Investment Strategist Highlights Fundamentals Driving REIT Share Gains

November 24, 2014

Real Estate Investment Trusts Magazine


Glenn Mueller, a University of Denver professor and real estate investment strategist at Dividend Capital Group, joined REIT.com for a video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.

Mueller stressed that job growth has been a key indicator for real estate investors to consider. He explained that in 2014, average monthly employment growth averaged more than 200,000 jobs, compared with about 100,000 per month in the prior few years.

“That produces a lot more demand for real estate,” which has pushed occupancy levels higher and allowed landlords to boost rents, Mueller said. “The REIT market is up over 20 percent this year, and part of it is because of those improving fundamentals,” Mueller noted. He added that he expects solid job growth to continue in 2015.

Turning to interest rates, Mueller pointed out that for investors, REIT stocks have historically been considered part of the financial sector. The perception that REITs will be hurt by higher interest rates is likely to persist for one or two quarters after rates start rising, at which point it will become clear to investors that REITs are performing well, he said.

Meanwhile, Mueller said that in a world of increasing complexity where it is becoming harder for companies to operate, larger REITs will have the resources necessary to do well and handle the pace of change.