Reuters: REITs Outperform Broader Market in Rising Rate Environment
According to Reuters:
Rising interest rates this year are helping property-linked stocks outperform the broader U.S. equity market as investors bet real estate investment trusts (REITs) will provide a better return as the Federal Reserve tightens monetary policy further.
Higher rates can crimp corporate profit margins, a concern that led to a brief sell-off on Wall Street last week, but rents can be raised in a growing economy, which is helping lift REITs.
Most property types, with the exception of retail, are experiencing growth in rents, Joi Mar, an analyst at Green Street Advisors, wrote in a recent report.
With supply and demand roughly in balance, inflationary-type rent growth can be expected for the near future, she said.
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