Whats inspiring the US real estate market at the moment, its showing indecent haste, has there been remarkable news?
There is speculation that the surviving bigger REITs will buy out the weaker players. Takeover speculation topped with a nice lil' short squeeze. I can't wait for the equity offerings over the next week. I am sure GS, MS et. al. are busy preparing dozens of offering documents. Of course, after a few juice upgrades to get the "right pricing"
I have no idea. Reit's yield is a bit over 4%. Just like it was before crash. Unless people expect it to rise.
Who cares what news is out there just drive down a busy commercial street and take notice how many spaces are for lease, there are millions of square feet of commercial real estate available to anyone and everyone.
So how do we take advantage of this? Obviously you're saying the market is wrong? I've been short EQR from 23.70 to 30.25. I'm down 21k on it. Should I double up because there's "tons of available sqft" and "commercial real estate is going to hell"?
The market is wrong, its wrong because it was manipulated to the upside, im not saying its wrong because I continue to short it, but its wrong because of the false impression of how everything seems to be coming together as nothing ever happened to begin with in only 6 short months. If this rally had taken place over 3-4 years I would call it reasonable however seeing a 50% spike in the indexes in only 5 months has to have some bulls scratching their heads. Every time I go out I take notice of all the commercial real estate available to the public. I was talking with someone last week about a new development going up, it was in the works for about 3-4 years now. They had many well known companies coming into the developing area but have found out a few have backed out in the last year prompting them to put the project on hold for the next 6-12 months, and these were some high end retailers. Im just pondering on who is going to come in and start leasing 12,000SQ of commercial real estate over here and 25,000SQ of commercial over there and 5500SQ over here. I still believe we have too many retailers out there that are on the verge of closing up, I mean how many gaps and starbucks does one city need. There is a street I know of and in less than a mile there are 3 dunkin donuts in a row. WHY???? I think any slight return to GDP growth in our economy will be short lived, we might get a quarter or 3 of positive growth, but I do think it will be impossible to sustain once these programs shut down and stimulus is finally 100% pushed through.
Speaking of commercial real estate, SPG is looking ripe for a short.....I'm rarely successful at posting hyperlinks to charts, so if this doesn't come through, pull up a chart. http://stockcharts.com/h-sc/ui?s=SPG&p=D&yr=0&mn=6&dy=0&id=p69491477968
IYR just isn't what it is cracked up to be. Look at the holdings. Some of these bank failures on Fridays are due to commercial loans. http://us.ishares.com/product_info/fund/holdings/IYR.htm You have to wait for spg to crack, public storage your number 2 holding?? Bah. This isn't a good product imo.
SRS is acting up again, like a dormant volcanoe. If it breaks this trend line we could repeat. You know how this thing moves. Last time I called it it was a 10 bagger; actually the time before, last time was a false alarm depending on you timeline. Coming up on the anniversary of the worst month in history, the commercial RE debacle is only starting to come into the spotlight. Not pumping just saying.