The path to higher interest rates has affected a variety of sectors and asset classes, perhaps none more than real estate investment trusts (REITs). REITs have been hit by a rare triple whammy of woes. With rising borrowing costs, lower property values, and investors fleeing to safer, high-yielding harbors, the sector has shown significant losses and continues to underperform the broader market.
However, the fortunes may be changing for REITs.
With the Federal Reserve continuing to pause and now actually talking about cutting interest rates, REITs could be in a wonderful position for gains. For investors, now could be the best time to lock in yields within the sector and prepare for strong returns.
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