Tax Reform Could Drive REIT Shares Higher

Tax Reform Could Drive REIT Shares Higher

Despite the stock market's strong performance in 2017, real estate investments broadly haven't had a great year. There are several reasons for this, including rising interest rates and sector-specific headwinds  such as retail bankruptcies and oversupply fears in some industries, which are hitting certain types of REITs.

While a number of factors will be keys to how the real estate sector performs in 2018, one potential catalyst that could boost the values of real estate investment trusts is tax reform. Both the House and Senate versions of the Tax Cuts and Jobs Act include a proposal to cut the tax rates on REIT distributions significantly, which could drive investor interest in those stocks.

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Source: Fool.com