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AEW CIO says REIT supply is at historically low levels

The spread between REIT implied cap rates and the 10-year Treasury has halved since the start of the year, while AEW points to “green shoots” of pricing power across sectors.

Reported · Written up by our desk · REITs

Nareit reports that Gina Szymanski, chief investment officer at AEW Capital Management’s global securities business, said there is no better time in the REIT cycle for long-term investors, citing historically low levels of new supply across all property sectors.

She said the market shifted after interest rates began rising in 2022, when new development largely stopped, with supply pipelines taking time to empty. Szymanski added that the resulting low supply can translate into more pricing power for landlords, and she described early signs of that dynamic as “green shoots.”

Nareit also notes that Szymanski pointed to a change in relative valuation, saying the spread between REIT implied cap rates and the 10-year Treasury has halved since the start of the year. She argued REITs can still thrive if investors focus on growth sectors including senior housing, data centers, and retail.

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