To buy REITs, or not to buy REITs…that is the question

On the one hand, REITs trade at a significant discount to private real estate values, REIT’s have strong earnings growth, and REIT’s own the highest quality commercial real estate portfolios in the country [US that is]. On the other hand, leading macroeconomic indicators are pointing towards recession. The ISM new orders index has fallen below 50, the Atlanta Fed GDP Now forecast is negative, pending home sales are down -8.2% year over year, and consumer sentiment has fallen to below 2008 levels. With the average recession lasting 12.5 months, the US economy, the stock market, and the broader commercial real estate market may be far from a bottom.

Credit: SERENITY Alternative Investments / Martin D Kollmorgen

This to us is comprehensive information on risks that are originating from current market circumstances. But also on advantages of investing in REITs asset classes.