That's the whole point. There's no objective reason why this stock should be down 10% in a day. People are not thinking clearly, but panicking. The market is telling us nothing that is associated with clear,logical thinking. I currently hold $835,000 in five commercial reits-AHR,CSE,NRF,GKK, and RSO. Can anyone tell me why that is a bad investment for the long term? None of these fine companies have posted poor results to date, and defaults are near all time lows. I expect distressed commercial loans to increase, but not nearly to the degree we are seeing in their residential equivalents. I'm considering buying more tomorrow. At 28-30% dividend, the risk seems worth it, particularly since I plan never to sell them.
I suppose there are some of us that can never comprehend the "shorting" mentality that drives some of these stocks down. If this was an isolated case, one could assume that something was drastically wrong with this company. I am very much in your boat with holdings in RAIT, NRO and some others..there is no logical explanation why say NRO is trading way below NAV and getting hammered everyday. UNLESS there is some bigtime conspiracy where the Gordon Geckos of the world are intentionally running these things down so they can scoop them up at a discount. I'd almost want to add to my position some more..but did around 3 (EST) today and then watched it drop an additional 5%...and that ain't good.
From what I see, GKK and RSO are the first two mREITs to report earnings. GKK dropped 9.96% today, and RSO dropped 10.16% today. I believe that fears of holding mREITs through earnings are contributing to the sharp sales, but please do not hesitate to suggest alternate reasons.