Some firms benefit from real estate carnage - Milwaukee Journal Sentinel

The sector has been among the hardest hit in terms of job loss, and there's not a lot of good news on the near-term horizon. An oversupply of existing Homes for Sale - many of them foreclosed properties - has contributed to a drop in construction of new homes this year. Analysts say permits for new construction won't go up until unemployment goes down. Some companies, however, are poised to benefit from the new landscape, said Ryan Erickson, chief investment officer at Holt-Smith Advisors Inc. They have their financial houses in order and are benefiting from lower interest rates, he said. Customers have seen their flow of construction projects slow, and banks aren't as willing to lend them money for big-ticket equipment, Erickson said. The company is better positioned than most to serve bigger customers because it is reliable and can move equipment among its many sites around the country, he added. The biggest risk here is that construction spending doesn't recover. In fact, slow construction growth might be the best-case scenario for United Rentals, because rapid growth might spur customers to buy their own equipment, he said. Another risk is the possibility of a competitor running into problems that drove it to liquidate its equipment at low prices. The company's shares have dropped because of Europe's economic troubles, but investors' fears may be overblown, Erickson said. With 75% of its demand coming from business travelers, Starwood doesn't have to rely as much as some competitors on more finicky leisure travelers. There were very few hotel rooms added during the downturn in the last few years, so Starwood and others should be able to raise rates and grow their revenue per room, he said. The biggest risks here are that financial problems will continue in Europe, where Starwood has 12% of its rooms, and that continuing uncertainty in the U. But the company has been beating expectations so far, he said. Login or Register to manage all your newsletter preferences. Interactive QuizTest your knowledge of pregnancy and prenatal care Tap SnapsHave you been tapped. Homes for Sale