Albuquerque Journal (Albuquerque, NM)

REITs group makes a rosy forecast.

Byline: Commercial Real Estate DIANE VELASCO Of the Journal

Real estate investment trusts had a stellar 40th anniversary last year and have promising earnings potential in 2001. That is the prediction of the National Association of REITs.

Created in 1960, REITs function much like mutual funds, combining the capital of many investors to acquire or finance all forms of real estate. With a 25 percent average earnings rate, REITs kept up with the best of the stock market last year, and analysts are forecasting a return of 10 percent to 15 percent this year.

Strong sector performances made the 25 percent return possible, said Michael Grupe, vice president and director of research for the association. The hotel industry leaped to the lead, posting a 45 percent return last year after posting losses in 1999. Apartment and office sectors both boasted 35 percent returns.

"The apartment sector benefited from a strong economy most of last year and higher interest rates that put a damper on the single-family (house) market," Grupe said. …

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