Real Estate Investment Trusts (REITs) and Commercial Real Estate ...

I have written numerous papers on real estate investment trusts (REITs) over the years. I find them an interesting investment vehicle and alternative to holding commercial real estate or mortgage-backed securities directly.

REITs are similar to closed-end funds but with some form of real estate (commercial property, mortgage loans, MBS, etc) as the underlying asset. The performance of publicly-traded equity REITs (backed by commercial real estate) has been stellar in 2012. As an example, the Dow Jones Equity REIT Total Return Index has risen 10.48% so far this year (annualized to 48.50%). That sounds much better than the price declines in the housing market.

And if we compare the performance of equity REITs to the Moody?s REAL Commercial Property Price Index, we see that the DJ Equity REIT index has shot up while the Moody?s REAL property index is lying flat.

That is an apples to oranges comparison because the DJ Equity REIT index contains dividends to investors which the Moody?s REAL index is only the price index. To keep a more reasonable asset class comparison, here is the DJ Equity REIT Index versus the NCREIF Property Return Index.

That is a better fit. But note that the indices are on a different scale. That is, DJ Equity REIT Returns are higher than NCREIF Property Returns, although they share a common pattern. There are several reasons for this divergence. First, DJ Equity REIT Returns are leveraged (the REITs borrow money to leverage up their returns) while the NCREIF Property Return Index is unleveraged. Second, Equity REITs are often actively traded while the NCREIF property index is not. There are other issues as well that prompted Moody?s to develop their REAL Commercial Property Price Index.

And if we look at DJ Equity REITs versus NCREIF Total Return Index over a longer period, the same patterns hold.

Dow Jones Equity REITs versus S&P 500 Index

If we compare the DJ Equity REIT Index to the S&P 500 Index, you can see of the top chart that the two indices are highly correlated.

Here is the correlation between the two indices. DJ Equity REIT Returns are highly correlated with the S&P500 Return Index, with a few notable exceptions (2008, 2010 and 2011).

The beta for equity REITs relative to the S&P 500 index is around 0.45 indicating that Equity REITs are about half as risk as the S&P 500 Index in terms of systematic risk. In other words, Equity REITs are a defensive investment (they don?t rise as much as the S&P500 when it rises, and doesn?t fall as much when the S&P500 falls, on average).

So, equity REITs are an investment vehicle which is 1) low beta, 2) highly correlated with the S&P 500 index, and 3) detached from the Moody?s REAL Index.

Bear in mind that REITs often have fairly high dividend yields making them more like bond funds with an equity kicker.

European REITs?

We are aware of the Eurozone?s financial problems. But has it drifted into their REITs as well? Yes, European REIT returns are stagnant since mid 2009.

And the spread between DJ Equity REIT returns and the European REIT returns is widening:

Summary

We have Equity REITs rebounding while their core investmens are ? stagnant.

I wonder how of this is driven by The Fed?s Zero Interest Rate policies? That is, is there a bubble in REIT prices?

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Carrie Underwood Rocks the House at ACM Awards


Carrie Underwood kicked off Sunday night's Academy of Country Music Awards with a big blast of rock 'n' roll, showing her vocal chops in belting out "Good Girl."

Her sexy black and magenta mini-dress was a nice touch too.

To those looking for a lot of traditional twang out of the country gala, Carrie's song was something of a warning shot ... this is 21st century country music.

The ACMs are very much a celebration of what the genre has become, with arena rockers (Kenny Chesney and Jason Aldean) and a wave of 20-something upstarts incorporating different sounds into the genre (Taylor Swift, Lady Antebellum).

See what you think of Carrie's performance below:

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How did humans evolve to walk upright? Fossil discovery complicates the picture. ( video)

Foot bones unearthed recently in Ethiopia belonged to a contemporary of 'Lucy,' the 3.2-million-year-old early human discovered in 1974. But these bones seem to belong to a different species, one thought to have split its time between walking upright and climbing trees.?

Learning to walk indicates a child's progression from infant to toddler. But walking on two legs is uncommon among mammals. In fact, standing and walking on our own two feet helps to set us apart from other mammals.

Skip to next paragraph A few million years ago, our ancestors stopped climbing trees and started walking upright, on two feet. To work out how and when this happened, researchers look for fossils -- and recently they found a surprising set of foot bones in Ethiopia. The foot is about 3.4 million years old, making it roughly the same age as 'Lucy' and her species, Australopithecus afarensis. But while Lucy's species had feet much like modern humans, the new foot has an opposable big toe, like a chimp. So do the foot bones represent a new species of hominin? Watch the video and decide.

New findings reported earlier this week in the journal Nature show that early hominins held onto their ability to climb trees longer than scientists previously thought.

Discovered in Burtele, Ethiopia, recently unearthed right foot bones are about 3.4 million years old and is thought to belong to a new species. The stiff joints of foot and toe bones suggest that the early hominin was capable of bending its foot upward to enable walking. The thumb-like big toe, however, would have helped it to also climb trees, like African great apes.

