Continued Low Interest Rates Benefit REITs

As the Fed has decided to keep interest rates low, real estate investors wonder how REITs will fare in coming months. Since the Federal Reserve’s decision last week, REITs have outperformed the S&P 500. Earlier this year, real estate investment trusts trailed the overall market because of the approaching decision to potentially raise interest rates. Increased rates could have drawn investors away from REITS, and more towards bonds. Keeping interest rates down could potential result in more enthusiasm for REIT shares, but “general investors” are not exactly lining up to invest in real estate trusts.

Real estate companies giving out long-term leases, like health care companies in particular, have been the most successful. Other REITs, such as Simon Property Group Inc., are more volatile given their increased exposure to consumer finances. Taking rates out of the equation, REITs seem to be a decent investment at the time. Construction levels are moderate, limiting the supply of new buildings causes rents to rise. Investors would like to see more confidence reflected in interest rates, but until then, executives are trying to increase value by “pursuing joint ventures and trying to streamline operations.”

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Virginia MacKoul

Virginia is a graduate from the University of Florida's College of Design Construction and Planning with a degree in Sustainability and the Built Environment, and a minor in Urban Regional Planning. Virginia joined the Front Street team in 2011, as an intern. Upon graduation, Virginia joined the Front Street team full-time as the Director of Client Services. Ms. MacKoul’s addition furthers Front Street’s continued growth and expansion within Gainesville and other North Central Florida markets. She was promoted to Director of Marketing in 2014 and now manages the firm’s team of interns and oversees all marketing and branding activity. Virginia was born in Boston and moved to Lee County, Florida in 1997. Virginia graduated her high school's International Baccalaureate program and started at the University of Florida with a focus on Architecture. Virginia shares Front Street's passion of giving back to the community and those in need. Virginia's hobbies include photography, cooking, football, movies, music, and spending time with her dog, Brinkley.

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