As interest rates, inflation, equity valuations and volatility continue to rise, public equities and fixed income have become relatively unattractive. This leaves many investors wondering where to find returns in 2022. Bloomberg recently spoke with Delegate Advisors Director of Advisory Services Morgan Tarr for insight on where she believes investors should deploy $100,000 right now.
According to Tarr, with the current economic environment, she has been recommending her clients consider the incorporation of private REITs into their portfolios. “Generally, REITs offer investors a higher yield than fixed income with lower interest-rate risk,” she explains. “Investors may also benefit from appreciation in the underlying value of the properties owned by the REIT. Additionally, real estate offers a degree of inflation protection as rents tend to rise concurrently with prices.”
While there is a wide array of options when it comes to REITs, Tarr tells the publication that Delegate has been specifically targeting trusts that focus on multifamily and industrial real estate in fast-growing markets with economic tailwinds, such as Nashville, Denver, Austin and the Raleigh-Durham area. “We favor private REITs relative to public REITs because private REITs are less correlated with the broader public-equity markets and, as a result, are generally less volatile,” Tarr adds.