After a tumultuous year for many asset classes, real estate investment funds – or REITs – are back in the spotlight. REITs, which invest in income-generating real estate, such as shopping malls, housing developments and hospitals, had a strong earnings season last quarter, and analysts say an numbers will still recover, even in a recession. “We view REIT’s second-quarter earnings as attractive,” Wells Fargo Investment Institute said in a note last week. “Despite a relatively difficult quarter, real estate investment trusts (REITs) were able to generate compelling growth in operating capital per share and net operating income. real estate.” It noted that the REIT industry posted cash growth per share – a key earnings metric used by REITs – of 14.2% year over year. Tech REITs Looking ahead, Wolfe Research highlights that technology REITs, with a focus on data centers and cell towers, can be particularly resilient in tough economic environments. “Tech REITs (which benefit them during an economic downturn) tend to increase rents that do not coincide with broader economic growth,” Wolfe Research analysts wrote in a recent note. Citi in a September 9 report pointed out that it was overloaded on data center REITs. It highlighted Equinix Reit and Digital Realty Trust as reliable spots to watch, saying there is growing interest in “hybrid cloud” infrastructure – a combination of both public and private clouds. investment – will support continued IT outsourcing. It also raised prices for cell tower REITs, particularly the American Tower REIT and the SBA Communications REIT in particular. The bank said the tower business model remains well-positioned to grow from continued investments from mobile carriers. Healthcare REITs Meanwhile, Morgan Stanley noted in a recent report that healthcare REITs have outperformed the overall market this year, down 7% year-over-year through the end of August. Meanwhile, the MSCI US REIT index fell 18% over the same period and the S&P 500 lost about 17%. “Given favorable demographic conditions, significant capacity recovery to pre-Covid levels, emerging pricing power and limited new supply, we think the operating conditions may continue,” the investment bank said. It said the biggest increase was in senior housing, with an estimated 70 million baby boomers aged 58 to 76, accounting for 21% of the US population last year. The bank cited OECD projections that the US cohort age 75 and older will grow to about 34 million people by 2030, from 24 million in 2021. “As this population ages and sells homes to move The bank has chosen Welltower, a REIT for high-end housing, to offer a target price point, where demand for senior housing will wane, Morgan Stanley analysts wrote. $90 — or a potential increase of about 16%. Morgan Stanley said: “WELL has the highest percentage of premium housing, highest occupancy growth, and firmer execution,” Morgan Stanley said. If a recession hits, the bank notes that around the time of the global financial crisis, Welltower’s occupancy “dipped slightly” in 2009 and was flat in 2010. – Jasmin Suknanan of CNBC contributed to this report.