RIET Hoya Capital High Dividend Yield ETF.png
HOMZ_Logo_Just Ticker.png
  • Alex Pettee, CFA

Net Lease REITs: Analyzing Inflation Risk

  • Despite a wave of dividend hikes and robust external growth, net lease REITs have been among the weakest-performing property sectors this year amid concerns over soaring inflation and rising interest rates.

  • Despite their reputation as bond substitutes, net lease REITs have historically delivered above-average earnings growth as accretive external growth has more than offset the drag from muted property-level growth.

  • Thriving in the "lower for longer" macroeconomic environment that defined the 2010s, the new regime of higher inflation rates has raised questions about these REITs' ability to continue to outperform.

  • We’ve developed additional metrics to measure the inflation-hedging characteristics and potential risks. Since net lease REITs are among the more bond-like sectors, the need for diversification becomes especially important.

  • Net lease REITs are currently firing on all cylinders, taking full advantage of cheap capital to fuel a "buying spree" of property acquisitions. We see recent underperformance as a buying opportunity, particularly for net lease REITs that provide better inflation protection.

Click Here To Read The Full Report on Seeking Alpha!

high yield REIT investing hoya capital logo.png

Hoya Capital Research & Index Innovations is an affiliated index provider and research firm that builds custom indexes tracking U.S. commercial and residential real estate sectors, including indexes tracked by exchange-traded funds (ETFs). 

Hoya Capital Research & Index Innovations