Often we hear analysts or in forum the perception that Increasing Interest Rate will affects the cost of Reits Loans therefore profitability. However the correlations on table below tells a different story that Reits do generally well in high rate environments .  Hope this settle once and for all, the myth or maybe there is deeper issues within.


Interest Rate Impacts A well managed Reits will pass the cost to tenant. A too drastic increase within a short period do affect Reits short term as majority of tenancy agreements are still in force but that's not the argument here. Some Reits have build-in rental escalation tied to sales and inflation. Nevertheless, cost is able to pass down to tenant mitigating the impact.

Yield Compression
What we know is that when investing in Reits, we looks for yield therefore it is logical that we compared it to other products...