Name: The next phase for preferred securities
Start: 2023-10-20T10:00:00Z
End: 2023-10-20T10:00:59.000Z
Location: BrightTALK
Rating: 0

Dedicated to the pursuit of excellence in everything we do, Cohen & Steers is the leading global investment manager specializing in real assets and alternative income, focused on delivering diversification, alpha and income. 

Our teams are relentless in their drive to provide superior investment solutions and passionate about constantly innovating to meet the needs of clients today and anticipate their challenges of tomorrow. 

Watch this month’s Real Estate Reel to find out what these data points mean for real estate investing.
Key Takeaways
- Data is suggesting potential for a rally in listed REITs once rates stabilize because listed REIT returns, which have declined for three months straight, have become correlated to real rates.

- Listed REIT valuations are around 10-year lows, which we view as another indication of a strong potential entry point for listed REITs.

- The selloff and recovery in private real estate could be a slow grind, as the pattern in the decline in valuations appears to be reminiscent of the 1990s S&L crisis.

The Real Estate Reel: The listed REIT selloff

Welcome to 2nd edition of The Real Estate Reel from Cohen & Steers for October.
Institutional investors have increased their allocations to real estate, CRE debt delinquency rates are increasing but remain relatively low, and CRE valuations are down more than 16% so far this year. Watch this month’s Real Estate Reel to find out what these data points mean for real estate investing.

KEY TAKEAWAYS

- Institutional investors increased their allocations to real estate in the first half of 2023, and we see a backdrop where large investors are buying real estate to meet their allocation targets as positive for real estate prices.
- Commercial Real Estate (CRE) debt delinquency rates are on the rise but remain relatively low, indicating the headwinds facing CRE debt markets are lower than feared in March.
- CRE valuations are down -16.4% year to date as of August, but there are wide variations in how much levered returns are down by sector.

The Real Estate Reel: Institutional allocations and CRE debt

Welcome to The Real Estate Reel from Cohen & Steers where we provide three insights on real estate investing in three minutes each month.

KEY TAKEAWAYS

- Private real estate has declined for the third consecutive quarter, and its sell-off is one indication of several we track that there may be an attractive entry point for listed real estate.
- Bank lending standards have also historically been a leading indicator for real estate, and recent data shows that a major net share of banks reported having tightened standards on all categories of Commercial Real Estate loans.
- Commercial real estate debt spreads are tightening, and this has been a recent tailwind for listed REIT returns as fears the market held in the spring have eased.

The Real Estate Reel: Three data points actually driving real estate investing

Recent market events, including a downturn in private real estate, give us greater conviction in our analysis showing favorable entry points emerging for global listed REITs.

Join Jason Yablon, Head of U.S. Real Estate & Sr. Portfolio Manager and Ji Zhang, Portfolio Manager, Global Real Estate, as they highlight:  

- Rates, fundamentals and entry points for U.S. and Global REITs
- How the composition of the REIT universe has changed over the past 10 years
- The role of data centers & AI in the regime shift

Global Listed Real Estate: What's driving a more favorable outlook

Recent market events, including a downturn in private real estate, give us greater conviction in our analysis showing favorable entry points emerging for listed REITs.

As private real estate sells off, our conviction in REITs grows

Join Rogier Quirijns, Head of Europe Real Estate and Ji Zhang, CFA, Global Real Estate Portfolio Manager, as they discuss: 
• The state of the global real estate market
• Healthy fundamentals and current valuations indicating a favourable buying opportunity for both global and European real estate
• Implications of the CRE debt markets

Listed real estate: Key reasons to invest in REITs now

Hear from our Head of Fixed Income, Bill Scapell, and Portfolio Managers Elaine Zaharis-Nikas and Jerry Dorost, as they share why we believe there is a supportive backdrop for the preferred securities market:
• Today’s attractive yield opportunity
• The underlying strength of issuers and potentially beneficial new regulations
• Historical performance following market corrections and end of rate hikes

Preferred Securities: Resetting for a new cycle

We believe markets have transitioned to a new regime of slow growth and elevated inflationary risks. It’s an environment we believe warrants diversification and inflation mitigation. And it’s precisely the role that we feel real assets can fulfill. Watch why we think we are in a period of secular stagflation and what role real assets can play.

