REITs could benefit from stock index split-off

Miami /
Jan.January 25, 2016 03:00 PM

From the New York website: Publicly traded real estate investment trusts could benefit from a decision by major stock indices to break out real estate securities into their own, separate sector.

While real estate companies are currently lumped in with major financial companies likes banks and insurers, the S&P Dow Jones Indices and MSCI stock indexes plan to split real estate away from those stocks starting Aug. 31.

The move is expected to lessen volatility for real estate securities and push up valuations, according to financial publication Pensions & Investments, with up to $100 billion potentially flowing into REITs as a result of investment managers adjusting their strategies to match market weighting.

“It will be a structural tsunami into REITs,” Michael Underhill, founder of asset manager Capital Innovations told P&I. “More money will be driven into REITs… and so valuations will continue to climb and there will be continued outperformance in the REIT space.”

Real estate stocks have not responded well to stock market volatility in the past several months, with companies taking sizable hits after market downturns in both August and earlier this month. [Pensions & Investments]Rey Mashayekhi


Related Articles

arrow_forward_ios
Jonathan Kalikow and Leonard Tannenbaum
Jackpot: Cannabis REIT has $120M in capital to lend to operators
Jackpot: Cannabis REIT has $120M in capital to lend to operators
(Illustration by Andrew Colin Beck)
These highly leveraged real estate firms could feel the squeeze in a downturn
These highly leveraged real estate firms could feel the squeeze in a downturn
Maryland pension cuts REITs out of portfolio
Maryland pension cuts REITs out of portfolio
Maryland pension cuts REITs out of portfolio
(Credit: Pixabay)
Americans’ net worth falls for the first time since the financial crisis amid stock selloff
Americans’ net worth falls for the first time since the financial crisis amid stock selloff
Nashville office REIT eyes sector’s first IPO this year
Nashville office REIT eyes sector’s first IPO this year
Nashville office REIT eyes sector’s first IPO this year
GEO Group expects to boost revenue in 2019 after ICE budget grows
GEO Group expects to boost revenue in 2019 after ICE budget grows
GEO Group expects to boost revenue in 2019 after ICE budget grows
Expecting a safe haven, REIT investors found no calm in 2018
Expecting a safe haven, REIT investors found no calm in 2018
Expecting a safe haven, REIT investors found no calm in 2018
WATCH: Anthony Scaramucci on his Opportunity Zone fund’s $2B deal pipeline
WATCH: Anthony Scaramucci on his Opportunity Zone fund’s $2B deal pipeline
WATCH: Anthony Scaramucci on his Opportunity Zone fund’s $2B deal pipeline
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...