Deep Dive: REIT investors must weigh rate hikes and potential credit crunch

‘Eye of a central-bank induced storm’

James Baxter-Derrington
clock • 4 min read

Investors considering real estate investment trusts must consider the potential for both further rate hikes and a “banking crisis driven credit crunch” before committing to the sector, experts have warned.

Speaking to Investment Week, Todd Kellenberger, REIT client portfolio manager at Principal Asset Management, said these two issues must be "at the forefront of investor minds when considering REITs". "Commercial real estate is currently in the eye of a central-bank induced storm, with stickier-than-anticipated inflation requiring continued hawkish bank rhetoric and further rate increases," Kellenberger explained. "This has pushed back expectations for central bank rate cuts, increasing upward pressure on bond yields and negative pressure on real estate values and REIT stock prices. "T...

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