The case for investing in REITs despite the Blackstone news

on Dec 3, 2022
  • Blackstone limits withdrawals from its real estate investment trust.
  • Jenny Harrington and Jim Lebenthal still remain bullish on REITs.
  • REITs is currently the third worst-performing sector year-to-date.

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Blackstone Inc (NYSE: BX), on Friday, limited withdrawals from its property fund after fears related to the health of the commercial real estate market fuelled redemptions. Still, Jim Lebenthal of Cerity Partners is not giving up on REITs.

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Lebenthal advises against pulling out of REITs

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Lebenthal is bullish on the real estate investment trusts because he’s convinced that interest rates have peaked even though the monthly jobs report still came in hot.

One he likes in particular is Camden Property Trust (NYSE: CPT) that’s down more than 30% versus the start of 2022.

Based in the Sun Belt, where people are coming to as they’re coming from the higher tax coastal states. They’ve been growing their business very nicely and it’s a great business model.

About a month ago, Camden said its revenue in the third financial quarter was better-than-expected – though profit fell shy of Street estimates. Majority of the real estate funds pay a healthy dividend yield, which makes up for another reason to invest in REITs.

Jenny Harrington is also bullish on REITs

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Who’s also keeping constructive despite the REITs news is Jenny Harrington – the Chief Executive Officer of Gilman Hill Asset Management.

One of the reasons that she continues to see opportunity in REITs is the U.S. economy that’s keeping resilient. On CNBC’s “Halftime Report”, Harrington said:

Their underlying business are in excellent shape. In a strong economy, they produce real earnings as they’re able to increase rents. There’s enormous opportunity as they’re down so much. It’s a place you can make a lot of money in 2023.

The Bureau of Economic Analysis this week said the U.S. economy grew at an annualised pace of 2.90% in the third quarter. As long as you’re selectively investing in REITs with decent earnings growth, you should be fine, Harrington concluded.


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