NAREIT 2016 Chair Sees Solid REIT Fundamentals Continuing Into 2016

Ed Fritsch, president and CEO of Highwoods Properties, Inc., and NAREIT’s 2016 chair, joined REIT.com for a video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas.

Fritsch provided an overview of the current state of the REIT industry.

“Fundamentals are in good shape across virtually all sectors, so the world as far as where we are has held together quite well. The REIT instrument continues to perform,” Fritsch said. “REITs have another good year to look forward to with inexpensive capital and access to both equity and debt.”

Concerns about changes in interest rates have weighed on REIT stocks, as they have the broader market, Fritsch pointed out. However, he added that an increase in interest rates has historically not been a negative to REIT performance.

Overall, “the message for REITs is good, the level of investment is high and the level of awareness is strong,” Fritsch said. Furthermore, the elevation of real estate to an 11th headline sector within the Global Industry Classification Standard (GICS) in August 2016 creates new opportunities, he said.

That important development fits in with one of Fritsch’s primary goals as NAREIT chair, which is to continue broadly communicating the benefits of the REIT approach to real estate investment..

“We’re at an inflection point akin to when the modern REIT era came about,” Fritsch said. He noted that REITs have become a mainstream investment with a combined equity market capitalization of $1 trillion and asset values of $2 trillion. “Those are big numbers -- what it presents for us is a broader audience to get in front of and be sure they understand the benefits of the REIT instrument.”

Fritsch also underscored the need to not only reach out to the investment community but to continue to convey the message of REITs and real estate on Capitol Hill.