LMRK - REITs Aren't Cheap Anymore

• REITs recorded a sequential improvement across all critical metrics in Q1, powering a historic wave of dividend growth in early 2021. However, several harder-hit property sectors are far from fully-recovered.
• The Great Financial Crisis resulted in long-term, lasting pain for the real estate sector, but "this time was different" for most REITs due to harsh lessons learned from past crises.
• Equity REITs have fully-recovered their pandemic declines. REITs' strong balance sheets and access-to-capital prevented the type of shareholder dilution that resulted in a "lost decade" for REITs from the GFC.
• REITs are no longer "cheap," but that may be a good thing. Premium valuations in the public markets have revived the "animal spirits." We've seen a wave of M&A and private-to-public acquisitions in early 2021.
• In our quarterly "State of the REIT Sector" report, we analyze the recently-released NAREIT T-Tracker data to review high-level REIT fundamentals over the past quarter through a series of charts.

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