Can real estate investment trusts continue to pay such hefty dividends?
Companies, by and large, have continued to make distributions. Coverage became tighter in the downturn, but because companies had positioned themselves well, they were in a good position even as fundamentals weakened. We hope that the recovery in fundamentals will strengthen the coverage of those distributions, which historically have been the majority of return to real estate investors. We think of real estate as a sector where you get paid generously to wait. Q: What kinds of real estate investments do you like right now? A: I don’t like to talk about specific companies, but we like the commercial mainstream real estate sectors, including apartments, offices, and retail in the form of malls and shopping centers. We also like lodging. These sectors compose the majority of the portfolio. The good news is that supply has been in relatively good shape. There’s a lack of overbuilding, and the larger issue of late has been anemic demand as a function of the weaker economy. There’s a silver
