REIT Portfolio Manager Sees Inflection Point in Same-Store NOI

Steven Brown, senior portfolio manager at American Century Investments, joined Nareit for a special edition of Nareit’s REIT Report Podcast recorded in New York during Nareit’s REITweek: 2018 Investor Conference.

Brown commented on REIT fundamentals, noting that following a deceleration in the last couple of years, “we’re starting to see an inflection point in terms of same-store net operating income (NOI).” If the United States economy continues to improve, that could bode well for an acceleration in REIT fundamentals in 2019, he added.

Meanwhile, as REITs continue to trade below their net asset value (NAV) levels, one of the key issues for management teams to focus on is the best way to allocate capital, according to Brown.

The underperformance by REITs during the past 12 to 18 months has caused them to be shunned by investors, Brown said. However, in the past few months several REIT share prices have hit 52-week lows, which has attracted value investors, he added.

As for broader developments, “we take very seriously corporate governance trends…good corporate governance, open corporate governance and transparent corporate governance are very high on the list of things we’re observing,” Brown said.