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REIT Performance in 2002 'Boring': Lehman Brothers

NEW YORK CITY-Lehman Brothers latest predictions on REIT performance see an across-the-board return of 7%--a giant step back from the heady, double-digit profits investors enjoyed over the last two years.

By Glen Thompson | Updated on January 10, 2002

NEW YORK CITY-REIT investors across the board can look for modest returns of around 7% this year, far below the double-digit profits enjoyed during 2000 and 2001, a new report says.

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.

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