Morgan Stanley Is Bullish On Office REITs


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Despite the fact that the stocks of large office real estate investment trusts (REITs) have more than doubled in the past five years, analysts at Morgan Stanley believe that there is still opportunity to profit from high-quality U.S. office space. In a recent report, analysts give several reasons why they believe that the office REIT party is far from over.

Real Estate As An Investment Class

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Analysts see evidence that investing in real estate is becoming more popular as a means of diversification. A recent Cornell University study indicated that institutions such as insurance companies, public pensions and family offices are under-invested in real estate by about $70 billion based on their specified target allocations. The report indicates that prime office buildings will likely remain a popular investment target for these institutions.

Deep Pockets

According to the report, there has never been more cash available to private investors willing to invest in real estate. Funds now have over $100 billion of “dry powder” available to invest, significantly more than during the previous market peak in 2007.

International Funds Want To Buy American

Foreign funds invested more than $10 billion in central business district office buildings in the first three quarters of 2014, more than 70 percent more than they did during the same period in 2013. Analysts believe American office space will remain a target of foreign investors in coming years.

Improving Market Fundamentals

Bidding from the private sectors on prime office real estate in large cities has driven office REITs to outperform smaller peers in the past several years. Morgan Stanley analyst Vance H. Edelson believes that trend will continue due to the taste of the millennial generation. “This generation wants to work, live and play in major cities, with limited interest in owning a home or working in the suburbs.”


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Analyst ColorLong IdeasREITAnalyst RatingsTrading IdeasGeneralReal EstateMorgan StanleyVance H. Edelson