REITs Post Strong Results in February; Analysts Divided on Outlook

REIT returns were strong in February, following the broader market for the month.

David Rodgers, a senior analyst at Robert W. Baird & Co., told REIT.com that “we generally saw that real estate credit spreads were flat and the 10-year came down for much of the month. That gave people some confidence.”

 

But analysts are divided on the outlook for investors in the near term.

 

“Going forward, investors have increasing confidence in the underlying conditions that create strong growth in earnings, especially in the real estate market,” Brad Case, senior vice president for research and industry information at NAREIT, said on REIT.com.

 

Daniel Donlan of Ladenburg Thalmann & Co., Inc. was cautious, telling REIT.com he sees rising interest rates and “maturity of the real estate cycle” as factors to temper enthusiasm for investors.

 

“We’re too far along in the real estate cycle to see rent growth,” Donlan said. In addition, high occupancy rates leave little room for growth.