IMHO: There have been major changes with a 9/11 kickoff of new trends that are "perm". Those changes will affect cities, travel, lodging, ins, etc., and will spread out and encompass more. Some of those trends are subtle at this time, but travel and lodging trends are dramatic and negative. Business will never again be what it was pre-9/11 for air travel and hotels.
For a less obvious example than hotels, I think the fundamentals have also been permanently altered for Self-Storage Reits. Further, those negative storage trends in place since 9/11 have been exacerbated by the ballooning housing bubble. Like hotels, I'm also leery about storage in the short-term; but, unlike hotels, I see positive trends to counter some of the negatives long-term.
I think business weakness in Self-storage, that may be reflected in more weakness in the commons and pfds by yearend, will present better opportunities and a chance to lock in safer dividends than are available in lodging. I'd watch the PSA pfds, for example, before I'd look at hotel pfds.
One Reit for which I think all the trends are favorable is PLD. I'm watching the weakness in PLD's stock with great interest. I bought PLD at much lower prices, and I'd be overjoyed if I see a price and another buy opportunity at about $22 even though I'll be averaging up again. In this bear, it's very possible, so I'm hopeful.
I think it'll pay to just wait, because the very few winners that investors have will be dumped before yearend to cover maybe 1/10 of all their losses. Program traders will add to the downside volatility. I may not get PLD at my price, but it doesn't matter. Although there are few winners this year like PLD there are others. Those winners may be up for grabs at bargain prices. I'd rather buy yearend dumped on winners, than year long dump on lossers. And the Shorts will be covering early next year.
For Reit speculators, I'd watch KM closely. KM just announced that they would be coming out of BK by July '03. On the one hand, I like KM's Hispanic marketing and customer service shift. Even thought I think they were to late in making the transition, it's a good move. The shift is responsive to and reflective of the new U.S. It fits a major U.S. demographic trend that's accelerating dramatically. IMO, all retailers and most other companies will make the shift or disappear from the U.S. scene. Maybe it's not to late for KM? On the other hand, I'm quite certain the government will destroy MSO. The slashing and burning of MOS could also topple KM given KM's precarious state. I wouldn't bet on KM or MSO, but I might place a bet on KIM -- if KIM sells off -- when the flames burn the slashed MSO and reach KM.