Real estate investment trusts are having a bad year. However, if you sift through the field, you can find opportunities to make a lot of money, according to Jenny Harrington, CEO of Gilman Hill Asset Management. The MSCI US REIT index is down nearly 21% in 2022, according to FactSet. The index has 132 components, representing approximately 99% of the US REIT world. By comparison, the S&P 500 has lost about 11% year-to-date. Blackstone recently had to restrict withdrawals from its retail real estate fund, BREIT, during November and December. The investment vehicle received redemption requests in excess of the 2% limit of net asset value. monthly and 5% quarterly limit. Overall, rising interest rates were largely responsible for the drop in the sector, as investors with REITs because of their high dividend yields could sell assets in favor of risk-free Treasury bonds. ro. Treasury yields have been on the rise this year, with two-year notes now yielding more than 4%. “The underlying businesses are in great shape in many cases,” Harrington said on CNBC’s “Close Time Report” on Friday. “I don’t think you’re doing yourself a service to make the broad claim that ‘commercial real estate is bad’.” She owns a number of names, including Iron Mountain, which aids in the storage and retrieval of information for businesses. It currently has a yield of 4.5% and is up more than 5% year-to-date. National Retail Properties, Postal Realty Trust, Sabra Health Care and SL Green Realty are also on her list. “In the strong economy we’re still in… they generate real income and they can raise rents,” Harrington said. “Most of them still have really good earnings growth ahead.” Jim Lebenthal, director of equity strategy at Cerity Partners, is also not in favor of REITs. “Interest rates seem to have peaked. I would say the time to get out of REITs is when rates are going up,” he said on the “Halftime Report.” Lebenthal owns Camden Property Trust, which owns, manages and develops multi-family apartment communities in the Sun Belt area. He said people are moving to the American south as they leave the more taxed coastal states. Harrington adds that the key to investing is to classify the sector and choose wisely. “You need to be selective and not brush extensively on this,” she says. “There’s a lot of opportunity and I think because they’re dropping so much, this is where you can really make a lot of money in 2023.”