3 Reasons to own listed REITs today

3 Reasons to own listed REITs today

5 minute read

February 2024

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We see compelling evidence to own listed real estate in the current environment.

1. REITs have outperformed when yields are likely to move lower

REITs perform well after a Fed pivot and should be part of a long-term asset allocation. Tactical opportunities may emerge as rate/growth expectations remain volatile.

2. Moderating supply is supportive of rents

Fundamentals remain resilient. Demand is healthy, albeit decelerating, while supply is curtailed due to tighter financial conditions.

Construction starts by sector (% of inventory)
January 2015–December 2023
Moderating supply is supportive of rents

At December 31, 2023. Source: Cohen & Steers calculations and Bloomberg.
Past performance is no guarantee of future results. The information presented above does not reflect the performance of any fund or account managed or serviced by Cohen & Steers, and there is no guarantee that investors will experience the type of performance reflected above. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend might begin.

3. REITS are undervalued compared to equities

Valuations relative to the broader equity market are meaningfully below the historical median. Attractively priced equity and REITs’ access to the unsecured bond market could allow them to take advantage of external growth opportunities

Earnings multiple spread
January 2005–December 2023
REITS are undervalued compared to equities

December 31, 2023. Source UBS, Bloomberg, Citi Research – US Equity Strategy, and Cohen & Steers.
Past performance is no guarantee of future results. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend will begin. The information presented above does not represent the performance of any fund or other account managed or serviced by Cohen & Steers, and there is no guarantee that investors will experience the type of performance listed above.

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