REITs Poised For Growth, but Geopolitical Risks are Wildcard: Nareit Panelists 

The National Association of Real Estate Investment Trusts’ (NAREIT) REITweek 2026 Investor Conference kicked off Tuesday with both tailwinds and headwinds facing the U.S. economy.

The annual real estate investment trust (REIT) symposium was held at the Hilton Midtown at a time when the FTSE Nareit All Equity REITs Index was up 14 percent year-to-date while outperforming the broader stock market by around 400 basis points (bps). It was also held against the backdrop of geopolitical uncertainty due to the war in Iran and the higher energy prices as a result.

“The energy shock is a big question mark,” said Seth Carpenter, chief global economist at Morgan Stanley, during the conference’s “Capital Markets and REIT Outlook” panel. “If two, three to four months from now there’s still no flow of energy from the Strait of Hormuz, I think that’s a real global recessionary environment where you’re getting physical shortages of energy.”

Carpenter said the market is predicting the Iran conflict will get resolved soon with oil falling to around $90 a barrel by the end of the year and continuing to dip to $80 a barrel next year. He noted that Morgan Stanley expects long-term interest rates are poised to come down around 20 to 25 bps a year from now due to lower inflation, which would result in more opportunities for REIT initial public offerings and mergers. 

Joseph Lupton, co-head of economic research at J.P. Morgan, disagreed with Carpenter’s expectations for Fed rate cuts due to the labor market continuing to perform strong amid high inflation. He said if the Strait of Hormuz in the Persian Gulf opens up soon it could provide an economic boost that  prompts the Federal Reserve to hike interest rates late this year or in early 2027. 

Andy Richard, co-head of global real estate banking at Citigroup, noted that REITs have outperformed this year after underforming in recent years. They’ve been aided by stabilized capitalization rates and expectations that real estate will play a critical role in the infrastructure buildout surrounding AI’s growth. Richard stressed that REITs have more runway to further scale over the next few years due to low supply fundamentals in the major property sectors.

Richard said senior housing is one of the REIT sectors in the strongest position for growth as more baby boomers retire.

“You have very good demand fundamentals short term and long term,” said Richard in the panel moderated by Sumit Roy, president and CEO of Realty Income Corporation. “You’ve got very favorable supply dynamics and the companies themselves have been afforded a cost-of-capital to grow.”

Andrew Coen can be reached at acoen@commercialobserver.com.