Oppenheimer Defends REITs Despite Scary Selloff

In a new report, Oppenheimer analyst Steve Manaker discusses the recent REIT sell-off and whether or not it is a buying opportunity for investors. REIT investors have grown increasingly concerned about the impact that cheap oil, China, forex headwinds and widening credit spreads will have on the U.S. real estate market.

“At this point, some levered buyers are having a harder time accessing capital, but overall demand for assets still seems strong,” Manaker explains.

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He predicts that growth will be the key differentiator among REITs in a slow growth and low interest rate environment.

For now, Oppenheimer prefers REITS with exposure to non-coastal regions, industrial plays, and small-cap names. Manaker mentions the following REITs as top picks:

Highwoods Properties Inc HIW
Mid-American Apartment Communities Inc MAA
Realty Income Corp O
National Retail Properties, Inc. NNN
Taubman Centers, Inc. TCO
General Growth Properties Inc GGP
Healthcare Trust Of America Inc HTA
Prologis Inc PLD
Duke Realty Corp DRE
American Farmland Co AFCO
Preferred Apartment Communities Inc. APTS
Bluerock Residential Growth REIT Inc BRG
Community Healthcare Trust Inc CHCT
City Office REIT Inc CIO
Gladstone Land Corp LAND

Disclosure: the author holds no position in the stocks mentioned.