The Exceptional Opportunity in REITs

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About This Episode

The rise in global interest rates is driving a “great reset” of real estate values. With the ongoing correction in private markets, REITs offer an attractive entry point with valuations at historic lows. In addition, a number of factors favor REITs:

  • Large differences in valuation between public and private RE markets, while rare, have historically benefited REITs.
  • REITS have historically outperformed the S&P post-Fed tightening cycles.
  • REIT sectors are more concentrated in areas with strong sector secular growth, including senior housing, industrials, data centers, and residential/specialty housing.
  • If the real estate repricing process continues, there will be a wave of consolidation as well-capitalized firms buy attractive properties at steep discounts.
  • Longer-term, falling rates combined with an imbalance of supply and demand will be bullish for REIT valuations.

About Our Guest

Rick J. Romano is a managing director at PGIM Real Estate and head of its Global Real Estate Securities (GRES) business. PGIM is the global asset management business of Prudential Financial, Inc.

Based in Newark, New Jersey, Rick is the chief investment officer and senior portfolio manager for all GRES funds and investments. Rick is a member of PGIM Real Estate’s Americas Executive Council, Global Investment Committee, UCITs Governance Council and Defined Contribution Investment Committee.

Previously, Rick was a portfolio manager responsible for management of North America public securities investments and the global chief risk officer for all GRES funds and investments. Rick joined PGIM Real Estate in 1998 in the Merchant Banking Group where he was responsible for originating and executing entity level equity investments.

Prior to joining PGIM Real Estate, Rick was an equity analyst at Rockefeller & Co., an investment management firm for the Rockefeller family and other high-net-worth clients. In this role, he was responsible for covering real estate and leisure stocks globally. Before this, Rick was a senior investment analyst at the Prudential Realty Group, where he worked on the valuation, asset management, and portfolio management of a hotel portfolio.

Rick has a bachelor's degree from Rutgers College and an MBA in finance from New York University's Stern School of Business. He is a CFA charter holder; a member of the New York Society of Security Analysts (NYSSA); and NAREITs Investment Advisory Council. Rick is also a member of the International Council of Shopping Centers (ICSC).

Show Notes

Here is a link for more information about Rick and PGIM:

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