Seth Laughlin, head of real estate strategy & research at Cohen & Steers, joined the REIT Report podcast to discuss key forces shaping REIT and listed real estate performance today, including the importance of sector positioning amid an economy facing accelerated disruptions.
Citing “massive” changes in corporate and consumer behavior, Laughlin noted that “as we look forward, I think AI is going to be the next disruption to how the economy takes space.” Given these vast shifts, “I do think sector allocation is going to be crucial as we seem to be accelerating these disruptions in the economy.”
Laughlin also discussed how, despite geopolitical tension, REITs have managed to maintain their position, showcasing resilience compared to broader market movements. He also pointed to a wide dispersion in sector performance, with some sectors like shopping centers thriving while others are struggling.
Looking more broadly, Laughlin pointed out that one of reasons he is more optimistic about prospects for REITs overall is that the run-up in construction costs, and supply having abated in sectors like industrial, has resulted in a rebalancing. “That means there will be some bespoke development in places like data centers, but I don't see a meaningful rebound in any of the sectors over the near term that give me cause for concern, at least over the next two years.”