Jay Leupp, managing director and senior portfolio manager with Lazard Asset Management, joined REIT.com for a video interview at the St. Regis Hotel in Washington, D.C. during NAREIT’s 2014 Washington Leadership Forum.
Leupp offered his analysis of the start of 2014 for the REIT market.
“It was a little shaky at first—January was a bit rocky,” he said. “We’ve seen a gradual strengthening of the REIT market. We’ve had good, solid earnings reports, the interest-rate environment looks benign and it looks like the economy is going to grow a little bit faster than most investors are expecting or predicting.”
Leupp also gave his take on some of the major developments to watch outside the United States. He started with the North American market.
“The Canadian picture looks pretty similar to the U.S.,” he said. “Mexico is a market that we’ve liked for some time, and I think the question this year is if the rally that we’ve seen in the last couple years can continue.”
Leupp then turned to Latin America.
“We’re looking for bargains in places like Brazil and Argentina, although we haven’t been real active yet because we still think there could be a little bit more downside,” he said.
Leupp discussed his outlook for Europe.
“We’ve been invested for some time and we are looking to invest in high-quality assets in the markets that have yet to recover,” he said. “We’re seeing some modest economic growth this year for the first time in a long time, so we’re optimistic that there are some bargains in Europe.”
Leupp also provided his thoughts on the state of play in the Asian market.
“In Asia, the questions for us are in the major markets of China and Japan,” he said. “We’re looking to see if the current policy restrictions that the government has put on local banks and local transactions in China will have a negative effect on their real estate market and if they have the effect of limiting new supply. In Japan, Abenomics and monetary policy are really the drivers of stock price performance in Japan. We’re constantly evaluating and engaging how that will affect Japanese property markets."