Navigating the Real Estate Market: A Deep Dive into REITs and Market Trends

The dark cloud hanging over the US real estate market may be casting an even longer shadow on REITs, or real estate investment trusts. The Federal Reserve’s sentiment on keeping interest rates higher for longer has prolonged elevated mortgage rates, which have run rampant and impaired Americans’ ability to buy or own a home.

Janus Henderson Investors Global Real Estate Portfolio Manager Gregory Kuhl and Haendel St. Juste, Mizuho Senior Equity Research Analyst for REITs and Homebuilders, recently sat down with Yahoo Finance’s Market Domination to discuss the impact of the Fed’s monetary policy on REITs and the broader real estate industry.

Kuhl expressed optimism, stating, “Assuming we are done in terms of Fed rate hikes and higher rates, listed REITs today are priced for the interest rate environment that we have, which means they can do well. It’s not an issue of fundamentals, it’s purely an issue of valuation, which we think we’re getting towards the end of.”

St. Juste added to the conversation by pointing out sectors within the real estate industry that show promise, such as apartments, healthcare, data centers, and stocks with pricing power and better-than-average earnings growth.

Both experts highlighted specific areas in the market that they find attractive, including specialty property types like self-storage REITs, healthcare REITs due to demographic trends, and even malls at the right price. They also discussed the potential for a multi-year recovery in the multifamily sector, emphasizing that the sector could benefit from job growth and affordability issues in the single-family housing market.

Furthermore, Kuhl and St. Juste touched on international opportunities in the real estate sector, noting potential in Europe and Asia, where there are interesting valuation opportunities and high-quality growth prospects.

Overall, the discussion shed light on the complexities and opportunities within the REIT market, providing valuable insights for investors navigating the current landscape. For more expert insights and the latest market action, viewers can watch the full episode of Market Domination on Yahoo Finance.
This news story was written by Luke Carberry Mogan.