The TSC Streetside Chat: Carl Tash Looks Ahead on Real Estate

Carl Tash has seen the world of real estate from all sides, from private development to REITs. Now, as the principal and portfolio manager at Cliffwood Partners, a Los Angeles real estate investment firm, Tash uses his decades of experience to sort through public real estate companies, looking for overlooked values as well as those REITs and real estate operating companies that appear overvalued.

After two years of REITs outperforming the broader market, Tash voices caution about their future performance. He cites current valuation in an environment of weak fundamentals, and the possibility that investors who profited from the recent runup in REITs will pocket the profits and invest elsewhere. Still, Tash has a knack for finding value in just about any market, and he highlighted his current investment ideas with TheStreet.com contributing editor Christopher Edmonds.

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TheStreet.com: Real estate investment trusts, or REITs, have outperformed the broader market for the past two years. And with the S&P 500 relatively flat in the first quarter, REITs are doing it again, gaining nearly 9%. Why are REITs doing so well?

Carl Tash: It's all about money flows. In a difficult market, dividend yields have attracted investors to REITs. At the same time, fundamentals have deteriorated for most property sectors over the last six to nine months. But relative to technology, the fundamentals aren't terrible. And investors take comfort in the "safe" dividends and, frankly, aren't doing a lot of research into fundamentals at this point. ...