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.