Scott Rechler Talks Real Estate On CNBC (BXP, VNO)

Scott Rechler, CEO and Chairman of multi-billion dollar private real estate company RXR Realty, appeared on CNBC's Strategy Session today with David Faber and Gary Kaminsky. Rechler said that now is a good time to invest in REITs, despite the fact that prices have been pushed up significantly by investors in search of yields. One of the attractive advantages of REITs in the current environment that Rechler cited was their low cost of capital. He did stress, however, that investors need to be careful in their selection process. Among the specific names that were mentioned was Boston Properties BXP and Vornado Realty Trust VNO. Rechler cited three developments that must occur in the next three years to continue to propel REITs. First, he said that asset prices need to rise, which to an extent, is already happening. The second development that needs to occur is for liquidity to increase in the debt and equity markets. The third factor that is needed is an improvement in the overall economic landscape. The SPDR DJ Wilshire REIT ETF RWR has gained more than 23% year-to-date, making REITs one of the top performing sectors of 2010.