Abby McCarthy, Nareit’s senior vice president for investment affairs, joined the REIT Report podcast to discuss the value REITs can provide to an overall investment portfolio.
“REITs offer investors a low cost, effective, and liquid means of investing in commercial real estate. As real estate stocks, they provide meaningful benefits to investment portfolios, which does include competitive long-term total returns, a strong portfolio diversification, and stable dividend income,” McCarthy said.
Research shows that 78% of financial advisors recommend REITs to their clients, McCarthy said, with advisors appreciating their dividend income, diversification opportunities, strong risk-adjusted returns, and liquidity.
During the interview, McCarthy also noted that:
• A recent Morningstar analysis found the optimal allocation to REITs ranges from about 4% to 20% across a range of life stages for investors.
• Younger investors who are investing in a 401k or a 403b plan can take advantage of the compounding of dividend income that REITs can provide.
• For investors at retirement age, or well within retirement, REITs can provide a reliable income stream.
• Investors can find a range of resources on REIT.com, including market commentaries and trend and performance statistics.
• REITs should be in a strong position to make acquisitions in 2025 and benefit from accretive growth.