REITs' Rally Could Be Grounded

After four years of outsized returns and star status in a down market, experts don't think real estate funds will be raising the roof much longer.

Though they are outpacing stocks, bonds and just about everything but the long-short daily double at the dog track, prospective investors should heed the experts, who think real estate investment trusts, or REITs, can't sustain their recent rates of return.

High rates of home buying and a general building boom helped push the indices that track REITs -- the securitized versions of real estate portfolios -- to record levels, especially in the past 15 months. But with interest rates about as low as they can go, the entire real estate sector is due to cool, and that calls for caution, even in the face of attractive numbers from REIT mutual funds. ...