The sharp rise in interest rates since the presidential election is a short term negative for real estate investment trusts, according to Richard Anderson, a senior analyst at Mizuho who covers the REIT industry. "In the short term it's bad, and there's no way around that," said Anderson. But some REITS may be better positioned than others, such as multi-family housing. Anderson explained that if rising interest rates dissuade home buyers, companies who supply rental housing may be poised to benefit. Anderson said one REIT he favors is Alexandria Real Estate Equities (ARE) , which focuses on investing in pharmaceutical and biotech campuses. He said that industry might be in a better position under a Trump presidency. He also sees opportunity in high-end, luxury malls, and likes Taubman Centers Real Estate Trust (TCO) .
More from REITs
These real estate investment trusts offer yields that are well over double that of the broader market, long dividend increase streaks, and favorable growth and dividend outlooks.
The technical signals for the REIT are mixed at best and don't inspire confidence.
REITs often yield three or four times that of the broader market, but not all REITs are created equal.