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REIT Active Managers Shift Allocations to Digital, Healthcare
Active managers of real estate funds focused on REITs continued to shift allocations to the digital and healthcare sectors in the third quarter of 2024, Nareit said Tuesday. Data centers and telecommunications are now the most overweight sectors relative to their index weight, invested at 130% and 123% of their index shares, respectively.
Telecommunications had the largest year-over-year increase for the second consecutive quarter, up 3.3 percentage points. Timberland and self-storage were also up, both Y-O-Y and quarter-over-quarter, while retail, industrial and residential were all down.
By property type, residential maintains the highest investment allocation at 16.4%, followed by telecommunications at 15.5%. However, Nareit said the gap is closing.
Healthcare ranks third at 13.9% after moving into third place last quarter. Industrial (11.1%) has dropped to sixth place, with retail (12.6%) and data centers (11.8%) fourth and fifth, respectively. Office and lodging/resorts are both less than 2%, with diversified less than 0.5%.
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