Adrianna Giesey, senior portfolio manager at Russell Investments, shared how the firm is providing investors with access to modern economy real estate by incorporating a specialty sector REIT strategy.
“We like the REIT market to gain access to the specialty sectors, which is a nice compliment to a core real estate portfolio,” Giesey said. She added that Russell Investments expects these modern economy sectors, such as data centers and single family rentals, to see stronger cash flow growth over the medium term.
The best way for investors to gain access to modern economy real estate is to trim traditional private real estate holdings and add listed specialty sectors, Giesey said. “This is the most efficient and low-cost way to access these specialty sectors at scale. We've helped clients do this in the past, and it's been a success all around.”
Giesey highlighted the complementary nature of listed and private real estate in a portfolio, with listed real estate typically 10%-20% of the Russell Investments’ real estate allocation.
Elsewhere, she noted that the U.S. real estate market “is on a path to recovery, but there's still a lot of uncertainty around what that recovery will look like. Fundamentals are generally improving, but do vary by sector.”