10/8/2015 | By Sarah Borchersen-Keto
Evercore ISI Group took first place honors in Institutional Investor magazine’s annual awards honoring the top REIT analyst teams.
The eight-member Evercore ISI team is led by Stephen Sakwa. ISI, which Evercore acquired in October 2014, held the top spot from 2010 to 2014.
Second place was awarded to the 11-member team at Citi, led by Michael Bilerman. This is the sixth consecutive year the Citi team has held second place.
Bank of America Merrill Lynch’s 10-member team, led by Jeffrey Spector, took third place for the third consecutive year.
Sakwa told Institutional Investor that fundamentals are generally in good shape across most REIT asset classes. The Evercore ISI team expects pricing power to remain stable or improve next year in light of gross domestic product growth, job gains and supply projections. While higher interest rates are partly factored into REIT stock prices, a sharp upward move in the 10-year Treasury note would unnerve investors, the team added.
Meanwhile, Bilerman told the magazine that the Citi team holds a positive view on U.S. REITs, which is in part due to the significant amount of foreign capital chasing U.S. real estate. Real estate fundamentals are expected to remain firm, given that supply is under control and the economic background is positive, according to Bilerman.
Spector told Institutional Investor that he and his team are anticipating that REIT operating fundamentals should continue to improve as tenant demand increases and supply remains limited. Strong fund flows into U.S. prime assets will support valuations and keep capitalization rates fairly firm into 2016, according to the Bank of America Merrill Lynch team.
The All-America Research Team is compiled by sending questionnaires to the directors of research and the chief investment officers of major money management firms. Institutional investors on client lists submitted by Wall Street research directors were also contacted, while questionnaires were sent to analysts and portfolio managers at many top institutions, according to Institutional Investor.