Real estate investment trusts remain a viable rate-cut play and perhaps not coincidentally, two of them made their debut as publicly traded companies Wednesday.

American Financial Realty Trust ( AFR) and Maguire Properties ( MGP) each raised nearly three-quarters of a billion dollars in newly priced IPOs.

American Financial, the brainchild of one of the inventors of mortgage-backed bonds, sold 56 million shares at $12.50 each, the upper end of its range, for proceeds of $700 million. Meanwhile, Maguire Properties sold 36.5 million shares at $19 each, the low end of its range, also for $700 million. It was the first time that two IPOs came to market on the same day since Vistacare ( VSTA) and Commercial Capital Bancorp ( CCBI) last December.

"The conditions are right for REIT deals," said Jeffrey Hirschkorn, a senior analyst at IPO Monitor. "This is a really good market for real estate." Since the start of the year, the Morgan Stanley REIT Index is higher by 10.6%. However, REIT stocks have historically performed better in bear markets. And there are some recent signs that investors are becoming more bullish.

For his part, Hirschkorn argues that a bull market would potentially be good for REIT occupancy levels. "If we get robust earnings, companies will be able to lease their properties faster," he said.

Moreover, REITs pay 90% of their income in the form of a dividend. "That is the most important thing," said Hirschkorn. The average dividend on a REIT is about 7% -- a decent sum in any market.

The IPO spurt bodes well for the third quarter, when there are several deals in the pipeline. But 2003 is still on track to be the third year in a row with fewer than 100 IPOs, the first such stretch since 1979.

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