Research @ Citi Episode 69: The Reality of Real Estate
Mar 12, 2026
Nick Joseph, Global Head of Real Estate at Citi Research and U.S. real estate and lodging analyst, offers a concise take on sector dynamics. He discusses why REITs are outperforming, shifting development pipelines, AI’s influence on data centers and office demand, hotspots for stock-specific alpha, and evolving trends in hotels, malls and M&A activity.
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Generalist Flows Fueled By AI Thematic Rotation
- Recent inflows into REITs are coming more from generalist investors than just REIT-dedicated funds, driven partly by AI as a thematic safe haven.
- Flows this year are roughly flat, an improvement over prior outflows, and large liquid names attracted most interest.
Post-COVID Development Pipelines Are Drying Up
- COVID-era demand for apartments, industrial and life sciences spurred big development pipelines that are now delivering and shrinking supply.
- Apartments peaked in deliveries in 2025, industrial peaked earlier, and life science deliveries are declining toward equilibrium.
AI Reshapes Demand And Boosts Data Centers
- AI's macro effect is to change demand patterns for how people work, live, and travel, with office under the most scrutiny.
- Data centers are the clear direct AI beneficiary already, though power constraints limit supply growth.