Not really a single reason, but the rebound was largely due to a sense that the sector may have been oversold.
REITs do look historically cheap, but could well stay that way for some time. Many face refinancing issues, debt covenant problems and forecasted sliding rental levels. Asset values are expected to fall in most locations throughout 2009.
That said, these concerns have been factored in to current pricing somewhat. No doubt in relation to a number of REITs, today's pricing will look pretty good in the long term, but they generally have a lot of hurdles to jump in the interim. If you are going to take a punt, look at stronger balance sheets - a good cash position, plenty of headroom in debt covenants and the refinancing potential 36 months and in.
Problem with buying the index at this time is that quite a number of REITs could well topple over.
