Recently, Armada ETF Advisors attended the NYU Schack REIT Symposium where multiple REIT CEOs and industry participants spoke on a variety of panels and topics such as interest rates, cap rates and the current lending environment.

Speaking on these topics, VICI Properties noted that they continue to focus on transition from offense to defence (and back again) by having “ability to anticipate.” They noted that it takes time to formulate new insights and think about how real estate influences “live, work, & play.” At the same panel, Kimco Realty (KIM) highlighted that supply and demand is in the landlord’s favour right now. “Potential distress and opportunities are on the horizon,” they said. “Collect your nuts for winter.”

Executives spent time highlighting their balance sheet management in the wake of rising interest rates, as well as the current cap-rate environment. “How do you assess cap-rates if nothing trades?” was a common question throughout the symposium.

The credit rating of each company depends on the ability to raise capital. Many executives noted that the fixed income market is opening back up while the equity market is basically closed on account of the discounts to NAV where stocks are trading. Each company takes a different approach to its NAV and highlighted why they think their various companies are trading at discounts.

Throughout the symposium, several executives noted the importance of boards focusing on leverage deploying capital; for example, AvalonBay discussed how they must be prepared for a wider set of outcomes and take steps to enforce the strength of their balance sheet. In turn, Empire State Realty Trust discussed their capital allocation strategy as an operating runway for creating an all-weather balance sheet. They addressed the dividend cut during COVID, with the aim to bring it back at a smaller level while waiting for Observatory to fully recover.