12-19-2013, 02:40 PM
Gradual changing of fed direction and specter of increased borrowing costs. They have had a free ride with the wind at their backs for many years now. It will be hard to out perform when facing head winds. REITs probably have a lot of downward correcting to do. At the least I would expect average yields for the group to hit closer to 7% than the current average that is not much over 4%. I would also suspect that the current higher yielding REITs are likely giving those higher yields because they face greater interest rate risk than is the case with the more conservative plays in the space.
Alex