Gina Szymanski, managing director and lead portfolio manager, North America REITs, at AEW Capital Management, was a guest on the latest episode of the REIT Report podcast.
Szymanski noted that a lot of discussion at Nareit’s REITweek: 2024 Investor Conference focused on the capital markets backdrop and what that means for transaction activity.
“Generally, REITs are in a much better position than a lot of private players. They're not dealing with redemption queues. They have access to unsecured borrowing markets as opposed to just having to deal directly with banks and the mortgage lending backdrop,” Szymanski said.
In addition, lower leverage, minimal variable rate debt, and laddered maturities mean that REITs have the “luxury of time” to wait it out until the Federal Reserve begins to adjust interest rates, she said.
Deals are getting done across the REIT industry today, with activity occurring in data centers, senior housing, medical office, industrial, and shopping centers, Szymanski said. “Cap rates are really being driven by the unlevered buyers and that's making it very difficult for the levered buyers to underwrite deals that are accretive at the moment,” she added.
Elsewhere in the interview, Szymanski discussed the impact of REIT share prices, opportunities for outperformance, and the importance of monitoring the financing market.