"If you think the housing bust is bad, wait until you see the blow-up in commercial real estate." Remember those stories? I don't believe the people who wrote them do, or there would at least be some touch of irony to stories with headlines such as "Vornado Results Suggest Commercial Sector on Rebound" in Wednesday's Wall Street Journal.

 

Of course, the rebound is so old that it really isn't news anymore. We know this was only about the third great quarter from Vornado (VNO). We also saw terrific numbers from competitors Boston Properties (BXP) and SL Green Realty (SLG).

 

It's not just about office space. We have seen endless positive quarters from Federal Realty Investment Trust (FRT), Simon Property (SPG) and Tanger Factory Outlet (SKT). As bad as the overbuild in office real estate had been, the retail REITs were supposed to be vast wastelands. But when the No. 1 mall developer, the No. 1 shopping center developer and the No. 1 outlet developer are all getting rate raises and are almost all fully leased, that bearish call really smarts.

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All of these companies, and so many others in the sector, were able to refinance, courtesy of the Federal Reserve. They all came out of this period stronger, and they are all willing to bid on vacant properties that are still any good. You are not going to see bids for noneconomic real estate, but there's not much of that around, given that there is very little new construction.

 

Here, the cycle worked. You'll periodically hear noncurated, unedited remarks that there are still problems, but the fact is that disaster was averted. Why doesn't this matter? Why doesn't it make things better? The answer is, of course, it does if you owned shares of these companies, which were brought down hard by the pessimism.

 

In short, the stories of the death of commercial real estate have been just plain wrong.

 

Oh, and speaking of real irony, have a look at the original tag of that Journal piece mentioned earlier: "But with Vornado's stock up 24% since the beginning of the year, some analysts and investors said this may be as good as it gets for now."

 

Well, thanks a lot. The analysts keep you out at the bottom, and now they tell you it is too late at the top. As for investors, if they say the stocks are peaking, then what the heck are they doing still being investors? Substitute the word "sellers" and you have a more honest coda.

 

At the time of publication, Cramer had no positions in stocks mentioned.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Click here to follow Cramer's trades for his Charitable Trust.

 

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