unencumbered assets, page-31

There are a few REIT's with 25-35% gearing and they have not suffered the extent of market cap collapse as the higher geared ones. Eg CFX at 25% gearing.

Then again, IOF only has 35% LT gearing, and that got smashed.

I tend to stay away from the low geared REIT's as their shares seem to offer less chance of capital gain on an index rebound. (Look at CFX's recent performance as an example)

Most of my cash is in 35-56% geared REIT's, the latter where there is progress being made on asset sales. RNY is probably one of my highest geared and highest risk REIT positions at almost 62% gearing, and I only took the position due to my perception of 'room to move' on the refinancing by offering unencumbered properties for refinancing. The most important measure is ICR, as a 60% geared REIT with an ICR of 3x has a better chance of survival than one 60% gearing and only 2x ICR.

If the asset markets have not already/do not bottom in the next few months, then yes, the higher geared REITs are going to be in strife if property prices fall further. Covenant breaches could allow banks to seize almost all the publicly listed commercial property. This would in turn result in a much lengthier recession as asset firesales trigger further asset falls and seizures. As many international banks have been nationalized, this could be the great nationalization of the global economy that would set free market democracies back 100 years.

And who do we have to thank? The CB's for the FIRST EVER GLOBALLY CO-ORDINATED interest rate hikes which triggered the deflationary collapse, which ironically, has led to calls for further globally co-ordinated economic measures.

The free market was still born decades ago.
The politicians oblivious to this fact as the global economy stands on crumbling clay socialist feet; they roll out socialist measure after socialist measure, economic edict after economic edict, government intervention after government intervention, tax after tax.