Morgan Stanley’s Laurel Durkay discusses top opportunities in REITs

Laurel Durkay, the head of global listed real assets at Morgan Stanley, recently appeared on ‘The Exchange’ to shed light on the impact of interest rates on the real estate industry, as well as the potential for Real Estate Investment Trusts (REITs) to cover alternative sectors. As an expert in the field, Durkay provided valuable insights into the current opportunities in the REIT market.

Effects of interest rates on the real estate industry

One of the key topics discussed during the interview was the effect of interest rates on the real estate industry. Durkay explained that interest rates significantly influence the performance of REITs. When interest rates rise, the cost of borrowing increases, which can negatively impact the profitability of real estate projects. On the other hand, when interest rates are low, borrowing becomes more affordable, stimulating growth in the industry.

REITs covering alternative sectors

Durkay also highlighted the potential for REITs to cover alternative sectors. Traditionally, REITs have primarily focused on commercial and residential properties. However, there is a growing trend of REITs expanding into alternative sectors such as data centers, cell towers, and logistics facilities. These sectors offer attractive opportunities due to their high demand and the potential for long-term growth.

Data centers

Data centers, in particular, are gaining momentum within the REIT market. As more businesses rely on data storage and processing, the demand for data centers is increasing. REITs that invest in data centers can benefit from this growing demand and generate stable returns.

Cell towers

The expansion of wireless communication networks has created significant demand for cell towers. REITs that specialize in cell tower infrastructure can capitalize on this trend. With the increasing adoption of 5G technology and the need for improved network coverage, cell tower REITs have the potential for substantial growth.

Logistics facilities

As e-commerce continues to thrive, the demand for logistics facilities is on the rise. REITs that own warehouses and distribution centers are well-positioned to benefit from the growth in online retail. This sector offers opportunities for both traditional and specialized logistics facilities, catering to the evolving needs of the industry.

In conclusion, Laurel Durkay emphasized that the real estate industry is dynamic and constantly evolving. Investors should consider the impact of interest rates and explore the opportunities presented by REITs covering alternative sectors. By staying informed about market trends and conducting thorough research, investors can make informed decisions and maximize their returns in the REIT market.

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