Hike, Stop, and Bounce: REIT Performance After Monetary Policy Tightening Ends (2024)

As published in PREA Quarterly, Winter 2024

Monetary policy tightening cycles typically mark inflection points in the U.S. economy and financial markets. Rising interest rates can create headwinds for financial and real estate markets, and REITs have certainly faced their fair share of challenges over the past two years. With the Federal Reserve (Fed) entering a more accommodative period, REITs are well-positioned for a period of outperformance. Historically, they have enjoyed a resurgence in total returns after monetary policy tightening cycles end. In fact, REIT total returns bounced back with impressive performance in the last quarter of 2023. Based on historical experience, the convergence of the wide valuation gap between public and private real estate will likely ensure continued REIT outperformance into 2024. Disciplined balance sheets have also prepared REITs well for market uncertainty and paved the way for potential opportunistic real estate acquisitions and growth.

To read the full story, visitPREA Quarterly (pdf).