Real Estate comeback

Buy between 45 and 50

3 Stocks I Saw on TV: Dan Fitzpatrick examines three stocks viewed on Fast Money. Today's stocks include Apple, ADC Telecommunications and Boston Properties.
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The worst-rated fund of the group, the Kensington Strategic Realty Fund (KSRAX), holds real estate investment trusts, or REITS. Key holdings include Simon Property Group (SPG), Equity Residential (EQR), Boston Properties (BXP), Vornado Realty Trust (VNO) and Public Storage (PSA). Read more here.

Shares of Boston Properties (BXP) closed significantly lower on Tuesday as did Simon Property Group (SPG) as well as the iShares Dow Jones US Real Estate ETF (IYR) which tracks the sector.

Strong core real estate holdings in Boston, NY & Washington

Q: Given the state of things, should investors keep their distance from REITs, or step in while prices are down?

A: I have never seen REITs cheaper than they are today. The three largest REITs I would recommend are Simon Property Group [SPG], the biggest owner of malls and other retail properties in the country; Boston Properties [BXP], a large owner of Class A offices in New York, Washington, Boston and San Francisco; and AvalonBay Communities , [AVB], one of the largest owners of rental apartments in the most vibrant rental markets on the east and west coasts. All three are well capitalized, in the Standard & Poor's 500, extremely well managed, well positioned from a property standpoint, and with a lot of capital so they aren't going to be caught in a liquidity crunch. Here is an illustration: Simon is trading in the mid-40s with a dividend yield of about 8%. Its high was over 100 per share. When the economy turns, retail will start growing again. There is no reason Simon's share price couldn't get back to its old high in the next few years. In the meantime, the dividend pays you to wait. Similar metrics apply to Boston and AvalonBay.

REITs Remain Resilient: Mall traffic is down because of retail bankruptcies and a strapped consumer, but Jay Rosenberg, portfolio manager for the five-star First American Real Estate Fund, says REITs will remain resilient. Here are his top real estate plays.

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