After four years of mediocre performance, real estate stocks took off in 2019 with returns exceeding 20% due, in large part, to lower interest rates. Warehouse and fulfillment center REITS performed the best with returns of 46.7%, but if rates increase in 2020 these returns could be more modest.
According to Sam Khater, chief economist at Freddie Mac, “The risk of an economic downturn has receded and combined with the very strong jobs market, it should lead to a slightly higher rate environment.”