REITs “Appropriately Valued” Versus Equities and Bonds, Analyst Says4
07/21/2016 | by Sarah Borchersen-Keto

John Guinee, managing director at Stifel Nicolaus, joined REIT.com for a video interview at REITWeek 2016: NAREIT’s Investor Forum at the Waldorf Astoria New York.

Guinee discussed the valuation of REITs relative to the broader equity and bond markets. According to Guinee, REITs are “appropriately valued right now.”

Guinee noted that REITs have outperformed the broader equity market by 300 to 500 basis points so far this year in a declining interest rate environment.

Meanwhile, Guinee pointed out that the current aversion to risk combined with generalist investors who are more focused on earnings growth have shifted attention to those REITs that have consistent earnings and dividend growth, rather than just net asset value discounts.

Regarding specific sectors Guinee said industrial fundamentals on a national basis have been “surprisingly good,” as supply has remained in check. He also noted that, unlike several years ago, there now seems to be a lack of consensus on the best-performing office markets.