The commercial real estate sector hasn’t exactly been on fire over the last few years. A surge in interest rates has impacted both real estate and the stocks that invest in properties, resulting in a double blow. Rising mortgage costs, combined with the appeal of higher yields found in safer securities, have led to an exodus from REITs (Real Estate Investment Trusts) and real estate stocks. This trend has affected a few former high-flying property subsectors as well.
But the downturn is a major buying signal for some of these high-flying property types.
This is certainly true for industrial REITs. A variety of factors are generating significant tailwinds for the industry, leading to gains, rising cash flows, and increasing dividends. For investors, the recent overall real estate downturn has reset valuations. Now might be the time to buy.
