MARKETING: Forgiving Partners

INVESTMENT

An ancient financial adage holds that businessmen with mountainous debts do not merely have creditors: they have partners with a high stake in their survival. Rarely has the truth of the saying been better proved than by the current troubles of the nation's real estate investment trusts. A glittering investment innovation of the 1960s, REITS enjoyed congressionally mandated tax breaks similar to those of mutual funds. They collected money from various sources—bank loans, sales of stock to the general public—then made loans to builders to finance the construction of condominiums, motels, office buildings, even single-family homes. But two years...

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