With the trade war between the U.S. and China escalating, the stock market took a plunge last week and financial analysts predict the market will continue to be volatile as the talks continue (or don’t, as the case may be). The one sector that did not suffer, however, was real estate. Real Estate Investment Trusts (REITs) rose as other stocks faltered. Since real estate is relatively disassociated with the global supply chain, investors are looking toward it as a safe haven.
While REITs overall rose last week amidst the trade war talks, some REITs are regarded as safer investments than others. International trade has little impact on residential and health care properties, however commercial businesses, like hotels, retail, and office buildings face greater risk because the tenants may be effected by the increases in price of goods. And while the market has not seen a price drop yet, Construction is likely the most vulnerable sector.