buy to Market Perform; and AML Residential Properties, Great Lakes REIT, Pennsylvania REIT and Post Properties from Market Perform to Market Under Perform. Vornado Realty Trust remains Lehman's only Strong Buy rated stock.

Among Buy rated stocks, favorites are Archstone-Smith Trust, Avalon Bay Communities, Arden Realty, Boston Properties, Equity Office Properties, General Growth Properties, Kimco Realty, Manufactured Home Communities and Sun Communities.