Douglas Emmett

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Last up is Douglas Emmett ( DEI), a residential and office building REIT that owns properties in Los Angeles County in California as well as Honolulu. Offices are the vast majority of Douglas Emmett's revenue, with around 2,200 individual office leases making up approximately 85% total sales.

There are some big benefits to that geographic concentration. Most important, management knows its market. That expertise has helped Douglas Emmett capture above-market rates for its properties in many cases, and helped to offset some of the risks of putting all of the firm's eggs in one or two geographic baskets. Now that commercial real estate values appear to be turning the corner in high-demand sections of California, DEI should be able to shake some of the headwinds that have left investors anxious.

It's also positive that DEI has limited exposure to residential space - residential tenants are less sticky and laws are designed to protect tenants much more than landlords. While renting apartments in sought after zipcodes makes DEI's residential exposure more attractive than most, it's best kept limited to less than 15% of the firm's total business.

A short interest ratio of 11.6 means that it would take weeks for short sellers to exit their DEI position, a fact that makes this stock a prime short squeeze candidate.

To see this week's short squeezes in action, check out the REIT Short Squeezes portfolio on Stockpickr.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.

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