Reports of the death of the real estate market have been greatly exaggerated. At least, that’s the belief of asset manager Cohen & Steers, which feels there’s a strong case to be made for the global commercial real estate market and the time to strike may be now.

“Real estate was at the center of the crisis over the past few years, and a lot of investors felt a lot of pain,” says Tony Ialeggio, senior vice president and director of global marketing at Cohen & Steers, the index provider behind the Cohen & Steers Global Realty Majors (NYSEArca: GRI).

But to paint all real estate with the same broad brush would be a mistake.

“The commercial real estate space has come back much more quickly and much more strongly than residential, which still faces significant challenges,” he says.

REITs in 2009 and 2010 outperformed the broad stock markets, something Cohen & Steers points out isn’t widely known or understood.

If you missed that rally, however, don’t fret: Cohen & Steers is finding that the environment for REITs to continue to perform well is right, and the best way to approach the sector right now is to take a global approach.

REITs have traditionally been viewed as a more U.S. sector, “but they’ve been adopted around the world,” Ialeggio says. “It’s a global sector now.”

While U.S. REITs have held their own in the last few years, there are even greater opportunities in places like Asia, Latin America and some European markets.

Ialeggio says that’s because the stocks on those markets may be more undervalued than they are in the United States, and that, combined with strong economic growth in those areas could be an even greater opportunity for investors.

Real Estate and the Economic Recovery

REITs haven’t fully recovered from the downturn. There are still vacancies in smaller cities around the country. But in major metropolitan areas like Manhattan, Washington, D.C., Chicago and San Francisco, rents and occupancies are approaching pre-crisis levels.

“Places are still struggling, but it’s not the trophy properties that a typical successful REIT would own,” Ialeggio points out.

One area of particular strength that Cohen & Steers has seen is in properties with short lease durations, such as hotels, apartments and self storage.

Business travel is coming back, and hotels are able to capitalize on the increased demand and raise prices accordingly. Apartments are desirable for both those who can’t afford homes as well as young people working to establish themselves in their careers.

“As their job prospects improve, they’re more likely to rent than buy a home in the current environment,” Ialeggio says.

The death of the consumer has been overblown, as well, evidenced by the performance of Simon, an operator of malls across the country.

The key, according to the Cohen & Steers approach, is to have the right names in the index.

“Market leaders who are doing well are driving the overall sector returns that we’ve seen.”

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