http://www.reit.com Foreign investors view the U.S. as a more favorable place to invest today than it has been in the past five years, according to Jim Fetgatter, chief executive of the Association of Foreign Investors in Real Estate (AFIRE).

In a video interview with REIT.com at the NAREIT headquarters in Washington, D.C., Fetgatter shared some of the results of the association’s 20th Annual Foreign Investment Survey.

He said that the U.S., which at one point had always scored highly in the annual survey as a stable, secure place to invest, has suffered from a decreasing score in recent years.

“That score has been gong down significantly in the past five years,” Fetgatter says. “For some reason this year it went back up. Perhaps it’s in comparison to other parts of the world but nevertheless they view it as being more stable and secure.”

Additionally Fetgatter said that investors also perceive the U.S. as a place for less possibility of capital appreciation. He said the perception is that all of the appreciation has gone out of the capital markets that they want to invest in.

When it comes to countries that investors view as some of the more favorable emerging markets, Brazil was the most popular survey response, according to Fetgatter.

“That was a surprise to us all,” he said, adding that investors are also still favorable on China.

“There were more countries listed in their responses this year than there has been in the last several years. They’ve been very conservative in which emerging markets they’re thinking about going into,” he said.

In terms of U.S. investments however, Fetgatter said the survey results still primarily favored the major gateway cities such as Washington, New York, San Francisco, Los Angeles, and Boston.

“They have not really spread out to any other city, at least as not as far as office and retail are concerned. Some are investing in secondary cities if they can buy a portfolio of multifamily housing,” Fetgatter said.

By Carisa Chappell

Duration : 0:3:9

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http://www.reit.com Many REITs were able to acquire assets in desirable markets in 2011, according to Haendel St. Juste, equity research analyst with KBW.

In a video interview with REIT.com at REITWorld 2011: NAREIT’s Annual Convention For All Things REIT in Dallas at the Hilton Anatole hotel, St. Juste pointed out that the acquisition pace is playing out as expected.

He said that banks were putting more assets on the market as over levered borrowers were “facing the music.”

“The REITs were able to take advantage of their cost and access to capital to really be able to pursue and acquire some well located assets at, more often than not, very reasonable prices,” St. Juste said.

Today, the cap rates are in the high fours and low fives for a high quality asset in one of the core coastal markets, according to St. Juste. He added that there’s a good chance for REITs to create value with those acquisitions, especially with good NOI growth over the next couple of years.

In terms of how 2011 has fared, St. Juste said most REITs took a conservative approach amid the uncertain economic outlook.

“We weren’t seeing much job growth and I think most tended to default to a more conservative baseline projection for their year,” St. Juste said.

However, he added that there were a few surprises in the apartment sector because landlords were able to increase rents, without material job growth.

“Despite what you read in the news, apartment fundamentals are strong and you have a number of confluence factors driving that,” he said.

In addition to a decline in home ownership rates, St. Juste said that the apartment sector is benefiting from a reduction in supply because of the construction freeze during the downturn.

He said that factor, coupled with a modest job growth among the rental age population of 25-34 year olds, places the apartment sector in a good space.

“These companies are professionally managed, have strong balance sheets and there is prospect for dividend growth across many of the sectors, especially in apartments,” St. Juste said.

By Matt Bechard

Duration : 0:3:28

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For the latest Warren Buffett, go to http://WarrenBuffettNews.com –

Buffett doesn’t care whether something is large-cap, small-cap, micro-cap, or whatever. What is more important is whether it is a good business and whether he can understand it. On balance, large cap businesses have done much better recently than anyone would have ever dreamed of. This has led to much higher valuations. Whether this is a permanent development is another question.

There has been enormous securitizations of debt in the real estate industry. It has been a bad idea to own real estate through a corporate structure because there is a double taxation problem. REITS have somewhat solved this problem, but it is still usually better to own the real estate yourself rather than to invest through a third party intermediary that is going to take a slice of the cake.

There are a lot of silly valuations placed on real estate companies by people who don’t understand the business whatsoever. They just don’t understand how illiquid property like this really is, so you can’t value it like you would a liquid stock. But Buffett and Munger understand real estate and would be open to opportunities that might present themselves.

Duration : 0:6:29

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http://www.reit.com In a video interview with REIT.com at REITWorld 2011: NAREIT’s Annual Convention For All Things REIT in Dallas at the Hilton Anatole hotel, CEO Trevor Bond said that W.P. Carey is invested in about 28 industries at any given time. He said any one of the company’s funds may have 20 or so different industry types represented within it.

“So naturally, as you get ups and downs in the economy, those risks will be buffeted by the spreading out of those risks,” Bond said.

W.P. Carey also views diversity as more complex than usual, according to Bond. He said the company likes to diversify by country, or region within a country, to get the full benefits of relative movements in different economies.

However, he said one of the primary benefits comes in the form of having long term leases. Bond said long term leases take the risk out of the short term swing of its investment.

“With any given dislocation, such as the one we’re currently in, if you have a five to seven year down cycle and we’re signing leases that are 15 to 20 years, we feel comfortable that if we’ve done our homework and evaluated that particular tenant and credit appropriately, as long as they can continue to pay rent we can deliver income to our investors,” he said.

Bond said that the best investment opportunity is in the triple B credits or below. He added that they may be very good companies that experienced difficulty accessing the credit markets at a particular time.

“So we can step in and provide them with credit at a time when they might not be able to get it. We’re seeing quite a lot of that; that’s been our sweet spot,” Bond said.

Bond has also noticed more good credits in secondary markets where there hasn’t been a lot of new construction.

“We are seeing some very good credits that either want to build a new campus or take over existing buildings, or use our funding to renovate it and then occupy that building,” he said.

By Matt Bechard

Duration : 0:4:17

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http://www.reit.com Mark Zalatoris, president and chief executive officer of Inland Real Estate Corporation (NYSE: IRC), said the company’s occupancy levels have improved as new tenants have entered key markets in Chicago and Minneapolis.

Speaking with REIT.com during REITWorld 2011: NAREIT’s Annual Convention for All Things REIT in Dallas last month, Zalatoris said those new tenants include Ross Dress for Less, Gordmans and H.H. Gregg.

“We have been very fortunate in that we have been the beneficiary of their market expansions,” Zalatoris said. In addition, he said, “some of our tenants are doing some right-sizing and we have been able to offer them the right type and size of space and drawn them from competing centers.”

Inland has capital available to pursue strategic acquisitions, including funds from Dutch pension fund PGGM. Zalatoris said the two are targeting necessity-based shopping centers in the upper Midwest.

Looking to 2012, Zalatoris said what has him most optimistic is that there is capital available (particularly from inland’s partners including PGGM) and there are quality acquisitions to target.

“We are also working with some of our developers we have done business with in the past on off-market deals,” he said.

Zalatoris said he expects to see the company continue to have a robust pipeline of new acquisitions going into 2012. “The fact that the retailers feel very optimistic about the future and are continuing to express a desire to expand should continue in 2012 as well,” he said.

On the flip side, Zalatoris said macroeconomic issues continue to be a concern throughout the real estate industry and country as a whole.

“There is concern European contagion could possibly spread back to the United States. Consumer sentiment is what could impact our retailers in a negative way. And if it does turn negative there expansion plans may be scaled back and that would trickle down and affect us,” he said.

By Matt Bechard

Duration : 0:3:49

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