Reflecting on how the pandemic has impacted US real estate investments this past year, global index provider FTSE Russell and Nareit hosted a virtual panel to better understand today’s listed real estate market and what may lie ahead as the industry adjusts to the short and potentially longer term impacts of COVID-19.
Recent data from FTSE Russell shows the index performance since December 31, 2019, with an uptick in October 2020.
Highlighting the macro outlook, experts from LaSalle Investment Management, Brookfield Asset Management and Nareit discussed various topics, including investors’ view of exposure to traditional REITs and “newer” ones (noting whether it influences public vs. private considerations), ESG integration and how the phenomenon of remote work impacts commercial real estate demand.
Key takeaways from the session included:
Bernhard Krieg, Portfolio Manager, Brookfield Asset Management:
“Investing in real estate securities can be an attractive sector going forward, not only for the short-term dislocation but also because we're starting a new cycle, lending itself to tremendous opportunity. Real estate more broadly, but also real estate securities, is driven by long and steady upcycles. We’re seeing rents grow, occupancies increase, and eventually more supply will level things off.”
Calvin Schnure, SVP, Research & Economic Analysis, Nareit:
“I don’t foresee risk of inflation. Rather, we’re likely to see continued low interest rates which are very favorable for commercial real estate. As expected, the macro fundamentals are improving which will further drive demand over the next 12 months.”
Lisa Kaufman, CEO, LaSalle Investment Management:
“There’s been a trend in both private and public real estate markets for investors looking for exposure outside the four major sectors of Office, Retail, Multifamily and Industrial. We’re seeing growing interest in niche sectors like cell towers, data centers, storage and healthcare, as a lot of these specialty sectors have delivered better and more resilient growth through the last cycle. Many of those sectors have acyclical or sometimes even countercyclical demand drivers which provides good diversification for investors and allows them to play some of the secular shifts happening.”
A full replay of the webinar, US listed real estate 2021: A year post COVID, is available on FTSE Russell’s BrightTALK channel. Information on the FTSE Nareit US Real Estate Index Series and FTSE EPRA Nareit Global Real Estate Indexes, with over $341 billion assets benchmarked to both, can be found on FTSE Russell’s website.
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