Nareit’s REIT Report
CenterSquare’s Todd Briddell Highlights Alpha Opportunity, Innovation in REIT Market
Why It Matters
Understanding how volatility can be a source of excess returns helps investors reconsider the perceived risk of listed REITs, especially in a market where private‑equity real‑estate funds face liquidity and valuation challenges. The episode is timely as investors reassess asset allocation amid rising interest rates, inflation concerns, and emerging IPO pipelines in high‑growth REIT sectors.
Key Takeaways
- •Volatility creates alpha, not risk, per Center Square.
- •30-year active REIT strategy consistently beats benchmarks.
- •Public REITs gain cost‑capital edge when trading premium.
- •Senior housing and data center IPOs poised for growth.
- •AI transforms real‑estate data assimilation, driving smarter decisions.
Pulse Analysis
In the latest REIT Report, Todd Bridell of Center Square explains why the market’s volatility is not a deterrent but a source of alpha. Since launching the firm’s listed real‑estate securities group in the early 1990s, Center Square has relied on active underwriting, defensive positioning, and innovative valuation to generate returns that consistently outpace both public benchmarks and private‑real‑estate indices. Bridell stresses that the three‑decade track record proves active management can thrive even during crises—from the Russian debt shock to COVID‑19—by turning uncertainty into excess performance. Bridell highlights the cost‑of‑capital dynamics that separate public REITs from their private counterparts. When a REIT trades at a premium to net asset value, it enjoys cheaper financing and can acquire assets accretively; conversely, a discount invites private buyers seeking cheaper capital.
This spread, often around 25 percent, creates cyclical arbitrage opportunities. Today, senior‑housing and healthcare REITs are benefiting from higher equity multiples and attractive unsecured bond rates, prompting a spring IPO. Data‑center REITs also appear ripe for public offerings, provided the market can support longer‑dated, leveraged financing structures. The conversation turns to portfolio construction, noting that institutional investors are re‑evaluating the split between listed and private real estate.
S. pension funds that must match liabilities across regions. Meanwhile, artificial intelligence is reshaping how managers ingest and act on market data. Bridell argues that AI‑driven assimilation will replace legacy Excel‑based models, enabling faster, more nuanced investment decisions and reducing herd behavior. For Center Square, the goal is to harness these tools while maintaining a contrarian edge, positioning the firm to capture future alpha as the REIT landscape evolves.
Episode Description
CenterSquare Investment Management CEO Todd Briddell joined the REIT Report podcast to discuss the evolution of the firm’s REIT strategy during the past 30 years, the impact of market volatility and adjustments, AI and data assimilation in real estate, public versus private real estate market dynamics, sector-specific IPO opportunities, and more.
“Over the past 30 years, our team has done an absolutely spectacular job underwriting companies, assessing market conditions, knowing what we don't know in periods of high volatility and uncertainty, positioning the portfolio defensively at the right time periods, (and) not getting over our skis,” Briddell said.
Briddell highlighted some of the benefits of public real estate, noting that volatility should be “embraced, not feared” in the REIT market. “What we have done at CenterSquare is really try to educate our investors that volatility is actually a source of alpha. And it is as true today as it has ever been,” he added.
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