NEW YORK CITY-Real Estate as an alternative to stock investments? If you thought you’ve heard it before, you ain’t heard nothing yet. While the country reeled at Tuesday’s stock market nosedive and wondered what the implications would be on the economy, real estate experts found their glasses more than half full. Because despite falling stock prices across the globe, a stock market correction could have a positive impact on real estate, pushing yet more investors into this “stable” industry.“We don’t think a stock price correction affects the real estate market,” Fitch Ratings’ Steven Marks tells GlobeSt.com and Moody’s Merrie Frankel agrees. “It’s still full-steam ahead. I haven’t seen anything changing in people’s perspective of the business in the last 24 hours.”

Frankel points to Tuesday’s announcement that Centro Properties Group plans to purchase New Plan Excel Realty Trust for $6.2 billion as proof that the real estate industry and specifically mergers and acquisitions will continue to thrive in 2007. With hardcore assets behind the industry there is liquidity. “New Plan is a great example. At the end of one of the worst stock days in years Centro still forged ahead with the deal.”

Frankel and Marks say the only impact this could have on M&As would be the selling price of a company. Marks says that could drive more companies to consider acquiring another at a cheaper price than could have been paid months ago. Although Frankel says that while a company’s price is often impacted by stock prices, many times the company’s assets are the bigger factor in determining the price.

The market’s volatility could draw more investors, according to Deloitte’s Dennis Yeskey. He says, investors “may shift some more money back into commercial real estate, which is more predictable and stable, and away from the stocks & bond market, which has a history of being more volatile and less predictable.” Historically, real estate has been a strong and stable investment, performing as one of the best performing asset classes during the last five years.

The industry’s stability is due in part to investors already factoring in the global aspect of the market place. “This isn’t the first time something has happened over seas and we are affected over here,” Frankel says. “Liquidity is still rampant and people have priced into their thought that we are global and things happen. They sneeze over there and we say ‘bless you’.”

On the other hand, Mitchell Dudek, partner at Paul, Hastings, Janofsky & Walker LLP, believes the stock market’s dive has no implications on the real estate industry. “It really has no impact for the world, not at all because like I said companies are not relying on the stock market for their survival and their funding,” he tells GlobeSt.com.

Analysts from the National Association of Realtors agree. “I really don’t think one day is going to change anything,” NAR’s Scott MacIntosh says. “It is really just a blip.”

Source:

http://www.globest.com/news/853_853/newyork/158466-1.html