Marje
Dear readers/followers,
Recently, lots of people have been asking what will happen to real estate investment trusts, or REITs, if interest rates stay at elevated levels for a long period of time. While this is not my base case and I expect the
Mid-America Apartment Communities Can Withstand Years Of High Interest Rates
Summary
- In this article, I explain why cap rates will not increase one-to-one with interest rates.
- And why some REITs are likely to continue to do well even during a prolonged period of high interest rates.
- I will illustrate this on Mid-America Apartment Communities, which has one of the best residential portfolios in the U.S. and trades at a reasonable implied cap rate of 5.5%.
David Ksir has extensive private equity experience in finance and European real estate. He manages a small 8-figure family office focused on generating reliable dividend income through value investing.
David also contributes to the High Yield Landlord which is led by Jussi Askola and has a team of 5 other top Seeking Alpha REIT and income analysts. They help investors become passive landlords with their 8% yielding real estate portfolio. Service features include: three portfolios (core, retirement, international), community through chat room, buy/sell alerts, and educational content.
Disclosure: I am associated with another SA contributor Deep Value Explorer.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of MAA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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