REIT executives and directors spent close to $60 million on their companies' stocks in the second quarter, the largest amount in the past 26 quarters, according to research by Thomson Financial.
After performing strongly in recent years, REITs have come down sharply this year. The result is that REIT stocks are trading at a significant discount to the value of their underlying real-estate assets, said John Lutzius, chief executive of REIT research-and-trading firm Green Street Advisors.
"There is a big disconnect between prices on Wall Street -- REIT prices -- and prices on Main Street -- private market pricing -- and I think that to the extent that insiders are buying, that's probably what they're looking at," he said.
During the quarter ended June 30, REIT insiders spent $59.8 million to buy shares, more than twice as much as any other quarter since 2002, according to the Thomson report. The bulk of last quarter's purchases were made at five companies, with General Growth Properties Inc. leading the pack with $38.4 million of stock purchases. The other four are Colonial Properties Trust, Alesco Financial Inc., Ashford Hospitality Trust and Capital Trust Inc.