Retail REIT Sell-Off Overdone, Mizuho Analyst Says
12/13/2016 | by Sarah Borchersen-Keto

Haendel St. Juste, managing director at Mizuho Securities US, joined REIT.com for a video interview at REITWorld 2016: NAREIT’s Annual Convention for All Things REIT at the JW Marriott Phoenix Desert Ridge.

St. Juste commented on the volatility in the REIT market in the second half of the year. REIT stock prices have dropped about 20 percent since August.

“Fundamentals are slowing,” St. Juste said, although they are “still good by historical standards.”

St. Juste said REIT market volatility is likely “here to stay in the near term.” However, he stressed that REITs remain a good long-term investment. The price pullback actually “provides a good entry point” into the market, he said.

As for retail REIT stocks, St. Juste said investors are right to be concerned about the potential for additional store closures. Yet, “we think the sell-off has been overdone,” he said.

While store closures will produce a short-term drag on occupancy and net operating income, St. Juste noted that the trend can be an advantage to higher-productivity landlords.

“To get some of that space back is a good thing. The key is not to get too much back at one time,” he said.