Understanding the Public-Private Real Estate Valuation Gap

Cedrik Lachance, director of research at Green Street, was a guest on the latest episode of Nareit’s REIT Report podcast. He discussed key priorities for the REIT sector, opportunities for growth, valuation levels, IPO prospects, trends in Europe, and more.

Lachance said that with the REIT market bestowing “pretty meaningful premiums in some sectors, we expect to see a fairly aggressive deployment of capital” from companies in the data center and health care sectors, self-storage, and to some extent retail. He added that there are also companies in the office sector trading at premiums to NAV and “that's going to influence how they allocate capital.”

Green Street sees the strongest rent growth potential in data centers. “That story has been well told, but it remains an area where we think there's meaningful upside,” Lachance said.