REIT Rejuvination on Solid Footing in 2019
- Patience is a virtue for REIT investors. After three years of stumbling stock price performance, REITs have surged out of the gate in 2019, boosted by receding interest rates.
- The REIT rejuvenation appears to be on solid footing from a fundamental perspective, as valuations remain reasonable. REIT metrics bottomed in 2017 and gradually improved through 2018.
- After the nearly 20% jump, REITs are no longer trading at an NAV discount, but that’s a welcome relief. The acquisition pipeline could re-open this year as a result.
- Faced with a challenging acquisition environment, REITs have focused more on new development. REITs have become some of the most active builders in the real estate industry.
- REIT balance sheets are as solid as ever, calling into question the warranted degree of interest rate sensitivity. We analyze REIT fundamental data from the recently released NAREIT T-Tracker data.