During this month’s virtual Coffee Chat, we spoke with ALPS Portfolio and the Select Sector SPDR Trust about real estate.
We talked about how the pandemic has altered how we live, work, and consume. Many pre-pandemic trends accelerated as economic and behavioral patterns were reshaped as we know them. We saw the rise of remote work and e-commerce, the long-term trends of increased mobility and connectivity. In turn we have seen a more driving demand for infrastructure, such as cell towers and data centers.
Some of those drivers of the recovery included the reopening of the economy, strong and improving property fundamentals, yield scarcity and inflation mitigation.
When it comes to real-estate… things look different than they did. Some property types have shorter-term leases that allow landlords to increase rental rates with rising inflation, and many leases have rental rate escalators that are linked to inflation. Additionally, rising replacement costs may require higher rental rates. That’s giving landlords more potential pricing power to raise rents.
According to Bill Wilson from ALPS Portfolio and the Select Sector SPDR Trust some clients are leaning into tangible real estate and real estate investment trusts. He said the prospects of higher interest rates have really weighed on real estate this year. However, he says increases in interest rates generally reflect improvement in economic conditions, typically leading to higher occupancy rates, stronger rent growth, and increased cash flow – supporting the growth of real estate, REIT earnings and overall dividends.
We missed you if you were unable to attend our virtual Coffee Chat. We hope to see you on our next virtual event. To receive a VIP invite please email me at Jennifer@PlatinumWealth.net
As always, please let me know if you have any questions or I can support in anyway…
Guest speaker and/or ALPS Portfolio and/or the Select Sector SPDR Trust are not affiliated with or endorsed by LPL Financial and/or Platinum Wealth Management.