Real estate investment trusts have near-universal anxiety over the Federal Reserve raising interest rates, a study by BDO USA, a financial advisory and consulting firm, found.
BDO looked at the most recent annual report (10-K) filings by the 100 largest publicly traded REITs to the Securities and Exchange Commission and found that 97% mentioned risks associated with increased interest rates.
"Low interest rates have contributed to the REIT industry's expansion in recent years, and if an increase in interest rates were to occur, the industry's access to capital to fund future growth may be impacted," BDO partner and real estate practice leader Stuart Eisenberg said in a release accompanying the firm's findings.
BDO ascribed low interest rates and higher demand for REIT investment to the increase in mergers and acquisition activity within the field.
"REITs are eager to grow their portfolios through M&A activity especially as interest rates remain low," said Anthony La Malfa, partner at the firm's real estate and hospitality services group.
