"On average the companies we follow for quarter three were up 12.5% year-over-year," Smotrich said. His company was expecting 10% growth and found the better-than-expected results "speaks to the fundamentals of the recovery we are seeing."
This year the REIT group continued to fair better than the previous years, a trend Smotrich believes will continue into next year as capital continues to see value in the real estate industry and continues to invest. "We are cautiously constructive about REITS. In the real estate markets, fundamentally, we see accelerated improvements this year and into next."
The office and multifamily REITs have been the most robust this year and last, a trend Smotrich believes will continue as the economy strengthens and unemployment continues to decline.
Mergers and acquisitions have played a large role in the group lately. Smotrich said the consolidation will continue as the sector matures. "We are starting to see very normal consolidations that you are seeing in every other industry." More mergers and acquisitions in the next several months are rumored although Smotrich did not mention REITs that could be moving in this direction. He did say that while mergers will not stop, a company serious about future growth would likely remain in the public sphere.
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