?It?s a lovely little foot to have,? paleoanthropologist Donald C. Johanson?told The New York Times. Working in Ethiopia in 1974, Johanson?discovered "Lucy," the first specimen of Australopithecus afarensis, a species thought to be either a human ancestor or a close relative of one.?Johanson's discovery indicated that bipedalism preceded humanity's increase in brain size.?

This new finding suggests that the evolution of bipedalism was more nuanced than we knew. The dual-purpose bones are about the same age as Lucy's, but scientists think that Lucy's species mostly moved by walking upright. Since two species of hominin existed at the same time, with different shaped feet, it appears that hominins evolved to walk more than once.

There are still many unknowns surrounding the evolution of humans' bipedalism.

Hominin bones of this age are uncommon. Their small size makes them susceptible to scavengers and deterioration. So there just isn't much evidence for scientists to use in their interpretations.

Without the rest of the Burtele skeleton, it is difficult to determine precisely how this hominin moved. As this NPR story points out, bipedalism requires evolutionary changes from head to toe.

"We need more fossils to determine what sorts of bodies went with these feet," wrote Daniel Lieberman, an evolutionary biologist at Harvard, in a commentary in this week's Nature.

Scientists will continue to hunt for more fossil evidence to expand their understanding of human bipedalism. This work, according to Lieberman, "will require researchers to continue getting their feet dirty in the field and the lab."

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Paula Gordon: As the World Turns

Something big happened on Friday. "We Shall Overcome" spontaneously erupted with the announcement of ... a new union! SAG-AFTRA, one union, now stands where once there were a separate Screen Actors Guild (SAG) and the American Federation of Television and Radio Actors (AFTRA). Memberships of both overwhelmingly voted to merge. They include many of the faces, voices and much of the music heard and seen in every part of the world, in films, on television and radio, on cable and increasingly in the emerging world of new media.

These union members' highly visible roles in the world incalculably magnify the powerful signal this merger sends to corporate America: the labor movement is far from dead. Members of two unions, traditionally at odds, have figured out there's strength in organizing and power in unity.

While it doesn't hurt that George Clooney, Octavia Spencer, Betty White, Michael J. Fox, Robert DeNiro, Jon Cryer, Jane Curtin, Dana Delaney, Danny DeVito, Jenna Fischer, Felicity Huffman, Alfred Molina, Rainn Wilson and hundreds of others known and unknown, of all ages, ethnicities, and identities endorsed One Union -- it also took organizing. Strong union leadership, strong staff and the thousands of hours that members of both unions volunteered all added up to a remarkable result: where "only" 60 percent of each union's membership voting "yes" were required to carry the day, both memberships affirmed by considerably more than 80 percent (SAG by 82 percent, AFTRA by 86 percent).

A decade ago, these two unions tried -- and failed -- to merge. What changed? The world.
Technology changed radically. Media owners became fewer and bigger. Corporations grew impossibly arrogant as regulations grew laughably lax. Extremists in every corner of the country, in ever sector, and in every endeavor grew so bold they now seek to overtly take control of the United State government (read Koch Brothers). The good news about the past calamitous years of corporate greed and avarice is that the perpetrators of homegrown abuses have been teased out of the woodwork. They have grown reckless with their presumed power.

And then there was the wake-up call from Wisconsin. Governor Scott Walker's attack on organized labor (fronting for the Kochs, among others) there certainly helped the AFTRA's and SAG's memberships view the road ahead with new-found clarity. Thank you, Governor Walker. We look forward to watching SAG-AFTRA members in newsrooms across the nation reporting on a recall vote which can't come soon enough.

This affirmation of union solidarity bodes well for other working people. It means that negotiations will be fairer, that economic benefits will be distributed more equitably rather than being usurped by a concentration of economic power in the hands of, yes, the .1 percent. On Monday, working people across the nation can stand a little taller, dream a little bigger, more readily accept the fact that too many employers have lied to them about unions. Perhaps some will even pluck up the courage to call in a union organizer.

As good as this merger will be for people both in management and labor across the news, entertainment, recording, and motion picture industries, it is even better for the nation. This resounding affirmation of collective action, enacted by two highly visible unions now merged into one, is a great deal more than the sum of its parts. It should be seen as a warning to exploitive employers, especially coming as it does from the heart-beat of American culture.

Unions are far from perfect institutions; indeed, I know of no institution on earth which, given unchecked power, will not exploit and abuse that power. For many workers, unions are preferable to standing alone in the face of the overwhelming power of corporations. When any group holds all the power, bad results are inevitable. For balance, there must always be a counter-force.

