“If you look at a 15-year average [yield spread], it is typically 3.7% to 3.8%. Just on the basis of the average spread versus current spread of 3.6% to 3.7%, it’s not a good time to bottom-fish across the sector. On the other hand, REITs are also not going to see a significant selloff given the flattening yield curve,” says Brandon Lee, an analyst at JPMorgan (see Charts 1 and 2).
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