Principal's Kellenberger: Rates are the wild card for REITs now

Money Life with Chuck Jaffe

Todd Kellenberger, portfolio manager for public REITs at Principal Asset Management, expects that the Federal Reserve will make two to three interest rate cuts in 2025, but that the way rates move will be the real determinant in how the year plays out for real estate investors. Kellenberger says that the central bank's actions will be determined by inflation and jobs data, but he notes that if rates stay benign it will still be a good market for real estate, with the potential for much more if rates move more and the economy has a soft landing where real estate fundamentals improve. He gives his outlook for a variety of REIT types in a wide-ranging Big Interview. David Trainer, founder and president at New Constructs puts MicroStrategy Inc. in the Danger Zone, noting that the company is essentially a costly, leveraged play on bitcoin with more risk than an investor would face just owning cryptocurrency directly. And Michael Lowenberg, portfolio manager for the Modern Capital Tactical Income fund, talks in the Money Life Market Call about what he looks for in closed-end funds.