Yahoo Finance

Real estate, REIT opportunities in this high rate environment

The dark cloud hanging over the US real estate market may be casting an even longer shadow on REITs, or real estate investment trusts. The Federal Reserve's sentiment on keeping interest rates higher for longer has prolonged elevated mortgage rates, which have run rampant and impaired Americans' ability to buy or own a home. Janus Henderson Investors Global Real Estate Portfolio Manager Gregory Kuhl and Haendel St. Juste, Mizuho Senior Equity Research Analyst for REITs and Homebuilders, sit down with Yahoo Finance's Market Domination to talk about the Fed's monetary policy and its reverberations felt by REITs and the broader real estate industry. "We're pretty optimistic that assuming we are done in terms of Fed rate hikes and higher rates, listed REITs today are priced for the interest rate environment that we have, which means they can do well," Kuhl explains, adding: "It's not an issue of fundamentals, it's purely an issue of valuation, which we think we're getting towards the end of." Kuhl and St. Juste weigh in on areas of the real estate sector that show promise, naming a few standout stocks from the landscape. "We point people to sectors where there's clear demand tailwinds — apartments, healthcare data centers, and stocks [with] names with, pricing power, better than average earnings growth to alleviate some of those concerns," St. Juste comments. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Luke Carberry Mogan.