Throughout 2014, interest rates have defied many expectations to the contrary by declining. That's been good news for the United States REIT space, which has performed well this year.
Right now, Morningstar's equity analysts believe that the U.S. REIT sector as a whole is slightly overvalued. However, our analysts also see pockets of opportunity in certain areas of the REIT landscape, including health care, retail, and cell tower properties. Traditionally, shares of REITs move inversely with changes in long-term government-bond yields, and REITs likely will underperform in a rising-rate environment.
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Robert Goldsborough does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.