Positioning Portfolios in a Rising Rate Environment
Date of Live Event: September 6, 2018
Kevin Kelly
CEO
Benchmark Investments
Brad Case
Senior Vice President, Research & Industry Information
Nareit
Advisor Q & A
1. Does real estate have a place in emerging markets?
2. Any implications of the Tax Act on REIT demand or profitability?
3. What concerns should investors have investing in daily liquid vehicles (MF’s/ETF’s) holding an extremely illiquid asset like real estate?
4. What is the average leverage of REITs and the average duration of their debt?
5. How do we see both a retail renaissance and an explosion in the need for server farms that drive ecommerce?
6. Is there a geographic concentration for these retail experience locations?
7. I’ve seen a lot of marketing on investing in RE through Fundrise; what are similarities/differences to REITs?
8. I don’t think Equinix or Iron Mountain consider themselves real estate investment companies. Why would these be included in a REIT index or REIT tracking ETF?
9. Why only three benchmark indexes rather than eight? Or why not one fund that owns all eight property types/sub-sectors?
10. What about the performance of “short term or short duration” sectors- apartments, hotels, self storage, and manufactured homes (NURE), or even residential (REZ)?
11. Are these statistics in your presentation today relating to publicly traded REITs vs non publicly traded REITs?
12. Although the long-term correlations of rates & REITs appears positive, what do you attribute the housing crash last decade to? It appears to precede the stock market downturn, but yet coincided with a series of rate hikes.
13. Do you have an opinion on non-traded REITs?
14. How do you define a real estate market cycle?
15. What would happen to REITs if interest rates decline?
16. Which foreign markets have the most developed REIT markets and how do their valuations compare to the U.S. REIT market?
17. This data goes back to August 1997? We haven’t seen a real prolonged jump in interest rates for over 30 years. Is there data going back to that time to see how real estate performed?
18. What goes into the valuation of real estate?
19. How does leverage affect REIT performance in a rising rate environment?
20. In the 16% of time when REITs didn’t rise during rate increases what was the main reason?
21. Any meaningful dispersion across different subsets of REITs performance in rising rate environments?
22. Which types of REITs/ REIT sectors do well in a rising interest rate environment?
23. How much do you attribute the bond bull market to REIT’s strong returns? Low rates certainly make real estate income more attractive.
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