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Quarter-End Insights

Our Outlook for Real Estate Stocks

Equity REIT fundamentals remain healthy, but per-share valuation premiums warrant selectivity.

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  • We believe equity REIT valuation premiums and persistent global economic uncertainty and volatility require REIT investors to be more cautious and selective.
  • Equity REITs continue to trade at premiums to fair value, based on attractive operating and balance sheet fundamentals, and unique "growth and income" characteristics.
  • Healthy balance sheets and dividend payout ratios should allow equity REITs to maintain, and in many cases, increase dividends, even in an uncertain economic environment.
  • Healthy commercial real estate supply and an improving economic environment continue to provide a boost to equity REIT operating fundamentals, cash flow, and underlying portfolio valuations.

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Philip J. Martin does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.