REITs Building Back During Economic Recovery
The runway for REIT development continues to clear as confidence in recovery grows.
July 28, 2021 | Beth Mattson-Teig | Nareit
REITs that pumped the brakes on development activity last year are once again moving forward with new projects. Yet just how quickly—and firmly—REITs put their feet back on the accelerator depends on the sector and the strength of individual balance sheets.
As the scope and seriousness of COVID-19 became evident in 2020, REITs across the board took steps to conserve capital and enhance financial flexibility. In many cases, that meant putting development projects on hold that were not yet substantially underway.
“That wasn’t necessarily due to lack of opportunities caused by the pandemic, it was more REITs themselves choosing to be more conservative in their capital allocation given the very high level of uncertainty that the pandemic was creating for operations and cash flows,” says Kevin Brown, equity analyst at Morningstar.
