Michael Knott, head of U.S. REIT analysis at Inexperienced Avenue, sat down for a video interview at Nareit’s REITwise: 2026 Instructional Convention in Hollywood, Florida, March 24-26.
Knott mentioned how at present’s REIT panorama is basically completely different from prior cycles, pushed by three forces: structurally increased rates of interest, the unsure affect of AI on employment, and a extra concentrated, top-heavy trade. After many years of falling charges appearing as a “tailwind,” traders now face a more durable atmosphere the place that assist could not return. As Knott put it, “low charges…had been virtually like a drug…now it appears like we’re not going to have entry to that.”
AI introduces a longer-term threat: a possible disconnect between GDP development and employment, which might weaken demand for sectors like workplace actual property. In the meantime, the most important REITs are more and more partnering with non-public capital, signaling limits to public fairness funding but additionally validating their scale and experience.
For traders, Knott emphasised long-term self-discipline over charge forecasting. He recommends “getting uncomfortable” by shopping for deeply discounted sectors like single-family leases, whereas nonetheless leaning into sturdy themes like information facilities and resilient retail. Valuations total seem close to equilibrium, he stated, with capital flows stabilizing, debt markets wholesome, and transaction exercise rebounding.
Wanting forward, M&A and activism are accelerating, creating alternatives—but additionally “binary threat” that’s tough to handle—suggesting traders ought to prioritize threat administration over making an attempt to foretell deal outcomes.
