REITs Steady, But Execs Remain Wary of Economy

NEW YORK CITY-While real estate trusts continue to navigate the current economic storm without danger of capsizing, REIT executives and investors remain glum as the wait for material signs of economic recovery lengthens, a new Lehman Brothers industry update says.

Lehman says the mood was somber at Tuesday’s 5th Annual Future of REITS conference as fund managers contemplated the probability of lackluster 2002 performance. Yet panel members noted the real estate industry’s strong overall performance compared to previous recessions and participants largely agreed that REITs looked whistle-clean when compared other investment sectors rife with accounting misdeeds.

Sam Zell, chairman of Chicago-based Equities Office Properties Trust, noted that real estate firms’ uncomplicated business models help keep financial shenanigans to a minimum. “While there will always be crooked deals, we do not have channel stuffing or swap issues.” Zell said that he expects economic relief to kick in late this year or in Q1 of 2003, with the recovery driven by a “tsunami of federal stimulation.”