REITs, or real estate investment trusts, and their related exchange traded funds (ETFs) have long been eyed as the “next shoe to drop.” So far, though, that shoe is still up in the air. Is it still primed for a fall?

As early as 2008, stories were warning that the commercial real estate market would fall through the floor and that hundreds of billions of dollars of commercial mortgages would default, says Michael Kahn for Barron’s.

Recently, just the opposite has occurred. Commercial real estate investment trusts (REITs) have been soaring over the past few weeks, and the technical indicators have looked prime.

Kahn says that commercial REITs not only rose, but also outperformed the market the during the current summer rally. The sector halted its decline around November 2008, although it did hit a lower low in March, but not by much.

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