FBR on Reits UDR (NYSE:UDR), Associated Estates (NYSE:AEC), Equity Lifestyle (NYSE:ELS), Public Storage (NYSE:PSA), Sovran Self Storage (NYSE:SSS) if

UDR (NYSE:UDR), Associated Estates (NYSE:AEC), Equity Lifestyle (NYSE:ELS), Public Storage (NYSE:PSA) and Sovran Self Storage (NYSE:SSS) were analyzed by FBR as to the effect an increase in interest rates would have on the REITs.

FBR concluded, "In recent years, REIT earnings have been goosed by the low rate environment, as companies helped themselves to healthy servings of floating-rate debt. What happens to earnings if rates rise, without any extra growth, other than what is already cooked into 2011 estimates? We ran a simple screen on the short-lease universe (apartments, student and manufactured housing, and self storage). We excluded any debt that is swapped, but included any debt that is capped, and assumed no refi activity (the latter assumption being somewhat unlikely). For some companies there could be downside to current 2011 FFO estimates; for others there is minimal risk. Below, we highlight the most and least impacted REITs, based on a 100 basis point increase in underlying rates. See page
two for a full ranking."

The following companies could see the biggest percentage decline to our forecasted 2011 FFO per share estimates in the test scenario: UDR (Market Perform) and Associated Estates Realty Corp. (Outperform, –4.1%)

The following companies could see the smallest percentage decline to our forecasted 2011 FFO per share estimates in the test scenario: Equity Lifestyle Properties (Market Perform), Public Storage (Underperform, 0%), and Sovran Self Storage (Outperform).