In today’s segment of Good Buy or Goodbye, host Julie Hyman is joined by Mizuho Americas managing director and senior analyst Vikram Malhotra to explore his top picks and potential pitfalls in the real estate investment trust (REIT) sector.
Malhotra advises investors to purchase Welltower, Inc. (WELL) — an owner of senior living facilities. Malhorta notes demand continues to accelerate for these types of facilities, calling it "the Silver Tsunami beneficiary" over the next 5 years as the senior population grows. He notes that this growing demand with a lack of supply will create clear pricing power for the developer. Malhotra also points to promising growth and acquisition opportunities in the sector.
Meanwhile, Malhorta takes a bearish outlook on Rexford Industrial (REXR) — an owner of manufacturing and distribution facilities. He expresses concerns about the company’s Southern California market focus, citing challenging supply and demand dynamics.
Malhorta also goes on to point out that the potential for redevelopment lease-up is slowing, which could negatively impact both revenue and profitability. Furthermore, Malhotra sees minimal pricing power in the region, making Rexford Industrial a less attractive investment.
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