Investment Strategist Says About 60% of REIT Market Today is Non-Traditional

Scott Crowe, chief investment strategist at CenterSquare Investment Management, recently joined Nareit at its Washington, D.C. headquarters to discuss the commercial real estate and REIT markets.

Crowe said that fundamentals for listed real estate are steady at the moment, but are influenced broadly by structural shifts, including changes in demographics, preferences, and technology.

“Some asset classes like retail and office, particularly older office assets, are facing pretty hefty capex bills to keep their spaces relevant,” Crowe said. On the other hand, he said, other asset types like industrial, warehouse, distribution, data centers, and cell towers have been big sector winners.

Crowe said that because demographic preferences and technology have made life and work increasingly complex, “the box that we call institutional real estate has gotten wider,” with the REIT market ahead of the private market.

“About 60% of the REIT market today is non-traditional,” he said. “The REIT market has been much earlier, and I think more correct, in adopting these other asset types that really reflect the real estate that we use today, [which] is much more varied and complex.”

Crowe added that he expects retail, particularly malls, and older office assets to be the most likely sectors to face upheaval in 2020.