REITs.com

REITs closed the week strong, most notably ProLogis which had a monster Friday. The stock jumped over 42% after announcing a cash-tender offer on its 5.25% notes due November 15, 2010.  ProLogis is up 64% compared to last Friday’s close.

On the whole, Friday’s boost enabled REITs to post gains on the week. REIT ETFs RWR and VNQ are up 2% and 3% respectively compared to last Friday’s close.

The outlook going forward is far from clear.  Fitch is forecasting a tough year for REITs invested in malls and shopping centers as well as industrial and office properties, but foresees multi-family and healthcare REITs faring better.  Wachovia rates the healthcare REIT sector Overweight citing, in part, their stronger balance sheets and expected increased government spending. They single out Nationwide Health Properties and Senior Housing Properties Trust as REITs that should do well.

Not everyone agrees, though.  Greenstreet Advisors is forecasting a challenging environment for REITs specializing in healthcare properties. They argue that since a substantial percentage of this sector’s income comes from senior-living facilities, low property values might make it more difficult for seniors to sell their homes to finance a move into such a facility. Furthermore, with unemployment rising, more seniors might opt to move in with family instead of a facility to save money. Greenstreet expects this to put near-term downward pressure on Ventas, HCP, and Nationwide Health Properties.

Nationwide is up 10% over last Friday’s close, Senior Housing Properties is up 7%, Ventas is up 15%, and HCP is up 4%.

In other news:

• Cambridge Industrial Trust (Singapore) secured $262 million in financing
• American Land Lease Inc. is being acquired for $438 million.
• Investors are looking to pick up the pieces of Japan’s shattered REITs, including New City Residence Investment Corp
• MHI Hospitality Corp. cut next year’s annual dividend 70 percent
• Saul Centers announced that it will be cutting its dividend due to rising delinquencies in its retail properties.
• Fitch sees imminent defaults at General Growth Properties

Despite the uncertain future, some people are thinking it might be time to buy .

It was a bumpy week for REITs beginning with massive losses on Monday that effectively erased last week’s big gains.  Solvency concerns wiped out roughly a third of Denver-based Prologis and First Industrial Realty Trust’s value.  But REITs bounced back on Tuesday including ProLogis which jumped 26% on the news it secured over a hundred million in financing that it will use to refinance its debt and cut costs.  ProLogis and First Industrial Realty Trust both ended the week with huge gains on Friday up 35% and 21% respectively. While Friday’s surge pushed ProLogis up 27% compared to last Friday’s close, First Industrial slipped 9% on the week.  The REIT ETF, RWR, gained 11% on Friday, enough of a jump to post a 2% gain over last Friday’s close.

Still, the balance of the news this week was negative:

• ProLogis and Weingarten Realty Investors had their credit-ratings downgraded.   
• Prospect Asset Management Inc., a Honolulu-based investment fund, announced that losses incurred 
• Houston-based REIT announced that it believes its stock price is unjustifiably low and has decided to go private as a result.

Despite a tough environment in which many investors are retrenching and cutting costs, others are announcing deals including KBS, AMB Property Corp., Washington Real Estate Investment Trust, Canada’s Skyline Apartment REIT, and Malaysia’s Axis REIT.

The REIT Industry also got a boost in the Philippines where the government passed a bill that will permit REITS being listed on the Philippine Stock Exchange.

Going forward, all eyes will be looking at who will have to cut their dividends and analysts are making a few projections, including forecasting cuts at Anthracite Capital Inc. and NorthStar Realty Finance Corp.