This year is poised to be an eventful one for REITs, with several regulatory and policy changes taking effect that will impact operations and balance sheets.
These changes—coupled with a real estate business cycle that many executives feel is at or past its peak, according to findings from BDO’s Global REIT Report—present a mixed bag for REITs in the new year.
As I wrote last year, REIT executives’ expectations have been tampered, but they remain overall confident for the near-future. The most recent and long-term change for REITs is the much-anticipated, new lease accounting standard that took effect at the beginning of the year for most public companies after it was first announced in 2016. For private companies, the new standard will begin in 2020.
Now that the new standard is officially here, I’ve outlined immediate takeaways and potential long-term impacts.