Nareit's REIT Report Podcast

Andrew Alperstein, PwC U.S. real estate partner, and Daniel Sullivan, PwC U.S. financial markets and real estate leader, discussed key takeaways of PwC and ULI’s Emerging Trends in Real Estate 2024 report, which incorporates data and insights from more than 2,000 industry experts.One of the main themes of this year's report is what it terms the “Great Reset,” in which old assumptions are no longer valid. Alperstein said commercial real estate investors are going to have to be “more diligent, more operationally focused, as they strive to add value and profitability relative to recent years when low rates, decreasing cap rates, and a high amount of leverage was a big part of the way value was created and profitability was obtained.”As for transaction volume, the current environment of higher rates, more rigorous underwriting from the lender side, and a pullback from the banks is going to make it challenging, particularly to get bigger deals done, Alperstein said.

Tracy Powell-Rudy, vice president of corporate engagement at Integrate, a nonprofit that helps organizations identify, recruit, and retain autistic and neurodivergent talent, was a guest on the latest episode of Nareit’s REIT Report podcast.Powell-Rudy discussed the level of awareness around neurodiversity in the wider population today, the level of participation for neurodiverse individuals in the workplace, and some of the key factors impacting their hiring.She also discussed practical steps that companies can take to become more aware of neurodiversity, to make their hiring processes more amenable to neurodiverse candidates, and how to signal to the outside world that neurodiversity is something that’s on a company’s radar.In addition, Powell-Rudy covered best practices for companies that are starting up hiring programs or looking to work with a partner.

Doug Weill, founder and co-managing partner of Hodes Weill & Associates, a leading global capital advisory firm, was a guest on the latest episode of Nareit’s REIT Report podcast.Hodes Weill recently released the 2023 Real Estate Allocations Monitor, which showed that institutions’ target allocations to real estate were flat at about 10.8% year-over-year.“Institutions are very cautious in the market today. And while they're reasonably optimistic about the opportunity to invest over the next couple of years, right now in the moment there are numerous cross currents,” Weill said.At the same time, several large institutions have increased their target allocations over the past 12 months, Weill noted. “I think that has been a signal to the market that they are encouraged about the opportunity to invest and perhaps lean into the opportunity.” Such institutions include Norges Bank and CalSTRS.

Tom Bartlett, president and CEO of American Tower Corp. (NYSE: AMT), was a guest on the latest episode of Nareit’s REIT Report podcast.Bartlett discussed American Tower’s recently launched Sustainability Report and provided an overview of the REIT’s broader sustainability strategy. He explained that “neutral hosting” is central to the company’s inherently sustainable business model. “Neutral hosting allows multiple customers to lease space on a shared single tower or asset, which reduces the number of sites required and minimizes the industry's overall environmental impact”, he said.Beyond providing digital infrastructure, Bartlett noted that American Tower’s global presence enables it to play “a significant role in fostering connectivity in a responsible, equitable, and sustainable way to realize our vision of building a more connected world.”

Aaron Halfacre, President and CEO of Modiv Industrial, Inc., discusses the focus on industrial manufacturing facilities due to their attractive upside potential. The podcast explores the state of US manufacturing, challenges in the capital market, strategic acquisitions in the manufacturing industry, and opportunities for small cap REITs.

David Auerbach, REIT industry expert and the chief investment officer of Hoya Capital & Hoya ETFs, was a guest on the latest episode of Nareit’s REIT Report podcast.Auerbach said fundamentals for REITs have remained “very strong,” despite the Federal Reserve’s tighter monetary policy. “If you look at the last quarter, public REITs reported same store property level income about 10% above where they were pre-pandemic. Many of these REITs have been preparing for winter for a long period of time, cleaning up their balance sheets, focusing less on variable rate debt.”He added that investors want management teams to do four things—grow revenues, grow profits, grow guidance, and grow dividends. “Pretty much by and large, that's been what's happening across the spectrum in the REIT industry.”

Brad Thomas, real estate expert and CEO of Wide Moat Research, discusses the role of PropTech in the REIT sector. He highlights how PropTech has helped companies grow and produce more earnings. Thomas also shares insights from his newly released book, 'REITs for Dummies', covering the history of REITs, different property sectors, and future trends in the industry.

Avis Devine, associate professor of real estate finance and sustainability at the Schulich School of Business at Toronto’s York University, was a guest on the latest episode of Nareit’s REIT Report.Devine discussed new research, sponsored by Nareit, into the sustainability performance of listed REITs and private real estate as well as their approaches toward sustainability commitments and disclosure, and the relationship between sustainability disclosure and performance among REITs.“Public and private real estate firms make different decisions regarding their sustainability commitments and their disclosure,” Devine said. Using the Global Real Estate Sustainability Benchmark (GRESB) reporting structure, the research shows that historically REITs have outperformed private funds on sustainability performance. However, that gap has been narrowing in recent years

Todd Kellenberger, REIT client portfolio manager at Principal Asset Management, was a guest on the latest episode of Nareit’s REIT Report podcast.Kellenberger noted that listed REITs currently trade at significant valuation discounts to both equities and private real estate. He pointed out that the earnings price multiple of REITs versus equities today is over two standard deviations away from the long-term mean—"a level that's even cheaper than what we saw during the GFC, particularly for U.S. listed REITs.”Meanwhile, the change in valuations for private real estate have been slower than for listed REITs, given the appraisal-based methodologies and limited price discovery in today's transaction markets, he added.

Marcos Alvarado, president and CIO at Safehold Inc. (NYSE: SAFE), was a guest on the latest episode of Nareit’s REIT Report.Alvarado said Safehold has made a “tremendous” amount of progress in the last six years in terms of portfolio expansion and growth in enterprise value, “but in the greater scheme of what we're looking to accomplish, I think we're still very, very early on…that's what excites us about the future.”