The New REIT Landscape

On September 16th, due to the rapid growth of real estate as a distinct asset class, MSCI and S&P Down Jones officially broke real estate into its own sector, moving it out of the Financials sector within the Global Industry Classification Standard (GICS®). Real Estate is the 11th headline-level sector under GICS, and the first new headline sector since 1999.

The Ipreo Blog is no stranger to real estate securities; over the past few years we’ve covered a few significant REIT IPOs when they hit the market. Two years ago, in November of 2014, we delved into REITs in service of covering the Paramount Group’s IPO, the largest REIT IPO of all time, and in April of this year, we discussed the MGM Properties REIT IPO that made some noise when it debuted.

From our “REIT Back Atcha” post:

MGM Growth properties landed Tuesday night at $1.05B, and it hit several landmarks. It’s the first NYSE listing of 2016, it’s the first REIT IPO of the year (since American Farmland’s $48.0M offering in October 2015), the fourth largest REIT since 2001, and the largest IPO of 2016 (since First Data Corp landed at $2.8B, also in October 2015).

Now that REITs have been granted their own sector – as part of a grouping that also includes real estate management and development companies –  some changes are in store for the way the investment community manages their interest in these assets. Ipreo has put together some info laying out the top funds that will need to shore up their REIT ownership in order to satisfy their sector benchmarks, as well as a geographic breakdown of where those funds are located.

Check out Ipreo’s list of top generalist funds to consider to take advantage of the new Real Estate Sector.