Rich Hill, global head of real estate research at Principal Asset Management, was a guest on the latest episode of the REIT Report podcast. He shared insights into sentiment within the REIT space today, public-private valuations, foreign fund flows into U.S. listed real estate, the elements of a resilient, growth-oriented real estate investment portfolio, and more.
Hill stressed that commercial real estate should be viewed as a “diversified portfolio of various different property types, not just in the U.S. but in Europe. There is an opportunity someplace, somewhere in the world to add value through listed REITs and we think that will continue.”
He noted that adding listed REITs to a private portfolio of real estate reduces volatility. “We advocate for having a 10% to 30% allocation to listed REITs within a private portfolio of real estate because we really do think it optimizes portfolios,” he said.
“I actually think you're going to start to see investors merge the two portfolios together even more so than they have in the past. A lot of the reason is liquidity. I think private real estate investors have learned some hard lessons about having liquidity within their portfolio. Listed REITs provide that liquidity,” he added.