Published on 12 May 2023 on Zacks via Yahoo Finance

3 Equity REIT Stocks to Bet on Despite Industry Weakness

Despite an improvement in the fundamentals of the real estate market from the onset of the pandemic, there are concerns stemming from rate hikes and an economic slowdown. These are affecting the leasing activity of several asset categories and hurting the REIT and Equity Trust - Other industry’s overall prospects.However, with the industry offering the real estate structure for several economic activities, be it real or virtual, there are pockets of strength even in this challenging environment. Particularly, with the growth of the digital economy, commercial real estates like industrial and data centers, which support the industry, are likely to continue prospering in the foreseeable future. Also, resilient demand for food infrastructure and easing travel restrictions are encouraging. Against this backdrop, VICI Properties Inc. VICI, Americold Realty Trust, Inc. COLD and EastGroup Properties, Inc. EGP are likely to prosper.

About the Industry

The Zacks REIT and Equity Trust - Other industry is a diversified group that covers REIT stocks from different asset categories like industrial, office, lodging, healthcare, self-storage, data centers, infrastructures and others. Equity REITs rent spaces in these properties to tenants and earn rental incomes. Economic growth plays a pivotal role in the real estate sector as economic expansion translates into greater demand for real estate, higher occupancy levels and landlords’ increased power to ask for higher rents. Also, the performance of Equity REITs depends on the underlying asset dynamics and location of properties. So, delving into the fundamentals of these asset categories is essential before making any investment decision. It is important to figure out whether the pandemic-induced behaviors result in only a short-term impact or long-term structural changes.