REITs can help provide access to the new economy sectors—such as cell towers, data centers, and networked logistics properties—that complement the traditional real estate property types, according to Todd Kellenberger, client portfolio manager, real estate securities at Principal Real Estate Investors. Kellenberger noted that the idea of using REITs to gain access to these new economy sectors as part of a portfolio completion strategy has garnered increased attention from institutional investor clients recently. Kellenberger joined guest host Meredith Despins, Nareit’s senior vice president, investment affairs, for a special edition of The REIT Report podcast to discuss the role REITs can play in building a successful 21st century real estate investment portfolio.
Principal Real Estate Investors manages $96 billion in assets today, with $25 billion invested in REITs. The firm recently launched the Global REIT Structural Opportunity Strategy, based on the idea that the way people use and interact with real estate is shifting.
“Certain sectors and companies will experience demand driven higher from those structural forces, and others will be disrupted,” Kellenberger said.
Looking at how property sectors have evolved and performed in recent years, structural factors have played a key role, he emphasized. From the rise of work-from-home to the growth of e-commerce, many new economy sectors have the “tailwind of secular change in demand behind them.”