The economic crisis has created a survival-of-the-fittest environment for US real-estate investment trusts.

With many REITs trading at distressed levels amid a continuing credit crunch, experts say the stage is being set for merger-and-acquisition plays, with stronger companies taking over weaker rivals.

'I do think that M&A activity will begin to accelerate this year,' particularly if interest rates stay low, said Jay Leupp, a portfolio manager for Grubb & Ellis AGA Realty Income Fund.

In a sign that a cycle of consolidation may be afoot, shopping center REIT Ramco-Gershenson Properties Trust announced late last month that it 'received indications of interest' from third parties, including Equity One Inc. The companies are trading around $9 and $14 a share, respectively.

Wall Street Journal