I talked to NRO today too...they noted they have not yet begun to de-lever. But it will happen soon. What can you do.
The REIT market is a bloody mess. GGP is likely going bankrupt, and that is causing panic. If the second biggest mall company can go bankrupt in a property type that is generally rock solid, anyone can. Of course, GGP bathed in leverage, and deserve it. Assholes.
There is nothing fundamentally wrong with NRO. The leverage certainly magnifies moves, but it is what it is. Frankly, since the beginning of 2007, REITs are down in aggregate roughly 40%. They are off more than 50% from their highs. Pricing is ridiculous. You can get a rock solid company like PLD for an 8%+ yield.
NRO's dividend is set for the next 3 months, and will be paid (according to the company). After that, assuming they'll need to de-lever a bit, my guess is the dividend gets cut...but it will all depend on how much debt they needed to buy in. My guess is anywhere from 10% to as high as 40%. But the stock has been discounting this cut for a while, and if REITs can stabilize by YE, they may not have to cut the monthly dividend. It seems as though NRO receives the proceeds in advance of declaring the dividend, so they have a good view of what they'll be able to pay.
This fund is managed for income, so cutting the dividend is a big deal, considering that is mostly your investor base.
As for AIV...yesterday it was marked up, and today it's just settling back.
This is gut wrenching, but I'm still long here. The dividend is the key. Frankly, if the government suspends short selling, I think the government ought to suspend the 1940 act requiring closed end funds to not exceed 50% leverage, given that the market is selling off on pure panic.