The cost to shareholders was high: SL Green chopped its quarterly dividend by 73%, to 10 cents per share. That was on top of a 52% cut at the end of 2008, according to analyst Todd Lukasik of Denver-based Morningstar.

Other REITs, like Brookfield Property Corp. (NYSE: BPO), are preserving precious cash by offering shareholders the opportunity to acquire additional common shares by reinvesting their dividends in lieu of cash payment.

Stick with the winners

The overarching advice to office investors is simple but worth repeating. “Be cautious: Get in with the right REIT, pick somebody with a good balance sheet and a good, safe dividend,” advises Pire of Heitman. “An earnings growth story is not a reason to do it because that's probably not going to occur.”

Which REITs are head and shoulders above the rest? Boston Properties, Douglas Emmett, Vornado Realty Trust, Mack-Cali Realty Corp., Duke Realty Corp., Highwoods Properties, Liberty Property Trust and Corporate Office Properties Trust are all members of the “good camp” of office REITs, according to David AuBuchon, senior research analyst with Robert W. Baird & Co.

“Those are the companies that have the appropriate capital structures, that are not going to run into issues with refinancing their business and the debt that comes due,” he says.

And finally, AuBuchon advises there's no greater commodity in the current downturn than patience. “That's what investors are going to need because it's going to be awhile before we see positive fundamentals.”

Sibley Fleming is managing editor.

Office REITs Rush to Market With Equity Offerings

As the economic tide has continued to roll out in 2009 laying bare the heavy leverage of office REITs, the sector has fought back with a historic wave of stock offerings to bolster their liquidity. Experts say these office companies will continue to focus on deleveraging to meet near-term debt maturities.