Nareit's REIT Report Podcast
Episode 432: REIT Premiums Could Spark Vigorous Deployment of Capital in Some Sectors: Green Street
Dec 12, 2024
Cedrik Lachance, Director of Research at Green Street, dives into the dynamic world of REITs and commercial real estate. He discusses the promising capital deployment opportunities in sectors such as data centers, healthcare, and self-storage, driven by recent market premiums. Lachance highlights the strong rent growth potential in data centers while noting that the office sector may also see a resurgence. He explores the impact of public-private valuation gaps and investment trends in both the U.S. and Europe, revealing unique challenges and opportunities.
13:23
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Quick takeaways
- REITs are expected to aggressively deploy capital in sectors with premium valuations, particularly data centers and healthcare, driving growth.
- Rent growth is anticipated to remain strong in sectors like data centers and retail, supported by positive economic fundamentals and occupancy rates.
Deep dives
Positive Economic Environment for REITs
The operating environment for U.S.-listed REITs is expected to remain generally positive, with projected GDP growth around 2% for the coming year. Job creation is anticipated to be moderate, with monthly estimates of 100,000 to 150,000 positions. Additionally, there are signs of increasing disposable income, which is likely to benefit sectors of high-quality real estate that REITs typically own. The pent-up demand for spending and investment could further enhance the performance of these properties.
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