“First-level” investors – those who buy and sell on headlines – mistakenly believe that real estate investment trust (REIT) profits will suffer if rates continue to rise. They’re wrong. This is actually an ideal time to buy the strongest names in the sector.
Note that I said strongest. The sector’s popular proxy is something you should avoid, despite its popularity. I’ll call it out in a moment.
Overall, rising rates are actually good for the best REITs because it signals a rolling economy. These landlords have no problem raising their rents when their tenants are making money.
Unfortunately, the business world is increasingly becoming a neighborhood of “haves” and “have nots.” And some REITs are not doing well, despite the broader tailwinds.…