Real Estate Fundamentals Look Solid, Says REIT Analyst

Paul Adornato, managing director at BMO Capital Markets, joined REIT.com for a video interview at REITWeek 2016: NAREIT’s Investor Forum at the Waldorf Astoria New York.

Adornato said most real estate sectors are “looking pretty good” for the second half of the year: Although November’s general election is a “wild card,” the economy remains on a slow-growth track, which is positive for REITs.

Turning to potential trouble spots, Adornato noted that regional shopping malls are under pressure in light of the problems faced by their department store tenants. At the same time, concerns have emerged that new supply in the self-storage segment might “snuff out very strong operating metrics,” he added.

Looking forward, Adornato said investor attention is likely to turn to the duration of the current real estate cycle.

“Most folks believe we’re probably in a later inning, so when does the music stop for real estate?” Adornato said. Investors are also “very concerned” about  arbitrage between Wall Street and Main Street in terms of asset pricing, he added.