In a video interview with REIT.com at REITWorld 2011: NAREIT's Annual Convention For All Things REIT in Dallas at the Hilton Anatole hotel, Leupp offered his insight on the state of play for REITs in the current market.
"In the real estate market right now, we're probably in the early to middle innings of a recovery that started probably 18 months ago," he said.
Although the apartment and self storage sectors have led the recovery, Leupp said he believes some of the sectors that have been muddling along, such as retail and office, will eventually follow.
In terms of challenges, Leupp noted that global volatility continues to impact the REIT market.
"The news, particularly out of Europe right now, is affecting the daily movement in share prices," he said. "We all know that real estate investment trust share prices over the long term behave like the underlying commercial real estate that they own. But in the very short term, like other publicly traded securities, they're subject to the short-term movements in the market."
Leupp said one advantage available to REITs in the current market is their access to liquidity. REITs' ability to tap the equity markets proved to be their "saving grace" during the Great Financial Crisis, according to Leupp. After shoring up their balance sheets, Leupp said, REITs have been able to acquire capital from both the debt and preferred markets at "attractive" rates.
"We think that trend will continue," Leupp said. "Periodically, the equity markets will open and close as they always do. But over the very long term, we believe that the REIT equity markets will remain open and that REITs will continue to be the premium borrowers in the commercial real estate sector."