REITs Strong in Equity Office Deal's Wake

Several real estate industry watchers are scratching their heads on the lofty valuation of the Equity Office Properties(EOP Quote) buyout by the Blackstone Group. But just because there are valuation concerns, it's not time to become bearish on real estate investment trusts.

The huge flow of institutional capital into the space will dictate the group's performance for the rest of the year.

"In the short run, it is impossible to be bearish," says Mike Kirby, director of research with Green Street Advisors, an independent REIT research shop. ...