Nareit's REIT Report Podcast

Three members of Citi’s global real estate research team—Nick Joseph in the United States, Aaron Guy in the U.K., and Howard Penny in Australia—joined the latest episode of the Nareit REIT Report podcast to share their thoughts on regional outlooks and sector performance.Macro fundamentals, interest rates, and geopolitical sentiment are mixed globally, resulting in stock preferences that are heavily driven by regional teams’ micro analysis, Joseph said.The key driver behind Citi’s list of most preferred stocks in 2025 is the presence of positive rental growth, with rental growth weakness and high valuation the key reasons for the least preferred subsectors. Sector preferences are not globally consistent, Joseph stressed, highlighting the presence of significant local supply and demand drivers.Regionally, Citi is most positive on the U.S., Australia, Europe, the Philippines, and Indonesia, and more cautious on China, Latin America, India, Japan, Singapore, Hong Kong, and Thailand.

Richard Barkham, chief economist at CBRE, shares valuable insights on the emerging real estate cycle expected in 2025. He forecasts GDP growth around 2.3% for this year, signaling lower vacancy rates and rising rental growth. Barkham highlights a positive investor sentiment driven by past inactivity and a strong economic outlook. He also discusses trends across various real estate sectors, noting the resilience of retail and multifamily spaces. The thriving data center market fueled by cloud computing presents new opportunities as American cities revitalize.

Abby McCarthy, Nareit’s senior vice president for investment affairs, joined the REIT Report podcast to discuss the value REITs can provide to an overall investment portfolio. “REITs offer investors a low cost, effective, and liquid means of investing in commercial real estate. As real estate stocks, they provide meaningful benefits to investment portfolios, which does include competitive long-term total returns, a strong portfolio diversification, and stable dividend income,” McCarthy said.Research shows that 78% of financial advisors recommend REITs to their clients, McCarthy said, with advisors appreciating their dividend income, diversification opportunities, strong risk-adjusted returns, and liquidity. 

Sher Hafeez, senior managing director of JLL’s M&A and corporate advisory group, was a guest on the latest episode of Nareit’s REIT Report podcast.Hafeez discussed how REITs are trading at a premium to net asset value, with certain sectors, including health care, data centers, and office accounting for the lion’s share of that premium.Many of these sectors are taking advantage of this cost of capital benefit and have issued equity to shore up capital to be on the offensive in 2025, Hafeez said. “I’d expect REITs to be pretty active acquirers compared to the last couple of years,” he added.

John Worth, Nareit executive vice president, research and investor outreach, was a guest on the latest episode of the REIT Report podcast. Worth discussed some of the key features of Nareit’s recently-published 2025 REIT Outlook.REITs have ready access to unsecured debt markets as well as the ability to issue equity, Worth said, which puts the sector in a strong position for 2025.Meanwhile, Nareit has identified four key megatrends that will continue to shape the global REIT landscape over the coming decade: specialization, scale, innovation, and sustainability. “All four of them are areas where REITs are really well poised and have real ability to execute,” Worth said.2025 REIT Outlook:https://www.reit.com/news/blog/market-commentary/finding-opportunities-reit-market-outlook-2025

In this episode of the REIT Report special series “Building to Zero,” Elena Alschuler, head of sustainability, Americas, LaSalle Investment Management, shares how the U.S. real estate industry has advanced the discussion on future planning for energy investments and reducing building-related carbon emissions.  Elena Alschuler, head of sustainability, Americas, LaSalle Investment Management, who recently served as the working group chair for the CRREM North America project, joinedthis final episode of the REIT Report special series focused on building on the real estate industry's journey to reduce emissions from the built-in environment to zero. She shares her experience in engaging the U.S. real estate community in a deep and thoughtful discussion around the CRREM Framework’s approach and methodology for measuring transition risk to institutional real estate portfolios.  Alschuler shares how “a couple of years ago, a lot of investors were starting to look at these CRREM curves, and we liked the idea of having forward-looking targets to benchmark against in terms of planning energy and carbon performance. But when we started looking at portfolios against this particular set of curves, many of us were getting crazy results. So, twelve [U.S. and Canadian] real estate companies, including LaSalle, decided to co-fund a ULI working group, which was supported by the CRREM team in Europe, to do industry engagement and Larence Berkely National Labs (LBNL) to do the technical work.”

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.

Doug Weill, managing partner at Hodes Weill and Associates, was a guest on the latest episode of the Nareit REIT Report.Hodes Weill recently released its 2024 Real Estate Allocations Monitor which showed that about 39% of institutions actively allocated capital to REITs in 2023, compared with 36% the prior year. Sovereign wealth funds were “meaningfully more active,” Weill said. “I think this is an ongoing trend where institutions are increasingly active out of their real estate allocations in REITs. And REITs are increasingly a complement to private market investments.”About 67% of institutions indicated that liquidity is one of the key reasons why they invest in REITs, which was up from about 46% the prior year.

Andrew Alperstein, real estate partner at PwC, was a guest on the latest episode of Nareit’s REIT Report podcast. Alperstein said a key theme from the PwC/Urban Land Institute Emerging Trends in Real Estate® 2025 report is that commercial real estate is at the outset of a new cycle, one that is likely to result in increased activity and improved momentum in the year ahead.“We were pleasantly surprised and pleased to see an improvement in sentiment as we looked at our 2025 publication relative to 2024 and 2023,” Alperstein said, “particularly given we've had a challenging couple of years with higher interest rates and really a lack of transaction activity.”Alperstein added that the interest rate environment forms “a very important piece of the momentum that we hope to see going into next year.”

In this episode of the REIT Report special series “Building to Zero,” Duane Desiderio, senior vice president at the Real Estate Roundtable (RER) shares a recently released 20-point policy guide which outlines lessons learned from the building owner perspective over the past seven years since the first building performance standard was implemented in 2017. Since Local Law 97 was passed by the City Council in New York City as part of the Climate Mobilization Act in April 2019, commercial building owners in the United States have experienced the rise in regulations know as Building Performance Standards (BPS), which are intended to regulate the use of energy in existing buildings. Buildings owners are currently navigating a patchwork of law with various rules, processes, and compliance pathways in cities and states across the county.“A good way to start the conversation is by drawing a bit of a contrast to the climate and energy policies on buildings that we've seen come from the federal level, where the emphasis has been on carrots not sticks, incentives to encourage buildings to push the envelope to reduce emissions to become more efficient. At the state and local level unlike the federal level, these BEPS laws would impose mandatory limits on buildings to either reduce their energy by certain amounts every year or to reduce their carbon emissions every year or in some cases both.”