top of page
  • Writer's pictureRealFacts Editorial Team

From Decline to Dividend: Real Estate’s Unique Investment Window for 2024


Real estate property

This week, Jonathan Woloshin, CFA at UBS said, “PLD has a four-prong operating model consisting of owned and operated real estate, development, profit potential for its Essentials Business and strategic capital management that provides multiple avenues of value-creation potential,” The recent decline in the real estate sector, the only one among the 11 key groups in the S&P 500 to show a drop in 2024, offers a significant opportunity for long-term investors. Despite a 4.7% downturn in the real estate index, UBS analyst Jonathan Woloshin sees considerable potential in the market. The commercial real estate (CRE) sector faces uncertainties like volatile interest rates and the need to refinance $2 trillion in debt over the next two years. However, there are signs of improving fundamentals in retail, multifamily, and industrial real estate. The announcement of $33.5 billion in new CRE funds indicates a more positive outlook from 2025 onward.


Real estate investment trusts (REITs) are becoming increasingly attractive, offering an average dividend yield of 4.2%, and providing stable income amidst market volatility. Woloshin advises focusing on quality metrics such as effective management, strong balance sheets, and high-quality properties rather than chasing high yields. Despite sector challenges, patient investors may find attractive risk-adjusted returns in CRE and REIT markets. Companies like Prologis, which has seen a 15% decline in its stock price this year, are noted for their strategic operations in the industrial property sector and a solid dividend yield of 3.4%.


Similarly, Alexandria Real Estate Equities, specializing in life science campuses, has shown resilience with a well-supported dividend and a strong balance sheet, despite a 7% drop in share price year-to-date. Woloshin praises Alexandria for its prudent debt management and diverse tenant base, highlighting its potential for sustainable growth. Both firms exemplify the high-quality investments Woloshin recommends for navigating market turbulence and building a resilient real estate portfolio over the long term.

Commentaires


bottom of page