AvalonBay Communities is benefiting from an increase in the number of renters, many who have been displaced by foreclosures or who have been unable to buy because of tighter lending standards. The REIT could be poised for long-term growth as many of its properties are in urban areas. "This is a huge advantage as the nation will slowly desuburbanize and reurbanize in response to increasingly tight fuel supplies," Timothy Siegel writes in a Seeking Alpha commentary.
JPMorgan Chase is the latest Wall Street bank to appoint a team focused on the needs of sovereign-wealth funds, of which the market power is ballooning. John Moore, who led Bear Stearns' Asia unit, will lead JPMorgan's efforts in the sector. The bank estimates that sovereign-wealth funds' assets could top $9.3 trillion by 2012.
Commercial real estate starts will continue to weaken in 2008, according to a report by Standard & Poor's. The analysis by David Wyss, which appeared in BusinessWeek, did, however, note that construction spending should be higher this year. The downturn in the commercial sector has not garnered as much attention as the housing slowdown.
Merrill Lynch might be forced to sell its 49% stake in money-management firm BlackRock to raise capital. The option was raised after Merrill's bid for Bloomberg to buy out its stake in the news and financial-data company faltered. Merrill CEO John Thain said he thinks the company's 20% stake in Bloomberg is worth $6 billion. But people inside Merrill said Bloomberg offered about half of that price.
Some of the world's biggest property fund firms may one day trade property derivatives in a material way, according to leading industry figures that spoke at the Reuters Global Real Estate Summit. For such a scenario to evolve, the young market would need to continue to grow. REITs may pose more of a challenge for day trading.