Zacks Industry Outlook Highlights: Camden Property Trust, Equity LifeStyle Properties, Essex Property Trust, Cedar Realty Trust and Macerich

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Chicago, IL - October 13, 2015 - Today, Zacks Equity Research discusses the REITs (Part 2), including Camden Property Trust ( CPT ), Equity LifeStyle Properties, Inc. ( ELS ), Essex Property Trust Inc. ( ESS ), Cedar Realty Trust, Inc. ( CDR ) and Macerich Company ( MAC ).

Industry: REITs (Part 2)


The decline in treasury yields and the expectation of an extended period of low interest rates have raised investors' hopes on the real estate investment trust (REIT) sector. But what they should really look forward to is an added boost from the uptrend in fundamentals in certain asset types, which REITs own and operate.

In fact, there are plenty of reasons to be optimistic about the equity REIT industry over the short and the long terms. Below we discuss what investors should look forward to:

Sectors That Look Promising

Take for example the Apartment REITs space. According to early numbers from Axiometrics' apartment market research, annual effective rent growth was 5.2% in the third quarter of 2015, reflecting an increase from 5.0% in the prior quarter and 4.1% a year ago. This was also the highest rent growth in 9 years. The strength in the market was broad based with several of the metros registering positive quarterly effective rent growth. Occupancy of 95.3% in the third quarter was also the highest since early 2001.

Importantly, household formation is increasing but housing starts are failing to keep pace, leading to greater demand for apartments. Also, home ownership cost is rising in several markets. Millennials are moving out from their parents' dwelling early and renting their own pads, but paying off student debt, getting married later and parting with a huge share of their monthly income for rents is leading them to struggle for a mortgage, keeping demand for residential units strong. Companies that particularly remain in a favorable position include Camden Property Trust ( CPT ), Equity LifeStyle Properties, Inc. ( ELS ) and Essex Property Trust Inc. ( ESS ).

Now with the holiday season round the corner, how can the Retail REITs be left behind? In fact, consumer spending is expected to continue to get decent support with anticipation of a longer period of low oil prices . And according to the report on the National Real Estate Investor site that cited an August report from RBC Capital Markets, planned store openings for the coming two years have been increased by the U.S. chain retailers. Well, this raises hope for greater space demand at the Retail REITs.

Such a backdrop encourages us to target stocks that have a better Zacks Rank. Among these are Cedar Realty Trust, Inc. ( CDR ) and The Macerich Company ( MAC ).

Industrial REITs too are capitalizing on the e-commerce boom and urbanization pressure. With a larger customer base, companies are opting for supply-chain consolidation. This is leading to greater demand for logistics infrastructure and efficient distribution networks, creating scope for Industrial REITs.

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CAMDEN PPTY TR (CPT): Free Stock Analysis Report

EQUITY LIFESTYL (ELS): Free Stock Analysis Report

ESSEX PPTY TR (ESS): Free Stock Analysis Report

CEDAR SHOPN CTR (CDR): Free Stock Analysis Report

MACERICH CO (MAC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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