I have been bearish on various REITs for quite some time. The key reason is the amount of leveraged they have.
Surely, in this economic climate, financial institutions will be cutting back and reducing their lending exposures
With this in mind, highly leveraged REITs will faced significant challenges in raising funds to finance their borrowings.
For more in depth reads on such issue, try searching for Morningstar, Seeking Alpha and of course, Stripnomics.com via Google.
One of a possible short position which I have attempted is on Â ARE.
From a technical analysis point of view, ARE Â has just broke its long term support at around $32.
You can look at the chart here. For the past few sell down, it was able to hold at that level. But, last few trading days sees the support being broken and till Friday, it did not manage to clear that level.
Will this be the beginning of Â a major slide for ARE?
Take a look at the chart:
Look at the volume that is associated with that price level. History suggest that there’s volume supporting it at around $32 range.
But, a further break down will suggest that this price level will not hold.