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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.

 

To read the full article from Reuters, click here.