Zacks Equity Research has voiced its support for the real estate investment trust (REIT) industry, stating that the growing number of people seeking rental properties will keep the industry strong for this year.
‘With a continued decline in the single-family homeownership rate across the U.S. and gradual improvement in the overall economy, apartment REITs have performed strongly in fiscal 2010,’ said the company in a press statement. ‘We expect this sector to remain comparatively stable in the coming quarters, as renting has emerged as the only viable option for customers who could not avail mortgage loans or are unwilling to buy a house at present.’
The company credited the REIT industry's business model for weathering the recent economic crisis, stating that REITs took on far less debt than private real estate investors and sold at the peak when private equity investors continued to buy.
‘Furthermore, REITs are comparatively better equipped to raise capital to pay off debt, making them an increasingly attractive investment proposition,’ the company added. ‘Since late 2010, mergers and acquisitions have gained an impetus as publicly traded REITs have benefited from access to the public markets to fund the transactions.’
SOURCE: Zacks Equity Research