Defending against sustained inflation with real assets

Real estate securities allow investors to access the beneficial investment characteristics of real estate ownership, while addressing some of the challenges that arise from the capital-intensive and illiquid process of investing in properties directly. Portfolio Specialist Evan Serton provides a brief overview of the global REIT market, its attributes, and Cohen & Steers’ approach to investing in this unique asset class.

Investing in Real Estate Securities

Environmental, social and governance issues present demonstrable risks and opportunities for real assets. Join Khalid Husain, Head of ESG, to learn how our integrated ESG approach at Cohen & Steers assesses and values these topics as part of our investment approach among different real assets sectors and companies.

ESG integration: Unlocking value in real assets

Executive Chairman Bob Steers sits down with Citywire Selector to discuss increased interest in real assets and Cohen & Steers’ investing approach in a competitive market.

Increased interest in real assets: Citywire Selector interview with Bob Steers

Markets and the economy have arrived at a pivot point—growth is decelerating as actions by central banks to rein in inflation take hold. Join our webcast with Head of Real Assets, Vince Childers and Head of Commodities, Ben Ross as they discuss:

• A perspective on commodities—valuations and outlook
• Opportunities in real assets stemming from recent market dislocations
• Implementing real assets as a strategic allocation in a new economic regime

Real Assets & Commodities: The road ahead

Broad fixed income markets have seen a substantial wave of repricing this year stemming from persistent inflation, interest rate volatility, and concerns around economic growth. However, we believe there are three dynamics in the market right now that make preferreds attractive: Higher current income levels, healthy issuer fundamentals, and preferreds’ historical tendency to rebound following significant drawdowns.

Three reasons we think preferreds are now attractive

High inflation and slowing economic growth, tightening financial conditions and elevated global equity valuations are cautioning investors towards traditional risk assets.

Hear our portfolio managers, Ben Morton and Tyler Rosenlicht as they discuss:

• The importance of listed infrastructure exposure in the new regime
• Midstream energy’s compelling characteristics for an inflationary environment
• The global energy market and its impact on infrastructure subsectors

Infrastructure: A diversifying asset class for volatile times

Despite the prospect of near-term volatility, REITs are well positioned to help mitigate higher interest rates, sticky inflation and challenging economic conditions.

Join Jason Yablon and Ji Zhang as they highlight:

• Arbitrage opportunities in the global and U.S. real estate market
• Why REITs are well positioned to withstand elevated inflation as well as stagflation
• How rising rents matter more to REITs than rising rates

REIT opportunities as inflation dominates the macro-outlook

We believe healthy fundamentals and current valuations are indicating one of the most favourable buying opportunities for European real estate securities in the past 20+ years. Register to hear from Rogier Quirijns, Head of Europe Real Estate, as he discusses: 

• The potential for European real estate to deliver meaningful relative real returns despite rising interest rates and slower growth.
• How European real estate can act as a hedge to inflation, since most cash flows are linked to inflation.
• Relative to traditional asset classes, European real estate securities may offer attractive levels of secure income and growth—even in periods of stagflation.

Listed European real estate: A multi-decade buying opportunity

Quynh Dang, Global Infrastructure Portfolio Manager, discusses the impact of private capital finding its way to the listed infrastructure universe, the benefits of getting exposure to the renewables theme via infrastructure, and other infrastructure sectors we are watching right now.

A portfolio manager’s perspective: Opportunities in listed infrastructure

The next phase for preferred securities
Hear from our Head of Fixed Income and Preferred Securities, Bill Scapell, and Portfolio Managers Elaine Zaharis-Nikas and Jerry Dorost, as they share:
• An update on the preferred securities market
• The fundamental health of European banks and new issuance
• Portfolio sector weights, earnings and credit of U.S. banks

The next phase for preferred securities

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The next phase for preferred securities

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