Investing Experts REITs are boring and boring is good
Nov 20, 2025
In this engaging discussion, David Auerbach, Chief Investment Officer at Hoya Capital and an expert in REITs and ETFs, shares insights on the evolving landscape of real estate investment. He tackles the recent underperformance of REITs, debunks myths about interest rate sensitivity, and highlights the importance of dividends. David emphasizes the resilience of grocery-anchored retail and examines the complexities of office REITs. He also reveals the potential of Hoya Capital's innovative ETFs and the often misunderstood, yet stable, nature of REITs as reliable income generators.
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Deep Selloff Masks Strong Fundamentals
- REITs sold off ~70% vs. the S&P since 2022 but fundamentals remain solid across most issuers.
- Look for value in small- and mid-cap REITs that fly under the radar and offer higher yields.
Rates Are Not The Whole Story
- REITs aren't inherently interest-rate sensitive; tenant demand and property cash flows drive outcomes.
- As fed cuts lower Treasury yields, REIT dividend spreads versus fixed income should widen favorably.
Vet Dividend Sustainability
- Check earnings coverage and payout ratios before trusting a REIT dividend; most earnings comfortably cover dividends today.
- Prefer REITs that retain capital wisely rather than stretching to raise distributions prematurely.