Listed REITs offer buying opportunity, analyst says

investmentnews.com:

With the market for listed real estate investment trusts at historic lows, financial advisors may want to dust off the real estate allocation in clients’ portfolios and begin to expand that position.

That’s according to Rich Hill, senior vice president and head of real estate strategy and research at Cohen & Steers, an investment manager focused on real estate securities like listed REITs and private funds that are not listed.

“We’re a big believer that listed real estate is a leading indicator for the private markets,” said Hill, who was speaking on the sidelines at the Schwab Impact conference in Philadelphia Wednesday. “Listed real estate is down 32% from its peak, Dec. 31, 2021. It’s been a bumpy ride.

“2022 was one of the worst years ever, and 2023 has been volatile, to say the least,” he said. “Listed REITs are bouncing around the bottom.

“We think this is the attractive opportunity to buy listed REITs and are starting to pound the table a little bit about listed REITs,” Hill said. “That’s because the valuations have reset so much over the past three months.”

Some financial advisors who bought nontraded REITs over the past several years have likely had to deal with questions from clients this year about the investments’ performance.

At the close of 2022, REITs including the Blackstone Real Estate Income Trust Inc. and the Starwood Real Estate Income Trust Inc. hit snags, informing some investors looking to pull money out of the REIT through redemptions that they had hit their limits. Those investors needed to get back in line and wait to sell back their shares in the REITs.

The pitch for nontraded REITs, past or present, has always been simple: They are a way for clients to diversify their portfolios, invest