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Dot-Com Mania -- Get Real (Estate)?

PikeNet 2000 / Apr 5-7, 2000 / San Francisco

Will Click Marry Mortar? ... That's the gist of an article in Internet World (Nov 15, 1999). With their sky-high valuations, will web businesses buy brick-and-mortar firms? Could Yahoo buy Disney (market cap $93 billion versus $58 billion)? Could Amazon buy Macy's, which is owned by Federated ($36b versus $9b)? Could eToys buy Toys R Us ($8b versus 3.4b)? ... Hey, last Tuesday, the day before being added to the S&P 500, Yahoo's market capitalization went up $20 billion. Is this real money? Hmm.

Back to the real world. ... Last Wednesday I spoke on a panel in Seattle at CBA's Commercial Real Estate Insights breakfast along with Hamid Moghadam, CEO of AMB and three local developers. AMB is a REIT that specializes in HTD (high throughput distribution) facilities and invests in "hub" markets (those with big airports and seaports) near major population centers. Translation: "We don't invest in square states," Moghadam said (smiling).

The whole thrust of AMB is to help tenants move goods from manufacturers to consumers quickly -- just what e-retailers are seeking. And yet AMB and REIT stocks generally have been under pressure this year. In fact, Banc of America Securities recently reported that REITs have produced a negative total return of 7.6% so far in 1999, and REIT mutual funds have experienced an outflow this year of over $1 billion. ... OK, REITs probably aren't the best counter example to dot-com mania, but I'm wondering how long Internet companies will be valued differently than brick-and-mortar businesses? ... What do you think? Send e-mail to me .

PikeNet 2000... This year's conference features Pike's Picks -- 9 companies that will demonstrate their cutting edge products or services. If you've really been impressed by a new idea or a new company, send your suggestion to me at . I don't know if I'll be able to respond personally, but I'd love to hear your thoughts. ... PikeNet 2000, Apr 5-7, 2000, in San Francisco. Click the link at the top of the home page or www.pikenet.com/pikenet2000. ... Register now for the early-bird rate.

--Peter