Even thought the implied cap rates on REITs stand at about 6%, REITs are fully valued under current market conditions, says Rod Hinze, KeyPoint Capital Management's founder and portfolio manager. The average historical implied cap rate is approximately 8%. Hinze attributes the disparity to "artificially low" Treasury 10-year yields. "I think that's a function of people looking for dividend yield in their portfolios, and I think REITs are a good place to find that yield," Hinze said.
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