The retail sector has had a good first half of the year despite ongoing concerns in the economy, according to Don Wood, NAREIT chair and president and CEO of Federal Realty Investment Trust (NYSE: FRT).
“It has been a very good first six months. I think consumer confidence has been stronger than I thought it would be. People are out there shopping,” Wood said during an interview with REIT.com on June 12 during REITWeek 2012: NAREIT's Investor Forum at the New York Hilton.
Wood said consumer confidence is one of the primary challenges at the moment in the economy, affecting the entire psyche of the country.
“If people are in a positive mood, things will continue to be good,” he said.
Wood also said the political situation in Washington and the upcoming elections will play a big part in dictating the direction of the REIT market in the second half of they year.
“Obviously, there are political changes coming at the end of the year, and lots of things are hanging out in the balance," he said.
One major issue left to be resolved is the potential expiration of the Bush tax cuts.
"We are sitting here looking at the perfect storm if nothing happens by the end of the year,” Wood said in reference to the decision facing Congress and the White House regarding the tax cuts.
When it comes to investing in real estate, Wood said the diversification that REITs provide along with their liquidity are just two of the many advantages of the REIT approach to commercial real estate investment. REITs have become more mainstream, according to Wood, which he attributed in part to the work of NAREIT.
“This is a lot of what NAREIT has done over the past 10, 15 or 20 years. REITs are on the radar of mainstream. It’s becoming, more and more, an important part of the American investment alternative,” Wood said. “It’s a part of the fabric of how you invest in this country, and that can only spell good things to come.”