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Wall Street Journal: Why Pressure in Japan Is Undercutting Shares of U.S. Real-Estate Companies

According to The Wall Street Journal:

The recent selloff by the Japanese also helps explain what has been a bit of a mystery in the U.S. REIT market: the long-running weak values of REIT shares, especially compared with what the companies would be worth if their properties were sold in the private market. That discount currently is close to 13% for the major REIT sector, which includes office buildings, malls, industrial and apartments, according to Green Street.

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“We can better understand the disconnect [between public and private markets] because you’ve seen capital flows going in different directions,” said Dave Bragg, a managing director of Green Street.

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“We can’t be completely sure where it’s going to go,” said Mr. Bragg of Green Street, referring to the stake that Japanese funds own in the U.S. REIT market. “But it seems more likely going to go down than up.”

To read the full article from The Wall Street Journal, click here.