REIT assets will continue to appreciate, says Michael Hudgins, real estate strategist with J.P. Morgan Asset Management. "REITs right now are growing cash flow from a depressed base," he said. "They've moved past this peak, but still are generating [net operating income] at the property level of about 4 percent year on year." Hudgins says there is "no reason" why REITs can't continue to grow NOI at a 3% year-on-year rate for the next couple of years.
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