REIT Development Risk “Under Control,” According to Fitch Analyst

Steven Marks, managing director with Fitch Ratings, joined REIT.com for a video interview at REITWorld 2016: NAREIT’s Annual Convention for All Things REIT at the JW Marriott Phoenix Desert Ridge.

Marks stated that development risk across most of the REIT industry is “pretty well boxed and under control.” According to Marks, development risk in terms of the cost to complete projects relative to gross asset values has declined in recent years.

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REITs and Elements of Risk

Walter Boudry, assistant professor at Cornell University, joined REIT.com for a video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.

Boudry presented a paper at the 2015 NAREIT/AREAUEA Real Estate Research Conference on the diversification benefits of REITs. Risk-tolerant investors tend to benefit more from the diversification properties of REIT common stocks, which enable them to put together portfolios with higher returns. On the other hand, REIT preferred stocks are more appropriate for risk-averse investors, according to Boudry.

Walter Boudry

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