REITs poised to weather Fed cut delays, says Nareit

In a recent market commentary for Nareit, Edward F. Pierzak, senior vice president of research at Nareit, argued that the delaying of a Fed cut is not posing a significant problem to REITs.

Pierzak pointed out that fourth-quarter data from the Nareit Total REIT Industry Tracker Series shows that REITs, on the whole, have maintained their long-term and well-structured balance sheets through a combination of low leverage ratios and the utilization of unsecured debt and fixed interest rates.

At the end of the fourth quarter 2023, the weighted average term to maturity for REIT debt was 6.3 years and the average in-place cost of REIT debt was 4.1 percent — higher than its low average, which hovered just above 3.0 percent in 2022, but in line with its averages from 2016 through 2019.

To read Pierzak’s full commentary, click