Beyond the REIT Headlines: The Case for an Active REIT ETF

Is now the time to get back into REITs? Media headlines may have previously dissuaded investors from real estate, but the landscape is changing. A recent webcast sponsored by SS&C ALPS Advisors, “Listed REITs: Advantaged Players in Today’s Property Markets” looked beyond the headlines to examine the case for an active REIT ETF.

See more: REIT Leaders Might Reside in This ETF

Hosted by VettaFi Editor-in-Chief Lara Crigger, the webcast included SS&C ALPS Advisors’ Senior Investment Specialist Karl Zeller and boutique firm GSI Capital Advisors’ CIO Nick Tannura and CEO Craig Leupold. The panel explored the fundamentals behind the appeal of REITs’ past headlines. They also discussed the case for the ALPS Active REIT ETF (REIT).

The Case for an Active Real Estate ETF

While headlines about the downfall of office real estate due to remote work have dominated the narrative, they don’t necessarily impact REITs as much. The office sector comprises just about 5% of the REIT market, according to Leupold.

“Niche or emerging sectors like data centers, storage, single-family rental housing comprise the majority of the market, and in many of those sectors, fundamentals are quite healthy,” Leupold said, adding that interest in AI, for example, is driving data center interest.

At the same time, he added, REITS have strong balance sheets. They’re also operating at less than 33% leverage compared to 50% in private market real estate. At the same time, REITs have just about 15% of debt maturing this year, limiting exposure to new high rate debt.