REK - 2 Years Of Gloom Have Done Interesting Things To REIT Valuation

2024-04-30 04:18:15 ET

Summary

• REITs experienced a 26% drop in prices due to rising interest rates, creating opportunities for investors.
• Despite the overall decline, many REIT sectors, such as industrial, multifamily, and manufactured housing, showed strong FFO/share growth.
• The market pricing of REITs did not align with their fundamental performance, creating mispricing in sectors like retail, towers, and self-storage.

This week marks the 2-year anniversary of when the cloud of gloom emerged over REITs. REITs peaked in April of 2022 as rental income surged in the post-pandemic recovery, but the fundamentals were soon overshadowed by rising interest rates, which scared the market away from the sector as prices dropped by 26% to where they are today....

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