One of the best ways to tell what's going to happen with private market real estate pricing is to look at the public market, according to Kirby. “The public market right now is saying is something really bad is going to happen to private real estate pricing.”

He added that he did not necessarily fully buy into that. “But you're also foolish not to listen to it because it is a signal that has worked in the past. When REITs are trading discounts to NAV (net asset values), private market values typically go down over the course of the next 12 to 20 months.”

Kirby distinguished different property sectors. The drop in pricing in the index implies dire times ahead for owners of gateway offices and apartments, particularly in New York. “Those are the asset classes in the public space that are trading at the biggest discounts, meaning the public investors don't believe private values are accurate. The truth is probably somewhere in between.”

Even if it is somewhere in between, that still means private values will probably go down, not up in those spaces. In good news, the public market indicated industrials are priced right, with a solid outlook. There's no one answer for all REITs but the index was more down than up, Kirby said.

Investors, beware with malls rated B or lower because even the public stocks are trading at massive discounts. “Really, it's how long you're going to be able to clip a coupon and I think the coupon's going to run out on you before you capture your full return on investment with some of these malls. You're going to see an awful lot of carnage in these spaces,” he said.

However, there is differentiation amongst the classes of malls. To stay competitive, A malls have had to spend enormous amounts of capital.

“You've seen malls reduce their apparel centers hugely and restaurants filled the void in the center mall. The mall occupancy rate at A, A++ malls is as tight as it has ever been,” said Kirby.

Chandan asked with the constant talk of the need to reposition malls to emphasize the experiential—just how much food retail can take over the malls?

Kirby pointed out with 1,300 malls in the country, if 800 shut down—it's not a bad thing if you're competing in a business and your bottom 800 competitors leave. He added that, of course, cities don't need too many malls that are 100% restaurants. But if all the restaurants in the closed malls go away, the cities will need new restaurants in town.

He noted cheap debt in Europe provided the catalyst for Europe's biggest mall landlord Unibail to justify buying a big owner of US and London malls (Westfield) at a price that validated NAVs.

Kirby pointed out that there are nearly 200 REITs in the US and added, “We don't need this many.” He said there are far too many in several property sectors, including 15 strip center REITs—when there probably should be six.

REITs will be further discussed at the RealShare Net Lease event on April 4-5, at the Park Lane Hotel. On April 5, there will be a panel discussion “REITs: A Look at the Trends Public & Private REITs.” Sam Chandan, chair and associate dean, NYU Schack Institute of Real Estate, and founder of Chandan Economics, will be the conference keynote speaker.