Real Estate Market 'Fundamentally Different,' Top Investor Says
Marc Nemer, the CEO of Cole Real Estate Investments, one of the largest publicly traded REITs, said that a recovery is under way with fundamentals noticeably improving in the market.
"It's fundamentally different out there," Nemer told "Squawk on the Street" Friday, when asked how the market today compares with the period six months prior.
Nemer said that his company focuses on "necessity-based" properties, which are less subject to discretionary spending at the consumer level. "The kind of properties we're focused on are doing very well right now."
According to the company, Cole invests primarily in single-tenant commercial real estate, leasing the properties under long-term leases. Cole's portfolio of tenants includes such companies as Walgreen, Dr. Pepper Snapple, PetSmart, Microsoft, Apollo Group's University of Phoenix and more. In 2012, Cole's portfolio topped $10 billion.
"Development is coming back a little bit, which is an indication that things are improving, but that is slow," he said. "Being one of the most active investors, we are able to take advantage of opportunities in the market right now."
With a dividend yield of nearly 6.5 percent, Nemer said that the payouts are backed up by a strong portfolio of income-generating collateral. "It's very compelling right now," he said.
With markets that are sensitive to a looming rise in interest rates, Nemer said that his company is "relatively isolated from a fundamental standpoint" for the eventuality of higher rates. "We've been taking advantage of historically low interest rates for some time, locking in long-term fixed-rate debt."
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