Haendel St. Juste is Managing Director and Senior REITs Analyst at Mizuho Securities USA LLC. He joined Mizuho in early 2016, having spent the previous 15 years on Wall Street, with platforms including Morgan Stanley, UBS and Green Street, focused exclusively on the REIT sector. Mr. St. Juste’s coverage at Mizuho includes retail, triple net and single-family REITs and the homebuilders. In the exclusive 2,350 word interview in the Wall Street Transcript, Haendel St. Juste gives some specific real estate investment recommendations.
“On the REIT side, there tends to historically be some underperformance during the early stages of rate increases, but when you step back and understand the reasons behind the rate increases — the economy is doing well, there is some inflation, credit availability is expanding, wages are going up, people are feeling good — well, that certainly bodes well for real estate.”
The rebound in REITs has been pronounced:
“I think that early concerns about rates moving materially this year have been taken off the table, and now that we are in what seems to be a more benign environment, we’ve seen a bit of a rally here in the REITs. The REITs are up 15% from their February 15th lows. Now, they’re still trailing the S&P but not by much, not by as much.”
Retail oriented REITs may have avoided complete disaster and some specific names offer opportunity according to Mr. St. Juste:
“I think in retail, certainly, there’s a sense that we could be seeing some stabilization. Last year, there was a pervasive sense of fear the retail world was falling apart. E-commerce is gaining so much share, forcing retailers to their knees and landlords having to close stores and occupancies being impacted; there was a pervasive sense of fear that things could get a lot worse in the new retail paradigm. Well, that seems to have leveled off a bit. Certainly, I think companies are understanding that to be successful in the modern retail era it’s important to, yes, have a web or internet presence, an e-commerce presence, but also having a full complementary omnichannel strategy, clicks-and-bricks plus brick-and-mortar, web plus store base. So the value of well-located real estate has become more appreciated, and we’ve seen some sense of stabilization.”
To get the specific stock and REIT recommendations read the entire 2,350 word interview in the Wall Street Transcript.