Nareit's REIT Report Podcast

Nicole Funari, Nareit vice president for research, was a guest on the latest episode of the Nareit REIT Report.Funari discussed Nareit’s new project that initially involves tracking quarterly investment holdings for the 28 largest actively managed real estate investment funds that focus on REITs from 2010 to the first quarter of 2023.While performance returns offer a broad market perspective on what investors think about REITs, by narrowing the focus to active managers, or “people whose income and livelihoods depends on how well they can read the market for commercial real estate, we really get to capitalize on their unique insights and their expertise in this area,” Funari said.

Nareit Senior Vice President for Research Ed Pierzak joined the latest episode of the REIT Report podcast to talk about some of the key findings from Nareit’s 2023 mid-year report.Pierzak noted that two main factors are at play today—the divergence in public and private real estate valuations, and challenges in the capital markets, particularly around refinancing.The public-private valuation gap really reached its peak in the latter half of 2022, Pierzak said. Progress has been made since then, albeit slowly, he noted. However, whenever such valuation dislocations occur, “they can present opportunities for REIT investors…historically, when we’ve seen these major public and private valuation divergences, we see that REIT total returns have tended to bounce and even surge.”

Gene Rubin, president of management consultancy firm Rivel, joined the latest episode of Nareit’s REIT Report podcast to talk about strategic investor communications and investor engagement in the REIT space.Rivel recently carried out a generalist investor perception study on the REIT industry and Rubin discussed some of the findings that emerged. He noted that the outlook for REITs as an investment class in North America has “improved significantly” since a similar survey was undertaken in 2018. In the previous survey, over half of respondents said they were underweight in REITs, compared to about 40% this time.

Darin Turner, managing director and chief investment officer for Invesco’s listed real assets team, was a guest on the latest edition of the Nareit REIT Report podcast.Turner discussed the scope and growth of the tower REIT industry, its performance history, how the leasing structure works, the impact of 5G, global opportunities and challenges, benefits for the sector from AI and edge computing, and more.Key Takeaways from the interview include:There are approximately 420,000 macro tower and small cell sites across the United States, with REITs owing about 90% of the approximately 150,000 macro tower sites.There hasn’t been any significant new development of macro tower sites in the last decade. New supply is “incredibly limited.”Most of the recent growth for tower REITs has been in international markets, in both emerging and developed markets.

Tim Bodner, global and U.S. real estate deals leader at PwC, was a guest on the latest episode of the REIT Report podcast.Bodner commented on the current state of real estate transaction activity, how different property segments are faring, opportunities amid today’s challenging environment, strategies being used to get deals done, and more.During the interview, Bodner noted that:It’s a “much more challenging” deal environment today than it was previously.Pockets of strength are emerging across the real estate landscape, including logistics, self-storage, areas of the hospitality sector, experiential real estate, and even office.The most important factor in terms of getting deals done today is the stability of the underlying trends that are driving activity in a particular sector.

Julie Whelan, global head of occupier research at CBRE, was a guest on the latest episode of the Nareit REIT Report podcast.During the interview, Whelan discussed broad office occupancy trends, changes in how office space is utilized, the flight to quality, the role of flexible office space, the importance of an office’s location, and more.Among Whelan’s key takeaways were:Net effective rents, that account for landlord concessions, are continuing to grow at the top tier of the office market.In some cases, the rent differential between top quality and lower quality office space has never been greater.A great office building alone isn’t enough. “Buildings have to be in great submarkets right now,” and that means mixed-use environments.“The office has a really exciting role to play in the future of how cities are reinvented.” Office space is going to be in a transformative phase as it plays a key role in the evolution of mixed-use locations.

Nina Galbiati, Norges Bank’s global lead sustainability for real estate, was a guest on a special episode of Nareit’s REIT Report podcast.Norges Bank is a long-term investor that has roughly 4.1% of their global investment portfolio invested in real estate, with about half of that allocated to public REITs. With the firm’s focus on maximizing risk-adjusted returns, Norges has been an influential leader in promoting the adoption of sustainability for real estate companies globally for many years.On this episode of the REIT Report, Galbiati joined Nareit’s Senior Vice President of Environmental Stewardship and Sustainability Jessica Long to discuss how the real estate industry is addressing a key challenge of decarbonization planning and the importance of real estate companies in the U.S. clearly disclosing their strategy, decision making, and targets around key environmental matters.“Real estate is facing tremendous pressure to decarbonize. This is partly regulatory pressure, but it’s definitely coming from a shift in demand from tenants as well as investors. We don’t think the current market valuation is pricing those risks adequately today,” Galbiati said.

David Stafford, deputy chief investment officer at The City of Austin Employees' Retirement System (COAERS), was a guest on the latest episode of Nareit’s REIT Report Podcast.During the interview, Stafford discussed COAERS’ decision to use REITs as part of a portfolio completion strategy starting in early 2020—an approach that has been successful for the fund and one that it continues to assess on an ongoing basis. He also spoke about the importance of having a mindset attuned to trying a new investment approach, the benefits that REITs provide to COAERS, market issues that COAERS is watching, advice for funds considering a change in strategy, and more.COAERS is a defined benefit plan that administers retirement benefits for regular employees of the city of Austin and currently serves about 19,000 current, inactive, and retired members. The system’s investments total approximately $3 billion and are broadly diversified across asset classes including equities, real assets, fixed income, multi-asset strategies, commodities, and cash.

John Vojticek, global head of liquid real assets at DWS, a global asset manager with nearly $1 trillion of assets under management, was a guest on the latest episode of the REIT Report podcast.Vojticek commented on the operating environment for listed REITs, DWS’s recommendations for using REITs in conjunction with private real estate to complete portfolios, the access REITs provide to emerging asset classes, the benefits of global investment in REITs, and more.

Uma Moriarity, senior investment strategist at CenterSquare Investment Management, was a guest on the latest episode of Nareit’s REIT Report podcast.Moriarity spoke about how REITs are faring in the current interest rate climate, how their valuations compare to private real estate, REITs and their position in the capital markets, property sectors that CenterSquare is bullish on, and more.A pause in interest rate hikes is generally expected to occur at the next Federal Reserve meeting, Moriarity said. While some are expecting a subsequent rate hike in July, “it’s fair to say that we're closer to the end (of the rate hike cycle) than we are to the beginning,” she added.