On a personal note, I have been a proud union member since 1976. When WMAQ, the NBC-TV station in Chicago, hired me to host a weekly show, joining the union was a most welcome requirement to work there. Over the years, my membership has made a profound difference to me and my family in terms of benefits I've earned, especially health insurance. But my union membership has meant a great deal more to me than simply economic benefits. Looking into the future, quite literally with tears in my eyes, on this momentous occasion when two great unions have become one, I am immensely proud to be a part of the larger, historic stream of ordinary and extraordinary people coming together, organizing, and fighting the good fight so that countless individuals' lives -- and America itself -- can be stronger, better and more just.

So in our home we're celebrating ONE UNION this weekend. And, as SAG-AFTRA's new co-President Roberta Reardon reminded us at the end of the merger announcement, "Remember, the weekend you'll be enjoying is a union creation!"

?

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Mark Wahlberg Goes Shirtless In Miami (PHOTO)

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He's always been known for having ripped muscles, but 40-year-old Mark Wahlberg proved he's bigger, buffer and beefier than ever by going shirtless on the set of his new flick in Miami on Friday.

Read the whole story at www.tmz.com

Contribute to this Story:

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Expedia adds to Google's EU antitrust woes, decision expected after Easter

Google's position as the dominant search engine doesn't come without a price. Smaller search sites have already tapped on the EU Commission's door to register their complaints about how they are ranked, and Microsoft has also let its feelings on the matter be known. Now, we can add the Redmond spin-off, Expedia, to that list of sore losers disgruntled firms. The travel search site claims it has specific details outlining how the search giant has violated European anti-competitive laws. A Google spokesperson issued a statement saying "We haven't seen the complaint yet, but we've been working to explain how our business works, cooperating with the European Commission since this investigation began." The EU Competition Commissioner says a decision will be made after Easter, at which point Mountain View will either be charged, or the investigation will be dropped. If only that were the end of its EU troubles.

Expedia adds to Google's EU antitrust woes, decision expected after Easter originally appeared on Engadget on Sat, 31 Mar 2012 13:02:00 EDT. Please see our terms for use of feeds.

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US women seek football revenge against Japan

By ERIC TALMADGE

Associated Press

Associated Press Sports

updated 12:50 p.m. ET March 31, 2012

SENDAI, Japan (AP) -It was one of those games - one of those really big games - that just doesn't sit right for U.S. women's football coach Pia Sundhage.

As far as she is concerned, her team played better than Japan in last year's World Cup final. She still thinks they should have won.

Now, she is looking ahead to the Olympics. And again, Japan is on her mind.

"We have something to prove every time we play Japan," Sundhage said Saturday ahead of a matchup between the two rivals at the Kirin Challenge Cup on Japan's home turf.

The exhibition tournament features three of the top four-ranked teams in the world. The U.S. national team is ranked No. 1 just ahead of Germany, while Japan is No. 3. The other team competing for the title, Brazil, is No. 4.

The U.S. women's squad, which plays Japan on Sunday, goes into the match the favorite. They have a solid record against the Japanese - 22-1-4 - but have lost some big ones lately.

In the victory that made them national heroes, the Japanese team came from behind twice and held on to better the U.S. women in a penalty shootout following a 2-2 draw to win the World Cup final in Germany last summer. It was the team's first win over the United States, and came as the country was still coming to grips with the devastating earthquake and tsunami that ravaged the northern coastline of Japan in March last year.

"In the World Cup, I think we played better than Japan," Sundhage said. "I think we were a little bit unlucky."

But in their most recent game, the Japanese also won 1-0 on March 5 to advance to the final of the Algarve Cup in Portugal. The U.S. had to settle for third place, but went out strongly with a 4-0 win over Sweden. Japan lost the final to Germany.

Both teams are now looking ahead to the Olympics, which start in July in London.

"We are ready and well," Sundhage said. "I don't think we are as well connected as we will be for the Olympics. We are building up for that."

Japan's coach, Norio Sasaki, said his team is at it peak, although it will be playing without star midfielder Homare Sawa, the FIFA women's world player of the year.

"This is a really important chance for us to beat the United States and Brazil ahead of the Olympics," he said. "They are both great teams."

Sundhage said her team will be focused on playing an aggressive game and will try to keep possession of the ball so that they do not have to defend as much against the Japanese, who are a highly skilled, technical squad.

"One thing is absolutely clear - they have always been a technical team, and they are a more physical team today," she said.

After Sunday's opener, the U.S. plays Brazil on Tuesday. The final game, Brazil vs. Japan, is on Thursday.

? 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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??Arlo's Hat Trick: Russ Thaler and Arlo White preview MLS matchups between FC Dallas-DC United and the LA Galaxy-New England Revolution.

Man City misses chance to pressure Man United

??LONDON (AP) -Manchester City missed the chance to put pressure on Premier League leader Manchester United on Saturday when it stumbled to a 3-3 draw against Sunderland that ended its record winning streak.

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Biden confident high court will affirm health care

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