Peter Zabierek, senior portfolio manager at Easterly Ranger, joined the REIT Report podcast to discuss some of the complexities of the current real estate market in which “the easy answers are gone,” but where more opportunities exist for investors who can be selective.
“It's less about broad sector calls and more about understanding where demand is actually showing up and how capital is being allocated and who can execute. So that's what's driving outcomes right now and that's where the opportunity is,” Zabierek said.
During the interview, Zabierek noted that real estate has become a “much more operational business and outcomes are increasingly driven by how well companies execute.” As a result, now is really the time to focus on management teams and how they're executing their business plans, not just the assets that they own, he said.
Other topics Zabierek discussed included: global trends in real estate, sector momentum and opportunities, and housing affordability and institutional ownership of single-family rental homes. On the latter, he noted that institutional ownership is still a relatively small share of the overall housing market and most of the policies being discussed are “pretty early stage and not terribly clearly defined.”
The bigger trend, he said, is a continued shift to a more institutional, better-capitalized platform in build-to-rent. “I think that plays into where the REITs find themselves and that favors larger operators with scale and operating capabilities, while smaller operators might find it a little bit more challenging,” he said.