Countercyclical Investment Opportunities For REIT Investors

Summary

• The economy is clearly slowing, if not contracting. REIT investors should consider pivoting to property sectors with stronger countercyclical performance.
• Top options for a slowing or contracting economy include health care and self-storage, though the oversold retail sector may present some opportunities.
• Despite excellent long-term drivers, industrial stands to see outsized losses in the coming months along with the highly pro-cyclical hospitality sector.
• These repositioning moves should not be overplayed, however. The economy spends vastly more time expanding than contracting, so the prudent investor will want to position for the long haul.

Kwarkot

Commercial property owners face some daunting challenges, as I discussed in a recent article, which makes me bearish on REITs overall right now. A credit crunch is spiking just as property market conditions are softening - a deadly combination for many

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

I maintain positions in diversified and select specialty REITs