WHAT'S YOUR 2008 INVESTMENT WORD?

If numbers can be believed, this industry isn't flinching. We asked our readers a year ago to characterize their investment strategies for the coming year. And we asked them again last week. A year ago, 51% said Buy, and 27% said Hold. Some 22% were planning to Sell. Today, the numbers have shifted little, and the percents come in at 54, 34 and 12, respectively, with Sell taking the biggest hit and more respondents shifting to a Hold position. We talked with Commentator Earl E. Webb, CEO of capital markets at Jones Lang LaSalle, before the survey launched, but he predicted the directions with a good degree of accuracy. And then he went on to justify his predictions:

"If I were to guess, I would predict that 40% would say Buy, 40% Hold and maybe 20% Sell. But my word for 2008 is rationalize. If I'm a perspective buyer, I must rationalize the fact that I need to buy as the debt markets allow me to buy. If I am a seller, I need to rationalize the fact that financing for the buyers of my properties is now constrained relative to where it was a year ago. That'll impact pricing for the foreseeable future. If I'm an owner and I bought at or near the top of the curve, I'm probably going to be a holder.

"If, however, I bought four or five years ago, and I built up a nice gain in the property by adding value in one way or another, a 25- to 50-basis-point increase in cap rates isn't going to erode the built-in value creation by that much. Therefore, I might sell because I need to monetize assets and I need to redeploy. I might have looked at the debt and equity securities that seem to be undervalued, and maybe there's a play there, and maybe in certain markets that might be oversold. I want to free up some capital to do that. That's why to me it's a rationalization process on the part of the investor community.