Investing in Real Estate Stocks: Finding Hidden Gems in Industrial REITs
Real estate stocks have been lagging behind the market recently, but there is one area in particular that is showing promise according to Janus Henderson. While the S & P 500 real estate sector has seen a 10% rally over the past month, industrial real estate investment trusts (REITs) have been lagging behind.
This underperformance, however, presents an opportunity for savvy investors. Greg Kuhl, a portfolio manager at Janus Henderson, believes that the industrial real estate sector is poised for a turnaround. With supply expected to decrease significantly in the coming months and demand holding steady in key submarkets, there are attractive opportunities for investors to explore.
Industrial REITs, which own and manage industrial facilities, have been hit hard in recent months. However, Kuhl sees potential in the Sun Belt and Midwest markets, where supply/demand fundamentals are more favorable compared to coastal markets like California. Companies like EastGroup Properties and First Industrial Realty Trust are prime examples of industrial REITs that could see growth in the coming months.
EastGroup Properties, with its focus on smaller industrial properties in high-demand areas, presents an intriguing investment opportunity. Similarly, First Industrial Realty Trust offers national and coastal exposure at a significant discount to its peers. Both companies also offer attractive dividend yields, making them appealing options for income-focused investors.
Additionally, the recent IPO of Lineage, the largest temperature-controlled warehouse REIT in the world, could signal further growth in the industrial REIT sector. With favorable supply/demand dynamics in the cold storage market, Lineage and similar companies could outperform in the coming months.
Overall, industrial REITs present a unique opportunity for investors looking to capitalize on the rebound in the real estate sector. With careful consideration and strategic investment choices, investors could stand to benefit from the potential growth in this underappreciated corner of the market. Stay ahead of the curve with Extreme Investor Network for more exclusive insights and investment opportunities.