This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

These REITs Lure Shoppers

Editor's Note: This is a bonus story from Jon Markman, whose commentary usually appears only on RealMoney. We're offering it today to TheStreet.com readers. To read Markman's commentary regularly, please click here for information about a free trial to RealMoney.


Acquisition fever has swept the normally placid world of real estate investment trusts, sending the prices of many of the best buyout candidates on unusual speculative surges.

Simon Property Group (SPG) started the buyout ball rolling a couple of months ago when it announced the purchase of discount outlet mall operator Chelsea Property Group (CPG) at a premium that shocked a lot of people. Then, last Friday, General Growth Properties (GGP) moved the ball further forward when it announced that it would buy Rouse (RSE) for $67.50 a share, well above the $55 the well-diversified REIT had been trading around at the time.

This turn of events is remarkable when you consider these stocks had undergone an unprecedented crash back in April, when a surprisingly positive employment report made everyone think that U.S. economic growth was advancing so fast the Federal Reserve would have to quickly raise interest rates. The prices of REITs fell across the board, with many of the best reaching their long-term support for the first time in years. As I explained at the time, in most cases the decline was based on a false premise and represented a terrific buying opportunity.

Those April and May lows attracted meaningful new money into the sector, and REITs have since risen both on the merits of their own internal growth plus their value as a relatively safe place to hide out from the tech storms. Since July 1, the Morgan Stanley REIT Index and the Nasdaq Composite have been virtual mirror images of each other, with the former up about 7% and the latter down 10%.

In past years, of course, investors have bought REITs mainly for their large dividend yields, with any capital appreciation possibilities serving as nice bonuses from time to time. But now the prices are rising like staircases in an office REIT skyscraper. Tuesday's trading saw investors favor mall operators in particular, sending shares of Macerich (MAC) up 3.25% and shares of Mills Corporation (MLS) up 3.25%. They yield 4.8% and 5%, respectively.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs