HAUZ - State Of REIT Nation: Waiting At The Bottom
2024-06-10 09:00:00 ET
Summary
- REITweek, the annual REIT industry conference, was held last week in New York City. Humbled by two years of rate-driven headwinds, the venue halls were as quiet as any REITweek.
- Excitement was muted after numerous "false starts" on the long-awaited Fed pivot, a dearth of IPO and M&A activity, and a two-year period of significant underperformance versus the broader market.
- It can only get better: since the start of the Fed's rate hike cycle in March 2022, the REIT Index has underperformed the S&P 500 by a whopping 40 percentage-points.
- Tempered optimism was the prevailing sentiment among REIT executives. Most discussed steady-to-strong property-level fundamentals, but also an uptick in debt-driven distress among some of their private market peers.
- "Delay and pray" has remained the strategy for many highly-levered property owners amid a dearth of buying interest and limited capital availability. Public REITs have opted to remain on the sidelines, but we expect opportunities to emerge as private markets bottom-out.
State of the REIT Nation
In our State of the REIT Nation , we analyze the recently-released NAREIT T-Tracker data. Earlier this month, we published our REIT Earnings Recap which analyzed Q1 results on a company-by-company level, but this report will focus on higher-level macro themes affecting the REIT sector at large....
State Of REIT Nation: Waiting At The Bottom