A combination of factors like high rates and weakness in commercial real estate have conspired to push REITs lower over the past year. Yet, many billionaire investors are seeing this weakness as an opportunity to scoop up shares as discussed by Jussi Askola for SeekingAlpha.

He notes that Blackston’s Jon Gray and Steve Schwartzman have bought more than $30 billion of REITs over the last 18 months. Interestingly, they see more value in public REITs than private real estate which makes sense given greater drawdowns.

Similarly, Brookfield Asset Management’s Bruce Flatt has also been aggressively buying REITs and remarked in a recent interview that “I would say one of the great purchases today is real estate securities because you are buying them at a fraction of what you would trade them at in the private sector. REITs that have high-quality assets trade at enormous discounts to the tangible value of their assets".

Starwood’s Barry Sternlicht shares this bullishness as well. In a CNBC interview, he said that “There are some unbelievable bargains in REITs. We are already buying some stuff in the public market because I do think that rates are going down." 

Overall, these investors tend to have a more long-term perspective and have also managed to thrive through multiple cycles. It’s clear that many billionaires see current weakness as temporary and see REITs as a big winner once the Fed starts cutting rates. 

Finsum: REITs have been punished over the past 18 months, but some billionaire investors are growing increasingly bullish on the sector due to compelling value and belief that a positive catalyst is around the corner.