A conversation about how REITs are navigating capital markets and economic uncertainty took center stage during the lunch general session on day one of Nareit’s REITweek: 2025 Investor Conference.
Conor Flynn, Nareit’s 2025 chair and CEO of Kimco Realty Corporation (NYSE: KIM), moderated the panel discussion.
In his remarks about his outlook for the capital markets, Ragavan Bala, global co-head of real estate, gaming, and lodging at Barclays, noted that the stock market has shown a lot of resilience. “What we’re going to have though are these spikes in volatility,” he said. “It’s a fact that we’re going to have to live with for the next 30 to 60 days and potentially beyond.” He attributed two reasons to the ongoing volatility: the economic consequences of any future trade agreements and the amount of confidence that the capital markets have in America’s government. “I think we’ll emerge fine on the other side, but it’s going to be a little bumpy,” added Bala.
Scott Levin, head of real estate investment banking for Wells Fargo, built upon Bala’s comments by explaining how economic uncertainty is affecting REITs. “Since Liberation Day, the 10-year Treasury has gone up more than 25 basis points and the real estate market has underperformed by almost 600 basis points,” he noted. “It’s all about rates. The reality is that when we’re in an environment where the long end of the curve remains elevated, we’re going to underperform. The question is: what is the real catalyst for that to change?”
Throughout the panel, the speakers touched on a range of other topics, including:
- Trade policy. The uncertainty that people are seeing in the markets is going to last a while, said Jeff Horowitz, global chair of real estate, gaming and lodging investment banking, at Bank of America Securities. That uncertainty “tends to cause people to pause for a period of time, but at some point, they can only pause for so long,” he added. “Our markets, and our REIT market, are the biggest in the world. The tariffs and uncertainty may move people to say we’ll invest a little more in Europe and other places, but at some point, you can’t stay out of the biggest market. You have to come to some decisions. There is going to be a lot of angst though that plays its way through.”
- The chance of a recession. “The consensus view is 30% over the next 12 months,” said Levin. “The reality is, it’s binary. If tariffs escalate, there is a 100% chance of a recession. There will be slower growth, increased inflation, and higher unemployment. Right now though, the market is pricing in a soft landing related to tariff negotiations.”
- The 10-year Treasury. Bala explained that “the notion of a 4%-ish 10-year Treasury isn’t crazy.” He acknowledged that “we don’t like it because we’ve seen an environment where it’s a lot lower. We’ve all done transactions and financed assets at lower rates, and now we’re going to have to refinance in a different rate environment. Yet from a pure corporate finance perspective, it’s not incongruous with where bond yields are priced. I think a 4% 10-year Treasury is probably where we’ll be at going forward.”
- IPOs. “There is not a big pipeline, and that’s the reality,” stated Horowitz. “There is a market if you have a good story and a good management team, but a lot of people are hesitant to enter the market given the uncertainty. Uncertainty also gives rise to more trading discounts, which people don’t love,” he added.
- REIT debt issuance. The panelists agreed that capital markets are wide open to REITs. Yet with capital issuance windows opening and closing in the market, “capital strategy and capital allocation is going to be more conservative,” explained Levin. “RETs have strong balance sheets,” he said. “We’re going to see REITs be more active. When they need capital, they’re going to go for capital because they don’t want to take the risk of something happening from a broader market perspective and closing that window.”
Additional Resources
- Read insights from the European Listed Real Estate panel, which also took place at REITweek 2025.
- Learn about Nareit’s annual Investor CARE Awards and the 2025 recipients.