High inflation levels and a slow economic growth rate have many investors worried that stagflation could come back in 2022. The last time stagflation hit the United States was in the 1970s. During the 1970s stagflation, real estate investments outperformed the market.
Bank of America analyst Jeffrey Spectator suggests investors consider investing in REITs or real estate investment trusts. They have the competitive advantages of pricing power, flexible balance sheets, and cash flow that is protected from inflation. Real estate investment trusts also have growth trends separate from the rest of the market. Below you will find some of the high-quality REITs that Bank of America suggests investors consider investing in for the future.
Alexandria Real Estate Equities Inc. is a REIT that owns, manages, and leases office and laboratory space to the life sciences industry. It has properties in major scientific research and development hubs in the United States, such as the Research Triangle Park in North Carolina. High demand for life sciences office and laboratory space and lots of funding for this industry position Alexandria favorably in an inflationary economic environment.
Extra Space Storage Inc. is one of the most prominent players in the self-storage market. Bank of America analyst Jeffrey Spectator says the company’s high pricing power and rock-solid balance sheet make it an attractive pick. High occupancy rates and a growing demand also indicate that Extra Space Storage is on track to continue its impressive growth even during an inflationary period.
Regency Centers Corp is a REIT that owns and operates shopping centers. Bank of America rates it as having a best-in-class asset portfolio and a solid balance sheet. Most of the properties that Regency owns are anchored by grocery stores. Strong tenancy rates and favorable demographics make Regency Centers Corp a good investment choice during a sluggish economy.
Welltower Inc. is a top pick in the category of healthcare REITs. The company owns and manages senior care housing properties, assisted living facilities, and medical office space. A recovering healthcare system, longer life expectancies, and the aging boomer generation are all positive trends for Welltower Inc.