Interest rate fears have battered around stocks over the past week, and the Bricks and Mortar portfolio has not been immune to the volatility. Real-estate-related stocks have been particularly hurt by rising interest rates. For homebuilders, the rising rates mean increased borrowing costs for potential buyers. For real estate investment trusts, higher bond yields are viewed as competitive to steady dividends. Despite what the bears say, I believe higher interest rates are just a short-term hiccup for REIT stocks that own commercial real estate, because most of the quality names in the sector are still trading at
discounts to their private market values . That's why I still believe office owner Brookfield Properties ( BPO) is a good bet. The higher rates do, however, spell more immediate trouble for homebuilder stocks -- a main reason why I continue to have concerns about Ryland ( RYL). Despite some sharp moves in portfolio names, I'm maintaining my current ratings. Of the stocks in the Bricks portfolio, those offering the biggest upside from present levels are Macau casino developer Melco PBL ( MPEL) and Hilton Hotels ( HLT). Here is an update on where my picks stand.