Real Estate
Home›Real Estate›REITs›Some REITs trade below net asset value, offering diver…
Some REITs trade below net asset value, offering diversification
One real estate investor said REIT annual returns reached 14.6% from 2000 to 2002, while the S&P 500 fell 14.6% annually.
REIT-focused commentary highlights that not all real estate investment trusts are richly valued, with some trading at discounts to net asset value, a dynamic that could help diversify portfolios away from concentrated AI and large-cap technology exposure. According to Yahoo Finance, Sam Adams, co-founder of Vert Asset Management, said many public REITs remain below net asset value and can provide access to physical real estate, which he described as a potential counterbalance when intangible-asset-heavy tech stocks struggle. He also pointed to the dot-com era as an example of how REIT performance differed from the broader market, citing 14.6% annual returns for REITs from 2000 to 2002 versus an annual 14.6% decline for the S&P 500.
The discussion notes that rate hikes in recent years and the COVID-driven repricing of commercial real estate weighed on many REIT products, but it argues that valuation gaps can still exist in parts of the sector. Adams said that beyond popular niches like data center and senior housing REITs, other asset types including hotels and resorts, self-storage, warehouses, and shopping malls can trade under net asset value despite having strong revenue and operating income.
The piece also includes views from wealth manager Scott Eichler, who said he focuses on public REIT types such as multifamily, industrial, and mortgage REITs. Eichler highlighted multifamily REIT AvalonBay as an example of a fund he favors due to its high-quality, high-occupancy Class A apartment holdings, while emphasizing that advisors should consider specific criteria when adding REITs, including whether investors want tax-efficient exits from physical holdings.
Latest closeS&P 500 7,533.77 ▼0.5%