But some analysts think that the decline has been too severe and that many REITs are poised for a comeback. Even as the market was swooning, Standard & Poor's issued a report this summer offering a positive outlook for many property groups, including the industrial, office, retail and specialized REITs like lodging, self-storage and timber.
Keven Lindemann, the director of the real estate group at the research company SNL Financial, said he agreed that “the fundamentals appear to be fairly strong on most of the property sectors.” And, depending on an investor's time horizon, he added, “maybe that means it's a buying opportunity.”
So how do investors decide which REITs are worth acquiring now? Here are six crucial areas to consider.
MANAGEMENT Ralph L. Block, the author of “Investing in REITs” (Bloomberg Press, 2006) and publisher of The Essential REIT newsletter, thinks strong management is paramount.