They are considered safe, and they offer yield. No wonder the stocks of real estate investment trusts ran in the opposite direction of the Brexit-bashed U.S. stock market Friday.
Last fall, interest in REITs had begun to wane, as expectations of higher interest rates outweighed solid fundamentals in the real estate market. Now REITs, and the real estate underlying them, are the power play for the anxious investor.
"Anything that is going to drive the 10 year lower is a positive for REITs. Three-and-a-half percent dividend yield with 6 to 7 percent earnings growth is pretty darned attractive in this environment," said Alexander Goldfarb, senior REIT analyst at Sandler O'Neill.
REITs will also benefit from rising commercial real estate values, as foreign investors continue to pour money into the U.S. office, retail and even apartment space. They had been doing that already, but Brexit will only accelerate the pace, especially of Chinese and Middle Eastern money entering the U.S. brick-and-mortar markets.